Camdenite Vs MBNA Abbey ** PARTIAL WIN**

[Camdenite]

 

My feeling is if the PPI was a single premium then the interest would have been applied at the start of the loan and therefore the monthly repayments would have included the interest applied at the onset. With a credit card and variable interest rates applied monthly depending on the balance I believe there would be an issue on reclaiming the contractual interest which would no doubt be a little bit more complex

 

Not an easy fight is it?

 

Hi AA,

 

That is the case with my CC account though. PPI premiums were added to my monthly balance each month.

 

Just to give some background, I had a £3.5K limit, that for the large majority of the time I had the account, was up that limit. I struggled to meet the minimum monthly payments and PPI was always a considerable portion of the monthly "transacactions" on the account.

[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

[landy_alert]

Hi Camdenite et al:)

 

So it appears that we are getting to the bottom of the contractual interest issue -

 

On loans with Single Premium policies the CI is already included so when a company says they are refunding our premiums, they mean our premiums including CI. We are then entitled to a further 8% Simple interest on top.

 

However, with Credit Cards such as those we are discussing here with MBNA, eg, Camdenite's, Livis's, Tink's, mine etc we should still be within our rights to ask for interest to be applied to our refunded premiums at the contractual rate, before any additional 8% SI is added.

 

Is everyone broadly in agreement with this?

 

It means that obviously there will be some disappointments for those who have put in claims for both contractual and 8% on loans (myself included) and who had mistakenly thought they would get the contractual rate on top of the premiums charged, but any refund is better than no refund I suppose.

 

As alanalana says, we just have to convince the FOS now and the whole issue has to have more transparency and be made easier for the novice claimant to understand.

 

We also still have to put forward a convincing argument to MBNA etc that we are entitled to more than just what they describe as 'associated interest' and what appears to be a figure plucked from thin air.

 

Regards,

 

Landy x

[TINK660]

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

[Camdenite]

I've just had an acknowledgement of my last letter from the FOS (even though they were just on copy).

 

It's been passed to the adjudicator.

 

I gave MBNA 28 days to respond confirming their acceptance of my calculations and enclosing a cheque for the balance owed.

 

I can't believe the wheels will move that quickly (on the part of either MBNA or the FOS), and I guess I'll be forced into a court claim if I want to pursue.

 

I'll be back when I have more news.

[Camdenite]

Just to update:

 

The FOS e-mailed to day saying they have "addressed your concerns regarding payment to MBNA and I am awaiting a response".

 

I'm not getting my hopes up too much, but it does seem as though they have not dismissed the notion of CI.

 

However MBNA will dismiss it, no doubt, and then it'll be a case of whether the FOS accept MBNA's defence or order them to pay up in full.

 

I'm not counting my chickens, but I'm over the first hurdle with the FOS at least continuing their investigation.

[landy_alert]

Hi Camdenite:)

 

Still following your progress with interest as the FOS adjudicator made it quite clear to us in their latest correspondence that this was their last word on the subject and that there would be no contractual nor even any 8% interest:(

 

We have yet to decide how to proceed.

 

Keeping my fingers crossed for you!

 

Regards,

 

Landy x

[Camdenite]

I've had a written response from MBNA.

"I am writing further to recent correspondence from the Financial Ombudsman Service regarding the above account.

 

As requested, I have enclosed a breakdown of the redress paid and also sent a copy to the Financial Ombudsman Service".

 

That's all it says.

 

The attached "breakdown" is shown below:

 

 

 

 

 

 

 

 

 

They have not shown any further calculations and I am at a loss to understand how they have calculated even the statutory 8%!

 

As for the premiums paid, they are correct that they started in Sep 01 and finished in Nov 05. Despite my request for the reason why it appears I have had "premium holidays" (Feb 03 and Jun 04 to Nov 04) no further information has been forthcoming

 

There is no mention of what basis they have calculated the "interest" on and the SI 8% only seems to be calculated from Dec' 07 onwards.

 

I want to press on with this but could do with some help in regards to how I respond.

Edited November 6, 2009 by Camdenite

[landy_alert]

Hi Camdenite:)

 

Sorry I can't help you decipher this, but just to say it is the same kind of table of figures as the FOS sent to Mr L last week, the only difference being the headings at the top of our columns are -

 

'Date'----'Premium'----'Associated Interest'----'Interest Rate'

 

and in the 'Interest Rate' column, it merely gives a list of the interest rates he was charged - ie, 27.9%.

 

The accompanying letter from the FOS adjudicator stated -

 

'With regard to your enquiry concerning interest payable at 8% simple per year, MBNA have confirmed there was no credit balance for interest to be calculated on. Please refer to our original offer with regards to our approach to redress payable...........MBNA have calculated redress as per our guidance'

 

They enclosed a copy of the FOS redress guidelines which does say that if a credit balance is produced after any PPI premiums and interest on those premiums have been removed, then credit interest of 8% simple per year will be applied.

 

This they seem to think, justifies MBNA's actions - me, I'm not so sure:confused:

 

I sincerely hope you get to the bottom of this and that maybe aa can shed some light on their calculations!

 

Regards,

 

Landy x

Edited November 7, 2009 by landy_alert
Added something!

[pompeyfaith]

camdenite lol what a load of %?!£ as to there figures clearly not only mbna but also the fos are not doing their job properly time to kick some £!? Have u brought this to the attension of your MP as clearly this gov dept aint got it right PF

[reddannio]

Hi Camdenite,

 

Im also watching with interest having just recieved a similar settlement from MBNA. My PPC repayments and 8% interst figure seem correct but the associated interest figure of £46 on PPC payments totalling £1,450 across 7 years seems strange.

 

Im trying to work out from my statements whether interest has been applied on the PPC payments but cannot get the figure to correspond with the Monthly rate of 2.2071% quoted on my statement, including or excluding the PPC payment for that month.

 

I estimate if contractual interest has been applied including the PPC payments they owe me another £1,600

 

Going to take this up with FOS anyway, very confusing.

 

Red

[citizenB]

Well now thats as clear as mud isnt it?

 

Why are they only giving 8% interest from 2008 ?

[landy_alert]

Well now thats as clear as mud isnt it?

 

Why are they only giving 8% interest from 2008 ?

 

Hi citB:)

 

I can only guess that it's something to do with what the FOS said to us about only paying the 8% when there was a credit balance on the account as per my post this morning.

 

The FOS's exact wording of their guidelines with my highlight in red -

 

'The financial business should:

 

(A) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;

 

(B) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year; and

 

© send the customer a statement showing the resulting balance on the account (with details of how it was calculated).

 

As PF said earlier this can't be right surely:confused:

 

Regards,

 

Landy x

[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.

[steven4064]

THis is a bit hard to decipher without further info. COuld it be that the 'payment holidays' relate to periods when the crdit card balance was zero?

 

When di dyou start your claim? Coiuld it be that the 8% is calculated from then?

[Camdenite]

Hi all,

 

Lots of questions to answer here

 

I'll try and deal with them all one by one:

 

Pompey - No, I haven't brought it to the attention my local MP. I'll certainly consider that if the FOS do not find in my favour.

 

Citizen B - Your guess is as good as mine. I think it's linked to Landy's post about only paying the SI when there is credit balance on the account. That was the time I closed the account as it was cleared. November 05 was the date which I cancelled the PPI, after realising what a rip off it was, not that I'd realised it had been mis-sold at that point.

 

Tink - The only known APR I have is 26.48%. In my previous letter to MBNA when I gave my breakdown plus interest, I asked them to supply information to the contrary, if that's the case. They didn't bother because they don't see it as relevant to this claim.

 

Stephen - The account was up to it's limit of £3,500 and beyond for much of the period shown. It was certainly not a zero balance for the missing months.

[Camdenite]

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.

 

Hi Tink,

 

Just to add, I used Compound interest calculator to calculate the interest due on the premiums.

[Camdenite]

a gentle bump

 

Anyone have any further thoughts on this? I'm not sure whether to counter MBNA's claims with another letter to the FOS stating why I believe the interest is incorrectly calculated or should I just see what their findings are? Also, does the Unjust Enrichment come into play in respect of the interest on the premiums?

[landy_alert]

Hi Camdenite:)

 

I can't see how it would hurt - if nothing else they need to explain exactly what they mean by the reference to a 'credit balance' in their redress recommendations.

 

I'm going to give the FOS another try as I've been going through Mr L's statements and transactions today and for most of the months he had the PPI he did have a credit balance (albeit a pretty small one;)) yet the FOS told us MBNA said he had no credit balance to apply the 8% to - hence he didn't even get the 8%.

 

Not only that, but if the PPI (and interest on the PPI) hadn't been applied his (and your) credit balance each month would have been higher and in Mr L's case a couple more months would have then had a credit balance.

 

I can't help feeling the FOS are so busy, they're just taking the easy option and hope we'll be happy.

 

Regards,

 

Landy x

[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!

[Camdenite]

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.

 

 

That's the same as me. We need a few people to start lobbying them over clarification of this issue. If I was of a suspicious nature, I would say that the ambiguity was deliberate and an attempt to minimise the lenders losses, but I'm not, so I won't.

 

I'm in this evening so will be writing my response to MBNA and copying in the FOS.

Edited November 11, 2009 by Camdenite

[alanalana]

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.

 

quote]

 

That's the same as me. We need a few people to start lobbying them over clarification of this issue. If I was of a suspicious nature, I would say that the ambiguity was deliberate and an attempt to minimise the lenders losses, but I'm not, so I won't.

 

I'm in this evening so will be writing my response to MBNA and copying in the FOS.

 

 

Yes perhaps to time to bring the FOS up to date on the issues of the consumers with regard to Contractual Interest on Credit Cards. I do not believe the same will apply to Single premium PPI on unsecured loans.

 

aa

[Camdenite]

 

 

Yes perhaps to time to bring the FOS up to date on the issues of the consumers with regard to Contractual Interest on Credit Cards. I do not believe the same will apply to Single premium PPI on unsecured loans.

 

aa

 

I'll be doing everything I can to point it out and will let you all know how I get on.

[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.