FM vs Lloyds PPI

[Filthy Monkey]

Hi folks,

 

I'm about to emabrk on a claim against Lloyds TSB for PPI on a loan sold to me back in Nov. 2000. I borrowed £8,000 and was told by the chap selling it to me that I wouldn't get the loan without PPI, as I already had another loan with the bank. As I was self-employed at the time I knew it wouldn't be any good to me, but I needed the money so went along with it and tried to convince myself that I was doing the right thing.

 

A couple of years later I realised how stupid I had been and how much money I was wasting, so I contacted the bank to complain that the PPI was no use to me and had been mis-sold. Like so many people on here I was told that the only way to cancel it was to re-finance the loan. At the time I had fallen behind with a couple of payments due to going through an expensive divorce and couldn't afford to bring them up to date and was told that I couldn't re-finance without doing so. In the end a compromise was reached, after another 6 months of arrears had built up, where I paid reduced payments for 6 months and, assuming I kept to the payment schedule, they would allow me to take out another loan to pay off the first, which I did. However, when they offered me the new loan, it included the outstanding balance of the existing loan, including the PPI portion. As my original loan was so far in arrears, I foolishly just went along with it.

 

Having heard so much about this on the news recently, and finding lots of useful information on here, I haved decided to try and claim back the cost of the PPI and any interest as I should never have had to pay it in the first place! To make this even more infuriating, the chap who sold me the loan left the bank shortly afterwards to set up some kind of private practice. He and his business partner were both convicted on mortgage fraud charges a couple of years later!

 

Anyway, I contacted the bank last week and asked them to send me out information on my loan. As it is so old they have, understandably, had to request copies of the original credit agreement from whatever department they come from, but they have provided me with a statement of the loan, including the original amounts, so I have figures to work with.

 

The original loan amount was £8,000 at an APR of 14.8%. On top of this they have charged £1875.89 for PPI and added this to the cost of the loan, bringing my total borrowing to ££9,875.89. The loan was taken out on 02/11/00 and was due to run until 31/12/07, but was refinanced in December 2005, with a balance of £6545.97 outstanding.

 

As I have all of the figures I need, I'm assuming that I can ignore the S.A.R - (Subject Access Request) and go straight to the LBA. I'd be grateful for any advice here...

 

As far as interest is concerned, I still need to work it out accurately, but I'm guessing that I should work out the amount charged on the original loan until the settlement date and allocate the correct proportion to the PPI, then do the same for the new loan.

 

Working things out roughly, it looks like I paid about £1170 in interest on the PPI part of the original loan and about £270 to date on the portion transferred to the new loan, so that gives a total somewhere around £3315 paid towards the PPI costs to date. Ouch! That's a lot of money for something that was never going to be of any use to me.

 

I'd appreciate any advice you guys can give me on this, especially from anyone who has successfully claimed against Lloyds TSB so far. I'll keep this thread updated with any progress. Thanks in advance!!

[alanfromderby]

Sounds like you have all the information you need - don't forget to add 8% per year on top of the figures. You can use the spreadsheets in the Bank Template Library for that.

[Filthy Monkey]

Thanks, Alan. Should I add that 8% when I send the LBA and let them know how much I'm claiming, or should I wait until it gets to the court stage? I seem to remember reading something on here which said that I should wait...

[alanfromderby]

With bank charges we always suggested that people wait until court as the matters were still untested in court. With missold PPI, there is no argument that the PPI was missold and you therefore have an entitlement to claim interest on the money they have taken - from the date they took it.

[Filthy Monkey]

Great, thanks for the advice. I'll get to work on the spreadsheet and figure out just exactly how much these bloodsuckers owe me!

[Filthy Monkey]

Okay, I’ve been looking at this and have worked out some figures. Please let me know if I am making sense here –

 

I borrowed £8,000 at 14.8% APR on 02/12/2000 and a total of £1875.89 was added to the loan for PPI. Now, although I made payments to the loan, I never actually paid it off. In December ’05, an outstanding balance of £6545.97 was transferred to a new loan. In theory, had PPI not been applied up front, all of my payments would have gone towards paying the cash portion of the loan off, so to keep this simple, I should just assume that I never actually paid anything towards the PPI and should, therefore, just apply interest to that year on year at 14.8%, until the transfer date. This would give the following –

 

Original Loan

£1875.89 + 1838 days of interest at 0.041% / day - £3273.94

 

Had the PPI not been applied to the loan, the amount outstanding that would have been refinanced in Dec. ’05 would have been £6545.97 - £3273.94, plus the cost of other borrowings that were taken into account at the time. The interest rate on the new loan, which is still running, is 13.9%, so I can calculate the additional interest applied to the PPI portion that was transferred to the new loan, up to today’s date, as follows –

 

Refinanced Loan

£3273.94 + 751 days of interest at 0.038% / day - £4210.27.

 

The amount outstanding on my current loan is £8,518.12. What that tells me is that if I not been charged for PPI the outstanding balance on my current loan would be £4307.85, as all of my payments would have been applied to the existing loan. I could work out exactly what I had paid proportionally to the PPI portion of the loan with each payment and calculate interest on that, but any additional interest I gain on that money paid would be more or less cancelled out by the reduction in interest applied to the reducing loan balance, so I would end up with a similar, although slightly lower, figure. If I go down this route, I can’t really justify adding 8% pa to the payments I have made, as I would then consider them to have been applied to the original loan amount, which would be considerably reduced by any refund the bank gives me. Does anybody have any suggestions around this? Am I being too nice to them…?

 

If I do add the 8% rate to the amount owed, is that a flat rate? Do I add 8% to the total amount for each year of the loan (i.e. 56% of the overall amount paid over 7 years), or do I add it to PPI portion of each loan payment based on the amount of time elapsed since the payment was made?

 

I hope this makes sense…! Please feel free to ask any questions and feel free to be blunt if I am talking nonsense

[Filthy Monkey]

Right, I've done some more calculations and compounded the interest, as the bank have done, over the 7 years that the loans have been running. Obviously they wouldn't have been charging daily interest on just the principle, but on the principle plus any interest already charged. This gives a total figure of £5276.88 based on calculations through January 2008. So, had they not mis-sold me PPI in the first place, and assuming I had paid the same amounts, my loan, which has a current balance of £8518.12 would only have £3241.24 outstanding!

 

As I'm assuming that all of my payments have been applied to the loan, rather than the PPI in this case, I can't claim any interest on payments.

[alanfromderby]

The 8% is simple interest.

 

Assuming the second loan did not have PPI, the calculation would be roughly as follows.

 

Use one of the bank charge interest calculation spreadsheets.

 

Enter the original PPI amount - then enter each monthly interest payment proportioned to the PPI up to the end of the first agreement.

 

Recalculate the proportion of the new agreement that relates to the PPI - then enter each monthly interest payment that can be attributed to PPI on the second agreement.

 

The 8% then be calculated for you on the total.

 

Off the top of my head, from a quick look of the figures I would guess your claim would be in the region of £3273 + £937 + approx £1600 for 8% interest. But that is just a quick calculation.

[Filthy Monkey]

Thanks, Alan. I'll download the spreadsheet and do it this way.

[Filthy Monkey]

No real update yet, but I spoke to my bank via phone banking and they advised that I would have to take up my complaint with the branch where I took out the loan. I was up in Glasgow yesterday, so I popped in and explained why I was there. Within a couple of minutes I was whisked off to the manager's office, where I explained my case and, to be honest, she couldn't have been nicer. She has asked that I put my complaint in writing to her and said that phone bank should have advised me to send a note of my complaint to the complaints' department, rather than the branch. Typical banking incompetence, I suppose, but I will write the letter anyway and hand it in to her next week. Just to cover myself, though, I'll also submit CCA and S.A.R to the bank. I'm going on holiday for a couple of weeks, so hopefully something will be waiting for me when I get back. I guess I can only live in hope...

[skbuncks]

With bank charges we always suggested that people wait until court as the matters were still untested in court. With missold PPI, there is no argument that the PPI was missold and you therefore have an entitlement to claim interest on the money they have taken - from the date they took it.

 

Sorry for the brief Hijack but what is the legal basis for this as i've just started off a second PPI claim from Lloyds

 

skb

 

ps good luck FilthyMonkey, in my own personal experience I can say that Lloyds have paid out on my previous claim without too much trouble

[alanfromderby]

I will be happy to answer that on your thread.

[skbuncks]

Cheers alan, I hadnt done so but have now started a thread here

 

skb

[Filthy Monkey]

I don't suppose anybody has a copy of the terms and conditions of Lloyds PPI on a Select Loan With Insurance from Nov. 2001? I've found my loan agreement, but have nothing to state what the employment exclusions in the PPI were. The woman I spoke to at my branch seems to be under the impression that people on fixed term contracts have always been covered, so I'd like to make sure before I write to the bank.

[skbuncks]

I don't suppose anybody has a copy of the terms and conditions of Lloyds PPI on a Select Loan With Insurance from Nov. 2001? I've found my loan agreement, but have nothing to state what the employment exclusions in the PPI were. The woman I spoke to at my branch seems to be under the impression that people on fixed term contracts have always been covered, so I'd like to make sure before I write to the bank.

 

Not so, there are even to this date exclusions to cover for people on fixed term contracts. I dont have old T&Cs but Lloyds current ones, which can be found here state the following on page 18:

 

You will not be covered for any period of unemployment which:

 

-results from the end of a fixed term contract, except where you have:

-worked continuously for the same employer for at least 24 months, or

-been on a contract for at least 12 months and had that contract renewed at least once, or

-originally been employed on a permanent basis by the same employer but were transferred to a fixed term contract by the employer without a break if your employment, or

-you are notified of, or which begins within 30 days of you singing your loan agreement. (if this exclusion applies to you and your loan was refinanced, please refer to the Refinanced section of this policy document on pager 32), or

 

I couldn't be bothered to type them out but there are a couple more exclusions to do with being sacked and pre-existing medical conditions full details of which are in the link above

 

skb

[Filthy Monkey]

Brilliant, thanks for this. It confirms that, assuming the terms were the same when I took out my loan, I was ineligible for unemployment cover, so it is clear that the policy was mis-sold.

[Filthy Monkey]

Well, I have received loan agreement, statements and, finally, a response from the bank, thanking me for bringing the matter to their attention.

 

The letter says that they have investigated the complaint and note that I took the loan out in November 2000, together with optional PPI. They say that my letter to them states that I was aware of the policy and the terms and conditions and that I would have been provided with a copy of the policy booklet, explaining the cover provided an that if I was unhappy with the policy, I could have been cancelled it within 30 days.

 

They then go on to say that the FOS guidelines state under section 2.3 Time Limits for referral of compaints to the FOS (DISP 2.3.1 (1) ©:

 

The Ombudsman cannot consider a complaint:

 

More than six years after the event complained of or (if later) more than three years from the date on which he became aware (or ought reasonably to have become aware) that he had cause for complaint, unless he has referred the complaint to the firm or ombudsman within that period and has a written acknowledgement or some other record of the complaint having been received.

 

The letter goes on to say that the length of time that has elapsed since the sale of my policy is such that any allegation of a mis-sale made after this time would be prejudicial to the firm being able to defend it.

 

So, typical bank response and only to be expected. Now, this is where I need some help! Am I right in thinking that the fact that I have only become aware that the PPI was mis-sold allows me still to make a valid complaint?

 

First of all, the PPI was not sold to me as an 'optional' policy. I was told that I had to take it or I wouldn't get the loan. Secondly, as I was self-employed at the time, it didn't provide full cover. Finally, I was not given a copy of the policy booklet, so had no idea that I could cancel the cover within 30 days. If I had known this, I would definitely have cancelled it. Nothing was explained to me when I bought the policy.

 

I'd appreciate any views on this and advice on where to go next. Is it LBA time...?

 

Thanks!

 

FM

[tonycee]

The Ombudsman cannot consider a complaint:

more than three years from the date on which he became aware (or ought reasonably to have become aware) that he had cause for complaint,

Very nice of them to point this out to you.

 

Am I right in thinking that the fact that I have only become aware that the PPI was mis-sold allows me still to make a valid complaint?

See above. And thank them with a chuckle.

 

First of all, the PPI was not sold to me as an 'optional' policy. I was told that I had to take it or I wouldn't get the loan. Secondly, as I was self-employed at the time, it didn't provide full cover. Finally, I was not given a copy of the policy booklet, so had no idea that I could cancel the cover within 30 days. If I had known this, I would definitely have cancelled it. Nothing was explained to me when I bought the policy.

All the classic examples of misselling.

 

I'd appreciate any views on this and advice on where to go next. Is it LBA time...?

 

My view is, they will give you the run around for as long as you let them.

Politely, and sometimes confusingly, but the run around never the less.

 

Do you have the insurance policy.?

 

Yes its time for LBA.

[YEOSAL]

Well, I have received loan agreement, statements and, finally, a response from the bank, thanking me for bringing the matter to their attention.

 

The letter says that they have investigated the complaint and note that I took the loan out in November 2000, together with optional PPI. They say that my letter to them states that I was aware of the policy and the terms and conditions and that I would have been provided with a copy of the policy booklet, explaining the cover provided an that if I was unhappy with the policy, I could have been cancelled it within 30 days.

 

They then go on to say that the FOS guidelines state under section 2.3 Time Limits for referral of compaints to the FOS (DISP 2.3.1 (1) ©:

 

FM

 

Hi

I am in the same boat. Self employed, loan forms had ppi boxes pre crossed so took the "optional" out of optional if you know what i mean.

 

My loan was from Nov 2000 - 5 year term. I have not got T & C and i think that i probably have never had them as i never throw anything away! I have received final response from them and am going to go down the court route, but first have requested a copy of the T&C from the time the loan was taken out. I bet they have them as am sure they will rely on them in court.

 

Will give them a week and then start proceedings. Post again if you have any news with your claim and I will post back if I get T&c copy.

 

Good luck

Sally x

[Filthy Monkey]

Hi Sally, I've been a bit lazy recently and haven't written back to them yet. I'll do it this week and let you know how I get on

[Filthy Monkey]

Okay, I finally wrote back to Lloyds TSB Insurance Services about the PPI on my loan, reiterating everything I mentioned in my last letter and pointing out to them that I only recently became aware of the practice of mis-selling, so was still within my rights to complain. They responded today with the following -

Dear Filthy Monkey,

 

Thank you for your recent letter, however I must refer you back to our letter dated ***** 2008. This was a final response letter and if you remain unhappy you will need to contact the Financial Ombudsman service regarding your complaint. You have 6 months from the date of our last letter to contact the FInancial Ombudsman service regarding your complaint. A leaflet was enclosed with my last letter giving you information on how to contact the Ombudsman.

 

Yours sincerely,

 

 

Unhelpful bloke from the bank.

 

So, I guess I either need to go through the FOS or I need to take them to court, which is where I could do with some advice... As my loan was taken out pre-2005, can I still go through the FOS, or do I need to go straight to court on this one?

 

Thanks,

 

FM

[doolally lady]

I'm going after them for PPI on a credit card, PPI taken out in 1999 and cancelled in 2004. Had my big fat 'no chance' final response from them and although I am quite willing to take them to court, I phoned the FOS to find out if they would look at my claim and they have agreed to do so. It would be worth you giving the FOS a call and asking them, you still have the option of going to court, either if they are unable to help or if you don't get the result from them that you are entitled to. Good luck in whichever way you are able to go.

The one thing that the FOS told me was that even if they are unable to look into your claim they can still take your complaint against the supplier. It would be well worth everyone complaining to them even if they have to use the court route.

 

Regards,

Doolally.

Edited May 31, 2008 by doolally lady
grammar

[Filthy Monkey]

Thanks for this. I'll give the FOS a call on Monday. If that doesn't do any good, I'll go down the court route. Either way, I'm not letting those thieving ***** get away with it!!!