Paragon -missold PPI? loan still live

[sinkingfast]

Hi everyone,

 

I was wondering if someone could give me a little advice please.

 

In November 2004 we took out a secured loan with Paragon out of sheer desperation to consolidate debts we could not pay. (If only i knew about debt management plans then this story may be a little different -oh well!) We borrowed £40,000 over 20 years and were told they had a special deal on PPI whereby if we didn't claim after 10 years we would get £10,000 back. Like i say we were desperate and Paragon were the only people who would lend us any money so we just went along thinking we had got a good deal as hopefully we wouldn't need to claim and would get our £10,000 back so hadnt lost anything and if we did need to claim, good job we had the insurance - Win win we thought! Our original payments were £420 a month but are currently £520 a month because of interest rate rises.

 

However it wasn't until i requested an early settlement figure last year that i realised something was amiss as to settle they wanted £48,000 - £8000 more than we borrowed!?! But even then i thought well we are just stuck then aren't we.

 

I came accross this site whilst looking for help on something else but read the PPI misselling section with interest.

 

I phoned Paragon last week and asked about cancelling PPI. They sent me a letter saying that if i cancel PPI i would get a rebate of £1600 (which would be knocked off the loan) and my payments would reduce by £20 a month. How is this so?!? Have i spent the last 3 years just paying the PPI? I have paid them around £15000 so far and i've got 17 years to go!

 

Does anyone think i have a case to claim for missold PPI and are my chances good? I had no idea they would charge interest on the £10000 and feel stupid for not realising i am going to pay them back £120000 for a £40000 loan!!!! But i was desperate and didn't talk to anyone else about it because i was ashamed i had let things get so bad. Also if i start to claim and lose can they do anything about the £10000 i am due to get back in 6 years and 10 months?

 

Thankyou for reading.

[Jonny Insider]

You've certainly got a case. This is typical of this type of PPI product. The cost of the insurance is added to the loan as a lump sum at outset and you pay interest on it throughout the term of the loan. Thus, whilst you might get back your original premium after 10 years, you do not get back the interest. If you then try to cancel the insurance early (including if you pay off the loan early), you only get a small fraction of your premium back. If this wasn't explained to you clearly by the salesman, you'd have a good case with the Ombudsman. These companies know that the vast majority of lenders will pay off their loans early and that is how they make their money - through early settlement charges and low refunds on PPI. Make a formal complaint and make it clear you will go to the Ombudsman if you don't get a fair result. Both the early settlement charges and the low rebate on the PPI are likely to be chalenged by the Ombudsman and Paragon will know this.

[Hopeful1]

Hi Sinkingfast.

 

Did you get the offer of £10,000 back in 10 years in writing?

[sinkingfast]

Hi thanks for the advice i will certainly have a go, I dont' think i have anything to lose.

 

Yes i have a certificate saying i get £10000 back after 10 years provided i haven't made a claim or been more than 2 payments in arrears.

[Hopeful1]

Hi thanks for the advice i will certainly have a go, I dont' think i have anything to lose.

 

Yes i have a certificate saying i get £10000 back after 10 years provided i haven't made a claim or been more than 2 payments in arrears.

 

They're not giving you much room to manouevre with no more than 2 arrears payments :o

 

Good luck with your claim, you'll find lots of useful info around the site. Keep posting your progress

[sinkingfast]

I know but obviously £120000 isn;t enough for them so they would rather not give the £10000 back!! Feel so daft now but no point looking back must keep looking forward.

 

Thanks for your support i will keep you posted.

[Hopeful1]

I know but obviously £120000 isn;t enough for them so they would rather not give the £10000 back!! Feel so daft now but no point looking back must keep looking forward.

 

Thanks for your support i will keep you posted.

 

 

Don't be too hard on yourself. I can do the same now and look back at decisions i've made and think "Good God!" Hindsight is a wonderful thing though. I too made decisions out of desperation and was too embarrassed / ashamed to tell others.

 

At least with the knowledge we gain from here we have a chance of fighting back...

[sinkingfast]

Thankyou, Yes there is some brilliant advice on this site, enough to make you feel empowered just by reading it! Have a good day

[Suzywong]

i was wondering is there a letter that would help in this particular case as i can not find one that is relevant to secured loans - i have the same problem

[sinkingfast]

Hi sorry to be pain but i have been reading and reading and i am getting confused!!! I am thinking template letter 2 from the sticky posted by reidnet is most applicable to me (with some ammendments) but i have no idea how much of my monthly premium has been ppi payments or how much interest has been paid. should i do some fact gathering first before i send this letter and do a S.A.R. and get a breakdown?

[Suzywong]

thats my problem as well i have no idea how my payments have been assigned. looking at my latest statement it does not show either?

[sinkingfast]

Hi all hope you had a good weekend. I have been mulling this over all weekend and have drafted a letter which i would appreciate comments on. My problem is i am still paying the loan and insurance at the moment and i don't want them to just cancel the insurance and then me lose any claim/complaint i make and i end up losing the £10000 at the end of 10 years anyway. I'm a bit scared of making a mess ......

 

ACCOUNT NUMBER: xxxxxxxxxxxxx

 

Complaint and Request for Return of PPI Insurance Plus Interest.

 

Dear Sir/Madam,

 

 

I took out a secured loan with yourselves in November 2004. When I took it out, I signed up for Payment Protection Insurance as I was lead to believe I had to do it there and then or not at all and was not aware that I could shop around and get payment protection from another source. I telephoned to cancel the PPI insurance and was told that I would receive a letter detailing the amount that I would be reimbursed and my revised monthly payments. I was horrified to read that I would only be reimbursed £1600 and that my monthly payments would only drop by £20 a month. How can this be? The insurance was £10000 for 10 years cover and I am only 3 years into the loan?

 

When I took out the Loan, I was told that the Insurance was only available if I took it at the same time as the loan as it was a special deal and that at the end of 10 years if I hadn’t made a claim I would get £10000, the full cost of the insurance back. I was lead to believe this was a win-win situation for me, however I have since learnt that the £10000 was added to my loan and that interest has been charged. I also have excellent sickness cover provided to me through work (6 months full pay and 6 months half pay) and excellent life cover through my work pension. This was not investigated by the salesperson at all. I therefore consider that I have been mis-sold this expensive insurance, for the following reasons: -

 

1) I have been sold a single premium insurance policy and it was not explained to me that I would be paying interest on the insurance amount.

2) Important features of the loan were not explained to me – for example, the terms for cancelling the cover.

3) I already had a more that adequate employer sickness/life cover package and was not asked about this.

4) The entire cost of the PPI was not explained to me, and the salesperson only quoted the cost of the loan with the PPI attached, I was not given a breakdown of how much I was paying for the insurance.

5) I was mislead into thinking that if I did not make a claim on the insurance and kept the loan for 10 years I would get the full amount of money I had paid for the insurance back. This is not true as I don’t get the interest back and this was not explained.

 

As I have never received a break down of costs of payment protection insurance I am assuming and interest rate of 12%, which would mean the following:

The cost of the Policy was £10000 plus £12000 Interest making £22000.

 

I request a refund of the policy fee plus any interest paid on the fee.

 

I do not want the payment protection policy cancelling until I am happy that there has been a full investigation and that I have been treat fairly.

I would appreciate a reply to this letter within fourteen days. If you reject this complaint, I would be grateful if you could explain whether you provide an internal appeals process. If you do not, please supply me with a final response letter, so that I can take up the matter with the Financial Ombudsman Service, and if need be make a claim via the small claims court to recover the PPI insurance fee + Interest + costs.

 

All correspondence should be sent to: -

xxxxxx

xxxxx

Yours faithfully

 

 

[fairbank]

I am in the same situation as yourself with Paragon.

 

I have spoken with Central Capital who sold me the laon and PPI at the same time

 

They have fobbed me off but I am using a third party for the claim and intend to take them to courts asap to get my money back

[sinkingfast]

Hi fairbank,

 

Do you mind me asking which 3rd party you are using? Are they no win no fee?

 

Thanks

[fairbank]

I think that you will initially hit a brick wall on this.

 

They will claim that because you took put the loan in 2004 that they were not party to the new regualtions in Jan 2005

 

This is a bluff. They still have legal obligations to you. Do not be put off by them.

 

There are more knowledgeable people on this site who will better advice on this issue

 

Good luck and let me know how you get on - we can compare notes

[Hopeful1]

Hi Stressedmom.

 

You need your own thread for this.

 

I'll ask a moderator to move your post to the best forum and then it will be easier for people to advise you.

 

Sit tight

[Hopeful1]

Hi Stressedmom.

 

You need your own thread for this.

 

I'll ask a moderator to move your post to the best forum and then it will be easier for people to advise you.

 

Sit tight

 

 

In case anyone's wondering the post has been moved to it's own thread:

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/136592-stressedmom-versus-paragon.html?highlight=stressedmom

[fairbank]

I am using a third party for my claim against Paragon, and your case is identicla to mine. I will let you know the outcome of the next few days when I hope to have a legal perspective on this

[sinkingfast]

Thankyou fairbank i would really appreciate it. I have had a reponse from Paragon basically telling me that it is in their terms and conditions that if you cancel ppi you don't get anywhere near what you have paid back and suggested contacting freedom finance who arranged the loan for me. I have drafted a letter to freedom but will hang on a couple of days to see how yours goes. Thanks

[tonog]

I am in teh same boat as me and the wife took a £ 46000 secured loan in 2004. they offered her a payment protection and that they would give it back if she didnt put a claim in. We have been paying in the region of £ 500 per month for the last 3 years or so. We asked for a final settlement figure and they gave us one of £ 50,000 !!!!!. Now we are in a mess as we need to get rid of the loan. Even if we sell our house we wont cover everything ( we have another loan ). My wife is expecting a baby so in a few months we will lose a big income .. HELP !!!!

[fairbank]

Okay my update is as follows.

 

The case is with solicitors and is receiving consideration forpleasdings from a barrister. That is to say they are makeing sure that the the case is watertight and that the court action will mean that I win.

 

Once pleadings have been completed it will go to court in a matter of weeks unless Paragon/Central Capital settle out of court which is likely so they don't get bad press etc.

 

I am assured that the whole process is a matter of a few weeks.

 

Look up ratio money on the web and call and ask for Ross. He has been a start so far. Hope this will help

[sinkingfast]

First of all best of luck to you i hope it all goes in your favour. I have googled ratio money and may give them a go if you recommend them, you tried contacting paragon and central capital first yourself didn't you and got nowhere? Also is your ppi still ongoing? I am worried that they may just cancel it and then i will lose and not even get the £10k back?

[fairbank]

I don't think that they will just cancel it. After all they are getting loads of interest on this every month.

 

I would certainly recommend if you don't think you can pull it off yourself to use a third party and let them take the hassle and pressure from you. You will have to give them 20% but at the end of the day at least you will get the money back in time

[sinkingfast]

Well 80% back is still better than what i am looking at at the moment! I think i will give them a try and i think if i explain to the third party that i don't want the ppi cancelling if we lose it should be ok.Thanks.

[tonog]

I am in teh same boat as me and the wife took a £ 46000 secured loan in 2004. they offered her a payment protection and that they would give it back if she didnt put a claim in. We have been paying in the region of £ 500 per month for the last 3 years or so. We asked for a final settlement figure and they gave us one of £ 50,000 !!!!!. Now we are in a mess as we need to get rid of the loan. Even if we sell our house we wont cover everything ( we have another loan ). My wife is expecting a baby so in a few months we will lose a big income .. HELP !!!!

 

RE; the above- would we still be able to claim the PPi back if the loan is paid off as we will probably re-mortgage very soon and our equity will ( should ) pay off Paragon ??