Welcome Finance PPI

[hosted]

Morning all,

 

Today i received a letter from lewis debt recovery demanding £2300 in relation to an outstanding account with welcome finance. This was from a hire purchase agreement which i voluntarily terminated. i was by my own calculations £1380.64 away from the 50% mark in which i could walk away Scott free but intended to sort out the remaining sum with welcome finance.

 

Lewis debt recovery have ignited the fire in my belly and now i intend on reclaiming my ppi. i still have all the paperwork from welcome finance. it appears that everything including the interest was added at the start of the agreement and then split into 48 payments.

 

12019.04 total amount for goods

5196.48 total amount for insurances

 

17215.52 total amount payable

 

17215.52 minus 400 part ex on old car divided by 48 = £350 which were my monthly payments.

 

now by my calculations 30% of the monthly payment was for insurance @ £105 first payment was made on the 29/10/07 and i made 12 payments before voluntarily terminating the contract.

 

So by my calculations welcome finance should be writing off £1333.39 (this includes 8% interest) of the loan if my claim for missold ppi is won. which means i still owe welcome 47.25 but i would be willing to pay this to have said claim settled.

 

Appreciate this is a long read with lots of figures, Ive done all the hard work would just appreciate someone scanning over and confirming if i have calculated the amounts in the correct way.

 

Also have i read somewhere that it is wrong to charge the interest in the way that welcome have, i.e. at the start of the claim?

 

kind regards in advance for all your help

 

Hosted.

[Ricecake]

Just wanted to say Good Luck.....

[hosted]

further to my original post, i have just read the following

 

 

"If you have a single premium policy, rather than regular premium, this may also be the foundation for a refund. The Financial Services Authority (FSA) and PPI lenders agree in March 2007 that borrowers who had cancelled their single premium policies should be refunded, overturning a previous no-refund policy on these contracts. This means that if you've cancelled a single premium policy for any reason, you can now claim a proportional refund, plus interest.

The Financial Ombudsman Service says the majority of complaints that it upholds are related to single premium policies sold on unsecured loans"

 

 

Can anyone advise if my policy is classed as a single payment as it was all costed togeather at the start and then broken down into monthly payments.

 

Kind regards,

 

Hosted.

[Sand-Dancer0191]

This is certainly a single premium policy...PLEASE read this

 

 

 

PAYMENT PROTECTION INSURANCE

 

 

 

Before reclaiming or cancelling PPI you should have a look at the following Notes and see what type of PPI you actually have. Always consider all the facts and figures before starting a claim.. Whatever you do Do Not Just Jump In without researching your own policy, and don’t be afraid to ask for help / advice on the forums on CAG.

 

 

There are basically 2 types of Payment protection Insurance policies.

1) Monthly paid premium (as used by most of the credit card companies)

These policies should not be a big problem to cancel; normally they will cancel this type of policy if you write to them or Phone them. Of course if you consider that you have been mis sold this type of policy you can of course try and reclaim all the premiums that have been made, plus claim the interest on each payment at the Contractual Interest Rate.

 

2) Single Premium Policy (these are the biggest rip off ones) These policies are

Paid for in full to the insurance company at the start of the policy. Most loan

Companies will finance the full cost of the policy by adding the cost onto your loan. What they do not tell you is that you will also be paying interest on that amount at the loan interest rate for the full term of the loan.

 

Example 1. PPI Cost £3300 Interest Rate 7.9%APR Interest payable over the 5 year loan = £1300 Actual cost of PPI cover £ 4600.00

Example 2 PPI Cost £3300 Interest Rate 7.9%APR Interest payable over the 15 year loan = £3913.00 Actual Cost of 5yr PPI Cover £ 7213.00

As some loans have variable APR the costs used in the above examples could be in fact a lot higher.

Most of this type of Policy will cover you for 60 Months (5yrs) so beware if you have taken out one of these policies and have a loan which runs over the 5 year period. As in example 2 you would require a further 2 * 5yr PPI policies to cover the full loan period.

 

I did one calculation on an original loan of £17,000.00 , when the PPI was added and calculated to cover the 15yr period; with an APR at 7.9% fixed the actual cost to repay the loan was calculated at almost £55,000.00.

 

Cancelling a single payment Policy, This can be a bit trickier than a standard monthly paid policy. These policies will offer a very small percentage of the premium should you just cancel it. An example of this is shown below. Their answer to this part is normally that the insurance premium pays more in the early stages of the loan as there is higher risk. (Yeah - higher risk to the lender and not the Customer)

 

£3300 policy which had been running for 3yrs, Refund of £97.00 if cancelled.

 

Some companies will state that the only way that you can cancel one of these policies is to refinance and settle the complete loan agreement with a new loan without PPI on the new loan. Some of the lenders will also try and fob you off with excuses like, you may not get a new loan at the same low %APR without PPI. Some will also state that you may not in fact be able to obtain a new loan from them at all; this of course is all scare tactics to try and make you change your mind about cancelling the loan etc. If your credit rating is not good then they will use this against you too.

 

In my own case I managed to obtain a new loan from another provider at a far better %APR (5.8%) rate without PPI, though they did really try and sell their PPI..lol. I also took out a stand alone PPI policy from an Independent provider at well under a tenth of the cost I was quoted from the new Lender. Personally I have nothing against PPI Insurance, in fact I think it is a good thing as long as it sold properly and not at an extortionate rate like it is by the major High Street Banks and Loan Companies.

 

3) Mis Sold Policy The mis selling of these policies is a major concern not just for

Consumer but in fact the FSA and the OFT are looking into this whole

matter.

 

Have you been Mis Sold PPI. (Some standard Conditions for PPI)

 

a)Payment Protection Insurance cannot be made a condition of obtaining a loan. (This is the most common reason for mis selling)

b) You are permantley resident within the United Kingdom

c) You are Over 18 and Under 65 at the commencement of your loan, and you will not reach the age of 70 during the insured term.

d) You are in Full time employment – Some policies define Full time employment as being working Over 16 Hours per week and that you have been in full time employment for at least 6 Months prior to the start date of the policy.

e) Pre Excisting Medical Conditions may also Invalidate your Policy

f) Some policies may cover if you are self employed.. Check your T & C first though.

 

** Latest Additions to be added to above (thanks Todge)**

 

1 You were not in work or self employed at the time of sale

 

2 You were told that you had to take the PPI out at the same time as the loan or not at all

 

3 You were not asked whether you had any other insurance which would cover the loan

 

4 You were not told you could buy PPI elsewhere to cover the loan

 

5 You were sold a policy which had age restrictions which you fell outside of

 

6 You were led to believe that Payment Protection Insurance was compulsory

 

7 You were told that you would stand more chance of getting the loan if you took the Payment Protection Insurance

 

8 It was not explained to you that there were certain exclusions within the policy that could affect you

 

9 You were pressured into buying the PPI

 

10 You paid upfront for the PPI but it was not explained that there were some PPI policies where you could pay monthly

 

11 Your PPI was an upfront premium and you repaid the loan early and received no refund

 

12 You increased your loan and the PPI was increased automatically

 

13 The Terms & Conditions of the small print were not fully explained to you

 

 

You should in the first instance read through the full terms and conditions of your Payment Protection Insurance Policy. If you do not have these I would personally advise you to contact the Insurer and request these. If you do have to contact the Insurer for a copy of the terms and conditions you will need to know the date that you signed up for the policy, Request a copy of the terms and conditions relating to the policy that they had in place on that date.

 

I would personally always deal with complaints regarding PPI by way of letter, unless you have the ability to record any telephone conversations regarding the complaint.

Obviously should you have to take the complaint to court, the more evidence you have in writing the better.

 

Some Interesting Facts Regarding PPI.

On some Single premium PPI policies the actual cost for the insurance can be a low as 10% of the cost charged by the lender …That’s a whopping 90% straight profit for the lender.. Plus of course the extra Interest that they will make.

 

Out of all the types of Insurances Policies available ( Car, Home etc) PPI has the lowest percentage of payout in claims, Making PPI the most profitable Insurance Policy currently on the market.

 

Payment Protection Insurance has the highest rate of claims for Mis Selling than any other Insurance policy available.

 

Most policies will only pay out for 12 Months maximum in any 1 claim.

 

 

I hope this has helped, If you have any queries please do not be afraid to ask for help or advise in the forum.

 

If you find any Interesting information relating to PPI I would be grateful if you could pass it on to me, I’m on a bit of a Mission with PPI..lol

 

Additions to Post 22/3/07..

 

 

Reclaim your PPI premiums

There's no need to pay someone a fee to pursue your mis-selling claim. By following our guide - and using our letter template - you can right the wrongs committed by your bank or lender. You will find the downloadable letters at the bottom of this page.

Here we explain how to decide whether you have a case for reclaiming your premiums, and how to go about it:

The background

Payment protection insurance generates billions of pounds for banks and building societies and is widely recognised as being routinely mis-sold. The policies are designed to repay a particular debt if you find yourself out of work. We know of many instances when borrowers have been forced to buy an expensive policy as a condition of being offered a loan.

{I:1}

Do you have a mis-selling claim?

• Being forced to buy a PPI policy in conjunction with a loan does not breach FSA guidelines. But the FSA says that fact does not exclude borrowers from making a mis-selling complaint to the Financial Ombudsman, who assesses whether the way the policy was sold was fair and reasonable.

Banks and lenders who subscribe to the Banking Code agree they will not force customers to also buy their payment protection insurance, but they can insist on them having some form of PPI.

We have heard a litany of complaints from borrowers who say unscrupulous salespeople told them they would not get a loan unless they signed up to the lender's own protection insurance. If this has happened to you, you should pursue the bank through its usual complaints process. If you have no success, the next step is to complain the Financial Ombudsman.

• You may also have a case for mis-selling if you have been sold a policy while you are self-employed, unemployed or retired – all of which make PPI void. PPI policies are valid only for people who are employed by someone else and the lender or insurer should have checked your employment status when they sold the policy.

• Most policies do not cover you for loss of income caused by a wide range of illnesses or ailments, including mental illness and back trouble, which keep thousands of people off work each year. A lender or insurer should warn you that illnesses like these, and other pre-existing conditions that might keep you off work, will not be covered.

• If a lender sells you a PPI policy with a card or loan, it significantly increases the interest rate you will be paying. Lenders are obliged to advertise the total APR so you know exactly how much your monthly repayments – including insurance – will be. If they haven't, you can pursue them for mis-selling.

The lender should also have explained to you the full cost of the policy, and how your monthly repayments without insurance would be affected by adding insurance to the loan or credit card agreement.

If your lender did not do any of these things, you may have a claim for mis-selling.

Additionally, you may have a claim if you have tried to cancel your PPI policy, and have been refused, or if you have cancelled the policy part-way through the loan period and received a smaller reduction in monthly payments than you were expecting.

[dx100uk]

go get em!

 

dont forget to charge them 8% stat on the PPI you paid each month to the date of you claim.

 

dx

[hosted]

Thanks sanddancer, I take it the names regional given the 0191 at the end. i live just across the water from you.

 

That post was very informative.

 

Do my figures look correct to you?

 

Ive drafted a letter and was just waiting for someone to look over the figures before I include them and post it.

 

dx100uk if my calculations are correct then its already on.....................i think

 

kind regards

 

Hosted

[Sand-Dancer0191]

Hi HOSTED ....region correct

 

One interesting point - why apply 8% interest on your claim when you are paying X amount on the loan. If you are paying say 20% surely thats the interest you should claim back. NOW who owes who money.

[dx100uk]

well if you workout what % of the PCM was PPI thats done for you already

you just add 8% on for each month from each date paid.

 

simples,

 

dx

[materhorn]

i have just claimed back £4,700 back in mis-sold ppi from welcome, sent 3 letters and they upheld my claim i am now debt free,

 

stick in and be pessistant they seem to be a bit better to deal with now.

[Ricecake]

materhorn how long did it take ? oh and well done

[materhorn]

since the beginning of march this year, but i had not missed a payment and had paid a bit more each month so i was in credit

[Ricecake]

oh cool same here right smack bang up to date....sooooo fingers crossed !

[materhorn]

Good look by the way