Welcome Finance PPI and Mr Z ** SUCCESSFUL OUTCOME **

[steven4064]

Just when I thought my head around it! LOL

 

I 'll admit what you have said makes no sense to me. Let me read it a few times more and do some scribbling to see if I can get to grips with it.

 

I am trying to work out the compund interest that have charged on the balance to use for restitutionary damages. My understanding was it should look like this.

 

Month1: 100.00 x 1.62% + 100.00 = 101.62

Month2: 101.62 x 1.62% + 101.62 = 103.27 and so on for 72 months

12 months at 0%

Month85: (the balance at month 72) x .492% = whatever the total, and so on til present.

 

In my example the 100.00 is what I paid toward the mis-sold insurance. The resulting interest is what I am claiming on top of what I paid as restitution.

 

Have I got it all wrong? If so I am afraid I am really gonna need some help or time to figure this out. I've read your tutorial which I understood to be telling me to calculate as per above...I will re-read it.

 

Edit: Just to point out the restitution I would be claiming is the interest only not the prinicpal as well. So the 1.62 + 3.27 and so on, totalling all the interest as restitution. I'm not sure that was clear in the above formula.

 

If I have got this wrong, then so do alot of other people. I wonder if anyone can volunteer to take peoples payments made to date and work it out. There are so many spreadsheets, calculator links, and formulas bouncing about that I'm afraid the confusion behind it may cause problems for many...including myself.

 

I have a copy of dualcalc and thought I was using it correctly, not so sure now

OK, I misunderstood, I thought the £100 was the PPI loan amount - let's start again.

 

There are 3 periods where you paid respectively 16.2%APR (1.26%/month), 0% APR (0%/month) and 4.92% APR (0.34%/month) - lets call them periods 1,2 and 3.

 

Period 1. You had a loan of £x of which £y was PPI and you paid £z/month for 72 months. I think you can forget about the interest rate and just say that you paid £ z*y/x / month for the PPI. So create a spreadsheet, with each payment and its date on a row each (72 rows)

 

Period 2. You will have had a different repayment amount - call that £w. Then the amount you paid each month for PPI was £w*y/x. Add rows for each of these payments to the spreqdsheet with their dates.

 

Period 3. Again there will be a new repayment amaount - call that £v. The amount paid each momnth for PPI was £v*y/x. Add rows for each of these payments to the spreqdsheet with their dates.

 

Add up the payment column to see how much you acturally paid for PPI (this includes interest payements - you don't actually need the interest rate(s) to calculate this)

 

Choose a date for the claim. Add a new column to the spreadsheet and in each row calculate the number of days between the date of the payment and the claim date. Excel has a function that will do this.

 

Choose an annual rate of interest for restitution - call it r%. Calculate the daily rate d% = ((1+r/100)^(1/365) - 1)*100. Add a new column to the spreadsheet and in each row calculate the interest in restitution for that payment. Let p be the payment in a given row and n the number of days between the payment and the claim date. The interest in restitution is p*((1+d/100)^n - 1)

 

Add up the column to give the total interest in restitution.

 

I know it seems complicated but this will give the right answer for how much you actually paid for PPI including interest and it gets the restitution right too. You have to treat each payment seperately as the time over which interest is to be claimed is different for each one.

 

I hope this helps.

[MrZ]

I see your point and do understand your approach.

 

What I would say is that it is up to you. Certainly you have nothing to lose and if you start high you can always come down. But like all of these cases that go to court, you are the one handling your case and the calls are yours.

 

I think at least we have arrived at two possible scenarios, both of which are justifiable from different viewpoints.

 

I have to say that you do argue your points well and have a logical approach. On that basis I'd say go for it and see what transpires.

 

ims

 

Well if I have convinced you, maybe I will be able to convince a judge too! I do feel confident in my position and how I am arriving at my figures. I suppose Welccome will have to disclose alot of internal accounting practices if they really wish to dispute my figures. I would definitely "welcome" that, if not for my benefit, then for the benefit of all the others in a similar position to myself.

 

So assuming no one else can tear my method to shreds, I am gonna go with it. Now I need to finish up my POC. My objective is to get my claim off to the court first of next week or soon after.

 

No more drinks for me, trying to keep my eyes open.

[MrZ]

OK, I misunderstood, I thought the £100 was the PPI loan amount - let's start again.

 

There are 3 periods where you paid respectively 16.2%APR (1.26%/month), 0% APR (0%/month) and 4.92% APR (0.34%/month) - lets call them periods 1,2 and 3.

 

Period 1. You had a loan of £x of which £y was PPI and you paid £z/month for 72 months. I think you can forget about the interest rate and just say that you paid £ z*y/x / month for the PPI. So create a spreadsheet, with each payment and its date on a row each (72 rows)

 

Period 2. You will have had a different repayment amount - call that £w. Then the amount you paid each month for PPI was £w*y/x. Add rows for each of these payments to the spreqdsheet with their dates.

 

Period 3. Again there will be a new repayment amaount - call that £v. The amount paid each momnth for PPI was £v*y/x. Add rows for each of these payments to the spreqdsheet with their dates.

 

Add up the payment column to see how much you acturally paid for PPI (this includes interest payements - you don't actually need the interest rate(s) to calculate this)

 

Choose a date for the claim. Add a new column to the spreadsheet and in each row calculate the number of days between the date of the payment and the claim date. Excel has a function that will do this.

 

Choose an annual rate of interest for restitution - call it r%. Calculate the daily rate d% = ((1+r/100)^(1/365) - 1)*100. Add a new column to the spreadsheet and in each row calculate the interest in restitution for that payment. Let p be the payment in a given row and n the number of days between the payment and the claim date. The interest in restitution is p*((1+d/100)^n - 1)

 

Add up the column to give the total interest in restitution.

 

I know it seems complicated but this will give the right answer for how much you actually paid for PPI including interest and it gets the restitution right too. You have to treat each payment seperately as the time over which interest is to be claimed is different for each one.

 

I hope this helps.

 

Steven this is EXTREMELY helpful. I dont know if you have been following the discussion from post 190ish onward. But I will defintely follow the above guidance and see what I come up with. I will be very anxious to see how far off it is compared to what I have already done.

 

Update to follow.

 

Thank you very much for taking the time to break this down. I'm sure it will be of use to others apart from myself.

[MrZ]

Steven,

 

Just a quick question. You are referencing the 16.20 as APR and a monthly of 1.26%

 

the APR on my agreement is (incorrectly) stated at 19.98%. The monhtly rate shows 1.350% which in turn gives an AIR of 16.20%. Using that AIR I get an APR of 17.5%

 

Should I not be using the 1.350% monthly rate as stated on the agreement and apparently used as its also shown on the statement as 16.20% (1.350*12)?

 

Using dualcalc seems to confirm that 20103.82 @298.07 over 180 months gives the 1.35% monthly, 16.20% AIR and 17.5% APR.

 

Lastly for an annual rate of 4.92% I get a monthly rate of 0.41%. Can you double check and confirm or clarify this conversion?

Edited May 11, 2011 by MrZ

[MrZ]

Choose an annual rate of interest for restitution - call it r%. Calculate the daily rate d% = ((1+r/100)^(1/365) - 1)*100. Add a new column to the spreadsheet and in each row calculate the interest in restitution for that payment. Let p be the payment in a given row and n the number of days between the payment and the claim date. The interest in restitution is p*((1+d/100)^n - 1)

 

All is ok and the figures so far match within 2-3 pennies from what I have calculated except this part p*((1+d/100)^n - 1

 

Excel doesnt like this in my speadsheet p is a cell number containing the payment. d is a cell containing the daily rate and n is a cell containing the datedif/number of days.

 

Here is my forumla =B2*((1+D2/100)^D2-1)

 

I am double/triple checking for data entry errors

 

EDIT: Okay, your forumla is fine, in my example above I was referencing the wrong cell.

 

Now I do have another question. Using your formulas as opposed to what I was using before I get slightly different results.

 

Your formula: d% = ((1+r/100)^(1/365) - 1)*100 using the rate of 16.20 gives .04435

My formula: d% = ((1+r)^(1/365)-1) using the rate of 16.20 gives .04114

 

Your formula is: p*((1+d/100)^n-1) using a payment of 48.03 and 2657 days gives 48.60

I was using: p*(1+d)^n-p using a payment of 48.03 and 2657 days gives 95.23

 

The formula I was using is from the advanced spreadsheet in the library. Which is correct? I am inclined to think your formula is correct and perhaps I was using a spreadsheet designed for something completely different.

 

EDIT 2:

 

Okay I am really sorry. Please ignore my edit above. Its late and fatigue is a b****. I have seen the error of my ways. Too many numbers too many forumlas too late at night.

 

The good news is, I was right all along. Having now properly applied your formulas I am happy to say that the calculations between your method and my method are only out by a few pennies.

 

When I have had some sleep I will go back over my figures and tidy them up. The spreadsheet samples I posted earlier in this thread achieve the same as your formula. This confirms I am in fact doing this correctly. WOOHOO! if it werent so late I would do a dance.

 

Sorry for the confusion, and thanks again for your help. I DO have my head round it after all

 

I will post the exact figures using your formula and compare them to mine in the morning for all those who are interested.

 

 

Oh I almost forgot...the formula for determing the daily rate is still different though. In the overall calculation it makes a difference of £8 on a single payment. I will post a better example in the morning when I am more coherent.

Edited May 12, 2011 by MrZ

[steven4064]

Steven,

 

Just a quick question. You are referencing the 16.20 as APR and a monthly of 1.26%

 

the APR on my agreement is (incorrectly) stated at 19.98%. The monhtly rate shows 1.350% which in turn gives an AIR of 16.20%. Using that AIR I get an APR of 17.5%

 

Should I not be using the 1.350% monthly rate as stated on the agreement and apparently used as its also shown on the statement as 16.20% (1.350*12)?

 

Using dualcalc seems to confirm that 20103.82 @298.07 over 180 months gives the 1.35% monthly, 16.20% AIR and 17.5% APR.

 

Lastly for an annual rate of 4.92% I get a monthly rate of 0.41%. Can you double check and confirm or clarify this conversion?

Use the monthly rate they give - that is the correct number, everything else is derived from it.

 

If 4.92% is an AIR, then the monthly rate is indeed 0.41%. If it is an APR, then the monthly rate is 0.335%

[MrZ]

Use the monthly rate they give - that is the correct number, everything else is derived from it.

 

If 4.92% is an AIR, then the monthly rate is indeed 0.41%. If it is an APR, then the monthly rate is 0.335%

 

Thanks Steven,

 

I think I am nearly there. Using your formula of £ z*y/x / month for the PPI, puts me within 3 pence (rounding up or down) of what I had using the percentage. They are essentially the same thing, just a different forumla to work out and apply the percentage. So that part is all good.

 

This part however has me still a little confused.

 

Your formula: d% = ((1+r/100)^(1/365) - 1)*100 using the rate of 16.20 gives .04435

My formula: d% = ((1+r)^(1/365)-1) using the rate of 16.20 gives .04114

 

When applying your forumla over a period of multiple payments I get a total interest amount of 1500.73.

When using the second formula over the same payments and dates I get an interest total of 1328.17, a difference of 172.56.

 

I am more inclined to use your formula as it is to my benefit.

 

In order to get close to the daily rate your formula yields, I have to use the APR of 17.45% (derived from the compounding effect of the stated monthly rate of 1.350)

 

Can you kindly have a look at those two formulas and point out the difference?

 

EDIT: It appears as though your formula is accounting for the compounding effect. But I am not quite sure where thats happening. I think its when you divide the rate by 100 and then multiply power 365, but I am not entirely sure. I am sure your formula is the correct one but I just want to be absolutely clear as to why.

 

In summary your formula is compunding the monthly effective rate, where as mine requires the annual compounded rate before determining the appropriate daily rate? Am I on the right track?

Edited May 12, 2011 by MrZ
Spellcheck

[steven4064]

If youput 16.2 in my formula and 0.162 in yours you shouls get exactly the same. You can't use a percentage as such - that is why mine dives by 100 to give the percentage as a decimal. Anyway, I know that mine is correct if you put in the actual APR. If you are using an AIR then the formula is much simpler - it is just AIR/365

[MrZ]

If youput 16.2 in my formula and 0.162 in yours you shouls get exactly the same. You can't use a percentage as such - that is why mine dives by 100 to give the percentage as a decimal. Anyway, I know that mine is correct if you put in the actual APR. If you are using an AIR then the formula is much simpler - it is just AIR/365

 

Ok. I see what you are saying. But just to confirm, my monthly rate is 1.350 which gives an AIR of 16.20 and an APR of 17.45.

 

You are saying to use your formula I should input the APR of 17.5 and not the AIR of 16.2? This is the final question regarding the interest then its jobe done.

 

Using the APR of 17.5 the daily rate converts to .04790

Using the AIR of 16.2 the daily rate converts to .04435

 

The difference will be around 150.00 or so over the term.

[steven4064]

If you actually have a monthly rate you should use that - as I said, everything else is derived from it anyway. So the daily rate is the monthly rate *12/365 so d = 0.044% and the compound interst on a particular charge is therefore p*(1.00044)^n - p, where p is the charge and n is the number of days between the date of the charge and the date of the claim.

[MrZ]

If you actually have a monthly rate you should use that - as I said, everything else is derived from it anyway. So the daily rate is the monthly rate *12/365 so d = 0.044% and the compound interst on a particular charge is therefore p*(1.00044)^n - p, where p is the charge and n is the number of days between the date of the charge and the date of the claim.

 

Thanks again thats 100% clear to me now. FINALLY!

 

Sorry for being a bit thick, but now I know that I know and I am sure that I am sure

[citizenB]

[MrZ]

 

I know right? I did a two step myself!

 

I would like to say thanks to ims and steven for their help in regard to the calculations. As it turns out, I was calculating the amount of PPI properly, and there were some discretions in calculating the compound interest to use for restitutionary damages.

 

After all of the back and forth I now have a firm grasp of the finer details and how and why the claculations are to be made. If nothing else this will prepare me in the event I am questioned by either Welcome or the court during the process of my claim.

 

So once again, many thanks to you guys...and also citizenb for his SOS's

Edited May 12, 2011 by MrZ

[steven4064]

her SOS's

[MrZ]

her SOS's

Doh!

I am so sorry ms. citizen, I didnt know.

[ims21]

Just got in from work

 

What a thread.....glad it got there in the end....congrats MrZ

 

Best of luck with the claim

 

ims

[MrZ]

Okay guys and gals

 

I have my court bundle just about ready to send to the court. There is one area where I still need help. I asked before and ims addressed it briefly, but I am still not clear on this.

 

I have my base claim which is only the amount of money I have paid toward the premiums which include interest. What I need help with is putting the various paragraphs in the POC to ask for the restitution and damages. I intend to rely on Sempra v Inland for this.

 

Now for the damages I wish to ask for the compounded interest at the rate of lending in my case the 16.20%. However should the court not see fit to award this, I dont want to do myself out of the s69 interest as well.

 

So what I need some guidance with is how to separate and word/state each of the three elements so that its not an "all or nothing" type of claim.

 

Can anyone make some suggesstions on the wording and format in this regard?

 

Thanks!

 

P.S. I have also sent them a prelim letter for the MIF charges and interest as well as the unfair charges and interest (this was done earlier this week. I realise that if I submit them all together, then the amount falls above the allowed 5k for small claims. However I dont have tons of money for court fees and the one and only lady who deals with remission in my court is a bit stroppy and difficult. I suspect she has a strong desire to find any reason to decline my application for remission. I am kind of counting on Welcome not wanting it to go into court, so settling, and thereby saving me the risk of the costs. That aside I dont want to jeopardise my claim for PPI for which I have written admission of mis sale, which on the face of it would seem to be a sure thing as far as winning in court. Advice on this invited as well.

Edited May 12, 2011 by MrZ
Spellcheck

[MrZ]

Just got in from work

 

What a thread.....glad it got there in the end....congrats MrZ

 

Best of luck with the claim

 

ims

 

Thanks ims,

 

I am to blame for burning the wick at both ends, its just that 2 am is my quiet time in the house and when I can take time to do what needs to be done. Its not good for my maths skills though. But yeah I got there in the end, and I got assurance that my approach wasnt as flawed as I was beginning to think.

[MrZ]

Oh yes, I forgot to mention in post 217. I sent a Part 31 request for the underwriting sheets surrounding the MIF and possible hidden commissions.

[steven4064]

You can't claim both interest in restitution and s69. You could put something like

 

"The claimant claims compound interest at the rate of 16.2% per annum totalling £x as in Schedule 1 attached in restitution on the basis of Sempra v Inland Revenue. If the court is not minded to award compound interest, the claimant claims interest at 8% per annum puruant to s69 of the CountyCourts Act 1980 in the sum of £y plus £z per day from the date of claim to the date of settlement."

 

However, I chose not to do that in my Goldfish claim (where I got compound interest on the basis of Sempra) because I didn't believe it would ever get to court and I didn't want to give GF the alternative. But that's just me.

[MrZ]

You can't claim both interest in restitution and s69. You could put something like

 

"The claimant claims compound interest at the rate of 16.2% per annum totalling £x as in Schedule 1 attached in restitution on the basis of Sempra v Inland Revenue. If the court is not minded to award compound interest, the claimant claims interest at 8% per annum puruant to s69 of the CountyCourts Act 1980 in the sum of £y plus £z per day from the date of claim to the date of settlement."

 

However, I chose not to do that in my Goldfish claim (where I got compound interest on the basis of Sempra) because I didn't believe it would ever get to court and I didn't want to give GF the alternative. But that's just me.

 

The example you give is very good. And you have given me some food for thought. I will spend the weekend going over it in my mind before I make a final decision. I certainly would like them to settle out of court, but am prepared to go all the way.

 

Would you lean toward keeping the claim limited to the admitted mis sale of the insurance, or do you think I should go for the whole lot in one fell swoop? Or would you rather not comment?

 

I am interested in objective opinions as it helps me consider things I may not have considered.

[MrZ]

Does anyone know if Welcome were regulated by the FSMA 2000 in 2003?

[steven4064]

Must have been, surely

[MrZ]

I would have thought so but havent a clue how to verify this.

 

Another question I am claiming unfair relationship as part of the claim. Would it be unreasonable to ask the court to use s 140(1)(b) to remove any remaining interest charged on the loan and pay the remaining balance at x.xx per month for x number of months?

 

It might be tricky to work out exactly how much interest that is and how much would be left to be paid though. Presumably I could total up the capitalisations, deduct the amount paid to date and see whats owing on the basis of an schedule of payments calculated on the amount of the loan had the insurance not been added.

 

In other words remove the insurance, generate a new payment schedule, then apply the money I have already paid, remove the interest from the current date onward and only pay the principal. Hope that makes sense.

 

EDIT: The reason I ask the above iis because I am not trying to walk away from the debt. I was advanced 15k, I paid over 16k back. But under the existing terms I will never pay of the loan as I cant afford the current monthly payment at the current rate of interest. It was based on 2 incomes, there is only one income now. I would like to be on more equal footing if I am to pay back the loan. This also assume I would only be dealing with the PPI in this claim and not the charges and interest and the MIF and interest.

Edited May 12, 2011 by MrZ

[MrZ]

Does anyone know if Welcome were regulated by the FSMA 2000 in 2003?

Answering my own question. Yes they were/are

 

http://www.fsa.gov.uk/pubs/other/financial_services.pdf

Edited May 12, 2011 by MrZ