PPI Compound Interest Spreadsheet - Monthly Card payments

[ims21]

http://www.financial-ombudsman.org.uk/publications/technical_notes/ppi/redress.html#b

[nortie]

Hi ims21 and others

 

OK - so the two methods are different... but how come the FOS Compound Interest Spreadsheet exists if they (the FOS) are not going to award compound interest? Is this actually their spreadsheet (FosCISheet v101.xls)?

 

You see, I'm confused. You say damages in restitution can only be awarded by a court - I get that. But this spreadsheet is supposed to calculate compound interest on "the regulatory method". It doesn't ask about full account balance - it just asks for the rate of interest, charge made and calculated the number of months elapsed and does the compound interest calculation. Isn't that what I said earlier? No mention of running balances. It shows £38 in July 1999 at 17.66% APR as now owing £365.79.

 

So, do FOS use this, or not? And if so, I wonder why they are not using it on my account - because if they were, they wouldn't say that the CCC's offer of £0.00 tax on £38 from July 1999 is 'fair and reasonable".

 

It could be that the whole thing hasn't yet 'clicked' in my mind, but I cannot understand why the FOS thinks the CCC's offer of £10,080 is fair and reasonable. Under calculations using their own spreadsheet, I get the figure to £32,666 - so the CCC are a bit out.

 

Sorry if I keep banging on about the compound interest, but it's because I think it's the crux of the matter. The 8% simple when the account was in credit is actually a small amount in comparison.

 

Thank you for your help and patience.

 

Best wishes,

 

Neil

[ims21]

fos do award compound interest but it is calculated to compound monthly.

 

fosCIsheet is used where not all statements are available and will give a best estimate in the absence of all statements. You do still need to know what your ppi payments were.

 

fosRunning is used where all statements are available as it will reconstruct the account with revised balances and work out the 8% on any month where the account falls into credit.

 

To get to your £32,000, explain how you have entered data into which spreadsheet. If you have used fosCISheet, what date have you set the "claim to" date to?

[nortie]

To get to your £32,000, explain how you have entered data into which spreadsheet. If you have used fosCISheet, what date have you set the "claim to" date to?

 

I have created four spreadsheets.

 

No 1 covers the period for which neither the CCC or I have statements, BUT we both accept the card start date (October 1994) and we both accept that by July 1999, PPI premiums had reached £38.71 - the first "actual" figure we have. The CCC have conveniently disregarded this almost five years of PPI payments as 'missing'. I propose that we take the first known amount (£38.71 in July 1999) and divide it by the number of 'missing' months, i.e. October 1994 to June 1999 inclusive, i.e. 56 months.

 

£38.71 / 56 = 0.69p. So I then propose to start at 0.00 in month one, adding 0.69 every month for 56 months until we get to the actual figures kicking in. I can't think of a fairer way to estimate the 'missing' months - and I certainly don't think it's fair or reasonable to acknowledge their existence but to discount them totally because we don't have 'real' figures.

 

This spreadsheet attracts 17.66% interest (the contractual rate as informed by the CCC) up to today's date, because they haven't repaid it yet. BTW the account was only finally closed in Summer 2011, not 2008 as I said last night in dreamy stupor. My final balancing payment was made at the end of April 2011.

 

No. 2 covers the period of actual figures from July 1999 to the start of my debt management plan in September 2002. This also attracts the interest rate of 17.66% and is claimed to today's date, as it hasn't yet been paid.

 

No. 3 covers the time during my debt management plan when the CCC continued to charge PPI, apart from on a handful of months. I have applied an interest rate of 4% to this spreadsheet because I believe interest was being charged but at a reduced rate to reflect the DMP (!). This too is claimed to today's date.

 

And finally No. 4 covers the period after the DMP had finished, when the whole £12k original debt had been repaid but during which the CCC demanded a further £6450 in unpaid PPI and interest from during the DMP. I have associated an 8% interest rate for this, as the account would have been well into credit if the PPI had not been applied, and indeed those payments should never have been made in the first place.

 

Does this sound logical?

 

I then totalled the totals from each of the four spreadsheets, and get to then figure of £32666.

 

Hope this makes sense!

[ims21]

Ok

 

Three things spring to mind.

 

First, while your calculation of the missing period PPI seems logical, you may not get this awarded to you in the absence of evidence.

 

Second, if you are using a pure compound interest sheet which compounds daily then you should consider using the fosCIsheet which compounds monthly since that is the way the contractual interest is applied to the account and is the basis on which it would refunded.

 

Third, if you have your "claim to" date set to now then you need to change that to the date the PPI stopped being paid or, if it was charged to the account right up to the date of closure then the closure date.

[nortie]

First, while your calculation of the missing period PPI seems logical, you may not get this awarded to you in the absence of evidence.

 

I understand - but the evidence is clear - the card was opened on 17th October 1994 - fact - and by 26/7/1999 the PPI payments had reached £38.71 - fact. Both documented. The estimated amounts are best guess, but to dismiss them completely would be a gross miscarriage of justice in favour of MBNA (whose software error "lost" the data in the first place).

 

Second, if you are using a pure compound interest sheet which compounds daily then you should consider using the fosCIsheet which compounds monthly since that is the way the contractual interest is applied to the account and is the basis on which it would refunded.

 

These sheets are all using the FOSCI Sheet as supplied.

 

Third, if you have your "claim to" date set to now then you need to change that to the date the PPI stopped being paid or, if it was charged to the account right up to the date of closure then the closure date.

 

OK- will do this - but I would argue that until they repay the amount owed, the interest keeps clocking up. Just like it would if I owed them. A contract should be fair on two sides, not just one.

 

Thanks for your help on this.

 

To court then?

[ims21]

Well only you can decide whether you wish to accept a regulatory based award or challenge them in court.

 

Be aware of the implications of court action if you lose and I have mentioned these in a previous post.

[nortie]

I can certainly accept a regulatory based award if it involves compound interest. The CCC's current (apparently fair and reasonable) offer doesn't - and it's the FOS who say it's fair.

 

Will take turbo legal advice on whether to proceed. Probably worth giving up 25% on a 'no win, no fee' solicitor.

 

Thanks again.

 

Will let you know how I do.

[nortie]

Hi ims21

 

Just so I don't look a fool going back to FOS, can you confirm that the compound interest calculation spreadsheet, FosCISheet v101.xls, is from the FOS?

 

I want to ask them why they think the CCC's figures are fair when calculated using their own spreadsheet, they seem much smaller. Obviously I don't want to say this if the spreadsheet is not a genuine FOS one.

 

Cheers

[ims21]

No, none of the spreadsheets are from fos.

 

fos do not issue spreadsheets. They do not do calculations themselves.

 

They have been written based on fos guidelines of redress so that people can check the offers they are made.

[pink1808]

So guessing in my case its not just as simple as

 

£22 (ish) +1.313% + 8% x 76 months then?

[finbar44]

Has someone got a good spreadsheet please just found my ststements from 1993