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Hello

 

I currently have a complaint with the FOS, regarding a PPI policy I was mis-sold in 2005 by RBS.

 

When RBS were investigating the complaint, they told me I could write or go into a branch to cancel the policy. I went into the branch and signed the forms but long story short, the branch messed it up. RBS have admitted they made a mistake and would back-date the cancellation (covering two months of payments).

 

Looking at my account though, rather than refund the over-payment to my bank account they have made adjustments to my loan. Is this right?

 

Two months worth of PPI is approx £120 coming out of my current account which I couldn't really afford (why I was cancelling!). If they had done things right when I went into the branch in July, the amount i paid for the loan each month would have been £60 so in my mind, they should have put that money into my bank account and just made adjustments to the loan for the interest.

 

I was wondering if anyone could offer some guidance on the 'refund' they have done?

 

I'm hopeful that eventually FOS find in my favour which would effectively clear what is left of the loan but FOS have a huge backlog at the moment which is why I did what RBS suggested and go in to cancel the PPI.

 

Hope this makes sense and thank you in advance for your thoughts/comments.

 

Linz.

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Linz,

 

Did you claim the full amount you had paid in PPI?

 

DJ

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Hi

 

I have, but my loan doesn't finish until next year so the bank said I could cancel the policy.

 

Rather stupidly, I took out PPI as my branch said it had to be taken out due to the value of the loan. I didn't even think they could cancel it if it was part of the loan agreement but apparently so.

 

I know if FOS find in my favour the PPI etc will be calculated and paid back towards my loan (which scarily now would pay off what is left of my loan!) and that is fine, but since cancelling the policy they have taken £120 out of my bank account over two months they shouldn't have. Money I can't afford them to just put towards my loan as money is tight and I budget for just about every penny.

 

Just not sure if they can do this or if I have a strong argument for getting the money back into my bank account instead.

 

Linz.

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Linz,

 

I believe you do have a good argument for having the money refunded to your bank account.

 

However this will likely be a bit of a drawn out process.

 

I suggest you put it in writing that you want the refund applied to your bank account and not the loan. They have up to 8 weeks to reply.

 

DJ

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Thanks DJ, just had the most infuriating call back from RBS customer service team after I challenged the credits to the loan.

 

They have said what they did was right and that actually, although my loan agreement clearly states £241 is for the loan and £60 for my PPI, actually that is just an estimate as the amount varies as the loan amount is reduced - so effectively at the start I was paying about £100 + for PPI alone and now it's only worth about £15 of my payments.

 

I am so confused? How can this be if my loan payment clearly set out how much was for the loan and how much was for PPI?

 

The advisor at the bank said these figures were an estimate, which I challenged. It is what I signed so how can it vary?

 

Apparently now, with PPI removed for the 11 months my loan has left my repayments will come down by a whole £9.

 

If they are now saying the figures quoted on the loan agreement are not fixed, do I then have grounds for challenging the whole validity of the loan? I knew the amount you pay for the actual loan part does largely pay of the interest to start with, but how the PPI payments worked (or even PPi in general) was never explained to me.

 

Feel RBS are just taking me for a ride with their calculations. They even refused to give me a final response until I came out with the threat of going to a lawyer. So angry with them!

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Linz,

 

Although frustrating, RBS are correct in what they are saying. As with loans, they charge more at the beginning of the loan, claiming that the risk is higher. Then as time progresses, more of your monthly repayments will be going towards paying off the original loan/ppi amount.

 

But look on the bright side, that means your claim for refund of PPI is going to be worth even more than you originally thought.

 

If you send me the details, monthly repayment amount, interest rate charged, date of first repayment and number of repayments I will do some calculations for you and work out how much you should be claiming.

 

DJ

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