Camdenite Vs MBNA Abbey ** PARTIAL WIN**

[TINK660]

Joining in

 

Very interested in this thread as I am waiting for a goodwill offer from MBNA, I totally agree that from MBNA statements the ppi element attracts interest at their contractual rate and that if they have charged it they should give it back.

 

I have accepted two refunds on ppi on front loaded loans with just 8% interest as I dont believe contractual interest could be claimed as the interest is calculated at the beginning of the loan, therefore as Alanalana says the interest is already included in the payments.

 

It seems that maybe the FOS have taken too broad a scope on the issue of ppi as it clearly depends on what type of credit you have.

 

Tink

[TINK660]

I agree with this totally - now, how do we get this point across to the FOS and credit card companies.

[TINK660]

Camendite,

 

Out of interest - what was your interest rate that you were charged by MBNA?

 

It would seem that we really need clarification by the FOS as to what their statement "(A) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;" actually means.

 

In my opinion it would appear that if for example the PPI payment one month was say £20.00, and the interest rate was 20% per annum, then MBNA are applying a rate of one twelfth of 20% to the amount of £20.00 ie £20.00 divided by 100 x 1.66 = 33p.

 

Anybody else thinking down the same route?

 

I would hazard a guess that your interest rate was 1.80% per month.

[TINK660]

Just received MBNA letter

Details of refund are as follows:

 

PPC £670.82

Associated Interest £70.45

8% - £388.63

Distress and Inconvenience £100.

 

No details of how they have arrived at these figures just a letter saying they have compled with the refund guidelines set out by the Financial Ombudsman Service.

 

Sending them a letter today asking for a breakdown of their calculations and pointing out that as the ppi payments have been added to the account every month and interest added on to the resulting balance the interest should be compounded at their contractual rate.

 

This is what I believe constitutes the FOS guidelines of refunding any associated interest.

 

Will also contact the FOS with regards to the same.

 

If they can pay compound contractual interest on credit charges refunds then the same should apply to ppi payments.

 

Tink

[TINK660]

Have just spoken to the FOS concerning the above and explained that I and several other people in the same position are concerned that the interest is not being applied at the compound contractual interest rate as the ppi premium increases the balance month on month and interest is charged on this balance. As they have refunded compound contractual interest on credit card charges the same should surely apply to ppi premiums.

 

It was quite difficult to get my point across as she didnt seem to grasp what I was trying to say and kept referring to the 8% being applied only if there was a credit balance. I explained that this wasnt the issue I was referring to the statement "(a) reconstruct the account by removing any premiums in respect of the PPI and ANY associated interest or charges in respect of those premium"

 

She asked me if I was debating that the guidelines that they follow to redress were correct and I told her that I was.

 

I believe the guidelines should be clearer to interpret and I think that companies will deliberately misinterpret these to their own benefit.

 

She said that in that case the file will be reopened and passed to an adjudicator to address that concern although it will be a few weeks before I hear anything.

 

Will let you know of any more news - perhaps we should all take up this point with the FOS so that they make the way in which they approach redress clearer.

 

This redress would be fair on a front loaded loan ppi complaint but not for credit card ppi complaints.

 

Phew - my brain hurts now!

[TINK660]

Hi all,

 

MBNA have refunded the refund to my husbands account and have started the phone calls again.

 

Told the person on the phone that the account is still in dispute as cannot agree with their figures and have no breakdown of their calculations to compare. Explained about the compound contactual interest issue but he didnt understand what I was talking about. Also told him that no further payments towards the account would be made until the dispute is settled.

 

I am not giving up the the compounded contractual interest issue as when we claimed back credit card charges the figure to settle included compound contractual interest and I cannot see why they can apply it to the charges but not to the PPI premiums.

 

Sorry Camdenite I am not trying to hijack your thread just share my experience.

[TINK660]

Just a snippet I found which I believe explains what compound interest is and that it should indeed be applied to credit card ppi premiums.

 

Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding (i.e. the interest is compounded).

Will put this in my letter to FOS.

[TINK660]

Just to let you know I received a letter today from FOS in relation to the telephone call I made about compounded contractual interest and querying the FOS guidelines on such

 

One hopeful looking paragraph reads:

 

"You advised that a complaint in relation to default fees would receive compounded interest and the same should be applicable for this complaint. I would like to point out that default fees and charges are a penalty to be paid in relation to going over and above the agreed limitation with a bank. The nature of these penalty charges may warrant compounded interrest however the same redress guidelines would be applicable to a complaint about PPI"

 

The complaint file has now been reopened for a full adjudication process by an Ombudsman. They are asking MBNA for a full breakdown of the redress calculations and will take it from there.

 

It also says:-

 

" I understand that the query is not that the redress calculation has been incorrectly calculated but that you dispute the redress guidelines as agreed by the Ombudsman and the business"

 

So get those letters in - the more weight we can add to this issue the better!

 

Let you know how things progress but feeling a little more hopeful.

[TINK660]

Good stuff Camdenite, I really hope that they sit up and listen to what we are saying about CI, lets see who gets a reply first, are they passing your file to an Ombudsman now like mine?

 

We can all help each other if the FOS dont take this on board. Like you say it may be off to court we go with this, but I do hope not as so far I havent had to take the court route with any of my claims, but as I have ongoing complaints with MBNA, Mint (rbs), Egg and Goldfish (all with the FOS) it may be that I have to.

 

Keep us informed of any progress as will I.

 

Best of luck.

 

Tink