Asked for SAR 6th July to Swift. I already had the original agreement but wanted to check out the PPI situation as well as the redemption figure.

Anyone with any experience on the PPI included in the total for interest - I would be grateful for some comments on the following:

Loan facility =- £15600.00

PPI = £3276.00

Total Loan amount = £18876.00

I've read somewhere that this practice of including the PPI amount and then charging interest on total has been deemed unlawful (court case I've read I think). Also was not given the option of PPI - we were so desparate for the loan at the time that the broker said "oh well, if you want to change it we are going to have to start right at the beginning etc." it had already taken 3 months to do.

I have also questioned the redemption figure: Borrowed £18876.00 (30.04.03) redemption figure £20,162.33 (redeemed 25.07.03). I know that it wasn't held for a very long time - but in May of that year we decided to move house and it happened more quickly that we expected.

Swift do not call this a redemption figure but their recent letter to me quotes "the settlement figure of £20,162.33 provided to you in our letter dated 16.07.03 was accurate and calculated in accordance with statutory provisions set out in the CCA and was in line with industry practice. blah blah. The oustanding balance calculation of £32,315.36 (we only borrowed £15,600) sets out the total amount payable."

I would be grateful of any comments on (a) the PPI amount taken as the total loan figure and (b) the redemption interest. (Monthly payments were 365.46 over 90 months)

Many thanks

Jackie

Hi

Was there any payments made on the account during its lifetime? If so how much was paid per month? Did you miss any payments?

It does seem like you paid 1286.33 on redeeming the loan. And this equates to roughly 3.5 monthly payments which is the norm for Swift to charge on redeeming early. they scales are normally on the back of your agreement.

The larger figure they quote is what you would of paid back had you kept the loan for the 90 months inc interest on PPI.

PPI is often added to the loan, and therfore interest is applied. You could have a case for being mis sold PPI however you would need your broker to admit they pushed it (as likely as finding rocking horse sh**)

Regency have recently been fined approx 56k for mis selling PPI, maybe have a look for this case online and see if you fall into that bracket.

Paid 3 x monthly premiums of £345 odd - I know that it was there on the terms but at the time we were just so desparate to clear our original mortgage arrears that I suppose you accept anything. I've learned from experience that second charges are not the way to go now.

Also, I've just latched onto another thread from Nightmare4banks in "Insurance" section that deals with PPIs and the legality of the amount being added to the loan and then interest charged thereon. So, hopefully I can gleen something from that. It quotes a court case of Meadows where the judge concluded that the debt was unenforceable because of the way that the PPI was included.

Many thanks for your reply, Sue.

Jackie

I know exactly what you mean about needing to go with them for reasons, it is a frequent thing for many ppl.

so you paid 3 x 365.46 = 1096.38 back. You then paid 1286.33 in interest on redemption. I consider you can claim this back as it is you being penalised for closing the account early. Be wary, Swift call ERC redemption interest, but as i was advised if it walks like a duck, looks like a duck and sounds like a duck then you cant call it a chicken!!

Good luck, follow the right procedure and go get it back!

Re PPi thats a good case to look up, i have heard it quoted before.

Sue - thank you for your reply.

I'm going to send the prelim tomorrow asking: (a) show me your losses for the redemption interest (as per Zoots fab letter); and also to explain the PPI and charging interest thereon (quoting the Meadows case).

Will watch yours with interest.............. Jackie

As this is a loan under 25K it is regulated by the Consumer Credit Act 1974. There is a formular set out in Regulations concerning the amount payable on redemption. If you go to Trading Standards they will be able to tell you if the redemption figure you paid complies with the statute.

Regarding the PPI, you need to be careful as the case you refer to did not make it unlawful to add ppi to the loan and charge interest. The case of Meadows they had incorrectly categorised the PPI, I can't remember which way round it was. They either stated that it was included as a charge for credit when it should have been included as a part of the credit amount or vice versa. Charging interest on the PPI is not initself unlawful. The agreement was renedered unenforceable because of the incorrect data.

If your loan was taken out after this case the chances are the PPI would have been correctly categorised. Also the Regulations which were in operation at the time have since been changed.

So again it would be best to check with Trading Standards as to whether or not the PPI was correctly applied.

Hope this Helps

Zoot