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Another credit card PPI contractual interest query!

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Hi everyone:)


Although I have a specific thread regarding the mis-sold PPI on Mr Landy's MBNA account 2, I have a couple of queries relating to credit card contractual interest that I thought would get lost on that thread and may be of benefit to other PPI claimants if it was dealt with separately.


Now we all now that some credit card providers (MBNA are a prime example) are reluctant to refund interest at the contractual rate on mis-sold PPI. I have already had one MBNA mis-sold PPI complaint upheld by the FOS that didn't include any contractual interest - and barely any 8% simple interest for that matter.


On that occasion MBNA said they would not be paying any contractual interest because there was no credit balance to calculate interest on. They only ended up refunding 'associated interest' of around £30 on £600 of PPI premiums dating from 2005. When I queried it with the FOS, they said MBNA were correct to do this.


I now think I understand that the reference to 'no credit balance' was because MBNA had 'charged off' the account, sold it to a DCA and therefore there was indeed no credit balance (nor indeed any account!) as far as MBNA were concerned :eek:


Now I am in the same position again, but this time MBNA have spoken to Mr L on the phone (despite me always reminding him not to speak to these people!) and actually offered to refund his mis-sold PPI before it even got to the FOS. Their offer so far amounts to PPI premiums only - around £900 dating from 2004-2007.


As this account has also been sold to a DCA, I foresee the same scenario re: interest cropping up and I'm wondering what the legal position is regarding this..........if it were to go to court (I'm not going to bother with the FOS this time) would they say MBNA are correct in saying that they don't have to pay contractual interest when the account in theory has no credit balance?


I should point out that Mr L rarely paid the account off in full and when he stopped using it in 2007 there was a balance outstanding of around £3000 (against a £5k limit) which is still owed to the DCA.


My second query relates to the fact that I have seen it discussed that credit card providers should not/do not always/claim they do not charge interest on the PPI premiums.


Pompeyfaith said on one thread that the PPI premium should be the last item on your credit card statement and that if it's not and that the interest is it means they have been charging interest at their contractual rate on the PPI.


I have been through Mr L's statements this afternoon and the interest was always applied to the statement after the PPI - so he was definitely charged contractual interest on the premiums.


Therefore as far as I can see he is entitled to have the contractual interest refunded - yet once again going by my previous MBNA complaint the FOS don't seem to be in agreement with this.........


I know I am going to be urged towards court action - which Mr L is keen to avoid - but if I was going to force him down that route I want to be certain of my facts on this.


I would appreciate comments/advice on this please!


Many thanks,


Landy x

LTSB PPI on various loans (current/settled) - Refunded inc 8%


MBNA 1 Charges - Refunded inc CI


MBNA 1 PPI - Refunded


MBNA 2 Charges - Refunded inc 8%


MBNA 2 PPI - Refunded


MBNA 2 Accident Ins - Refunded


Swift Advances (settled) Mortgage Charges -Partially refunded


Swift Advances (settled) Mortgage PPI - Refunded inc CI & 8%


Sainsburys (settled) Loan PPI - Refunded inc CI +8%


Sainsburys (closed) Card Charges - Refunded inc CI + 8%


M&S Money (closed) Card Charges - Refunded inc CI


M&S Money (closed) Card PPI - Refunded inc 8%


Direct Line (settled) Loan PPI - Refunded inc CI + 8%


Debenhams Card (closed) PPI - Refunded inc 8%


Swift Mortgage Charges -Refunded


Hitachi Finance (closed) Charges - Refunded

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This explains why mbna offered me £1900 rather than the £2800 I actually claimed. Do they only have to pay the 8% stat interest on top of the premiums if it goes to court? (I never claimed the contractual interest, only stat 8% as the statments they provided were only transaction printouts, and didn't have the monthly balances on)

HSBC - Pre Lim sent 12-12-06, LBA sent 27-12-06, reissued 5-1-07. Part offer rejected 17-1-07, MCOL 19-1-07, AQ - 21-2-07. Settled

Nationwide - S.A.R. sent 13-12-06, Pre lim sent 5-1-07, LBA sent 19-1-07, MCOL 2-2-07, WON 22-2-07.

Capital One - S.A.R. sent 13-12-06, Pre lim sent 17-1-07, LBA sent. Settled

MBNA - S.A.R. sent 13-12-06, Offer rejected 19-1-07, Pre Lim 19-1-07, LBA sent, Setteled 21-2-07.

MBNA Loan PPI - Pre lim sent 19-2-10, Settled.

MBNA CC PPI - Pre lim sent 19-2-10, WON 2-7-10.

HSBC PPI - Pre lim sent 19-2-10, with Court

EGG PPI - Pre lim sent 19-2-10, FOS upheld 3-7-10

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