First Plus PPI and Interest Help....please

[jimhammie]

FirstPlus PPI and Interest Help....please....

 

Hi guys..looking for a wee bit of advice.

In June of 2002 myself and my wife took out a First Plus loan to consolidate our debt. The loan value was £25,000 and £6122.50 was added for PPI giving a total loan of £31122.50. We, in common with many others on the forum feel we were mis-sold this PPI as we had no idea at the time of the implications and obviously subsequent hardship that this has caused us. Now 9 years in,based on current monthly payments we still have approx £30,000 to pay until the loan reaches its 15 year term....Similar to others we were in a pretty desperate place at the time and this was probably the only option that was available to us. I cannot remember being told of any of the potential downsides to this loan agreement, as far as I can re-call it was all positive ( maybe thats what I wanted to hear as we were desperate), but I do remember the PPI being very positively pushed, with the reimbursement of our fees paid being a big selling point.

That said, we did get a cheque for £5927.88 back in 2007 (strange figure now I look at it when we were charged £6122.50) which was all good at the time, but it still never dawned on us that we would still be paying interest on this initial charge, or even in fact that we would be paying interest on the £6122 from the beginning.

My question is, can I claim for anything regards this ? It was certainly never pointed out to us that this would be the case, all through the loan arrangement it was £25000 was the figure that kept being talked about, and in our own heads it was £25,000 that we were borrowing.

 

Can I do anything to claim back the interest paid on this to date and/or have the loan figure adjusted to remove this £6122 from the calculations in the future ?

 

If I can, it would be much appreciated if someone can point me in the right direction....

 

many thanks

[dx100uk]

yes ofcourse you can

 

just start a new claim as if you had never gotten a refund

 

then just deduct what they have refunded from your new claim total..

 

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

 

dx

[jimhammie]

Thanks dx...I've just read the link you gave me....certainly seems its worth a shot.

 

Looking at it, I don't really fall into any of the specific categories quoted but the closest would be under "what’s the position on the refund of premiums, where the loan is paid off early (or re-arranged)?"

 

I've no problem with searching the forums to find the answers, but if you can, or anyone else let me know the steps I should now follow it made make it a bit easier to start off.

 

Do I first write to First plus or the FOS ? I think it should be Firstplus from what I've read, and give them eight weeks to respond. Is that correct ?

Either way, should I send a detailed breakdown of what the amount is I am claiming back. If that's the case, maths not being my strong point a help with that would be massively appreciated.

 

I'm off to search the forum now and see if I can find the info.

 

Thanks again..

[ims21]

Hi

 

Download a consumer questionnaire from the fos website and complete it.

 

Prepare a schedule of claim.

 

I've attached a spreadsheet you can use to help with this. Just enter each ppi payment you made and it will work out the 8% interest for you. You enter these payments in the list section underneath the coloured bits. You only enter list data in columns A, B and C. Then just change your personal information in the blue section. You will need to make adjuistments for the final payment you made on the loan when you settled it less any rebate you got at that time.

 

If you need help with this part just shout and I can give you a hand.

 

Send a preliminary reclaim letter to your lender setting out the reasons for the mis-sale and enclose a copy of the spreadsheet and the consumer questionnaire.

 

Regards

 

ims

 

StatIntSheet.xls

[jimhammie]

Thanks ims...i found that spreadsheet earlier, the one you helped "Eggie" with.

 

For my case, on my loan agreement I do not have a breakdown of how much of my monthly payment was for repayment to the loan and how much was for payment protection. Do you know how I can work this out ? The only figures quoted are,

Amount of Advance £25000

Optional PP premium £6122.50

Total Loan £31122.50

Monthly Interest rate 1.019%

Estimated Number of monthly payments 180

Monthly payment £378.10

 

looking back at it now it doesn't even have the APR on it, they used the monthly rate to make it look a lot smaller interest rate than it actually was !!

 

I am still currently paying back the loan, so what I put on the spreadsheet is ? :

 

Monthly payment for PPI once I find this out, up untill the 5 years had passed when they rebated the £5927

It would then be the statutory interest that I claim back ? As the interest rate was increased by them over the course of the five years and since, I take it I can't just simply take the £6122 and divide it by 60 to get the monthly payment for PPI.

 

Also, at this stage do I ask for the £6122 to be taken off the loan amount and the loan re-calculated ?

 

Sorry for the many questions, but it seems the more I look into it and the more I read the forums it just throws up more questions...

 

Thanks

[ims21]

Hi

 

Just looking at some figs for you....back shortly

 

ims

[dx100uk]

i would guess this:

 

6122.50 is 19.7% of the total loan

 

so 19.7% of £378.10=£74.38.

 

so you use the spready and enter this for each month you paid

 

then take the refund off the total

 

as long as £378.10 has remained your PCM

 

dx

[jimhammie]

Just edited my original response...it made sense to me until I thought about it.

 

If my monthly payment for PPI is approx 74.38, then would it make sense to assume that the total paid to them would be 60 x 74.38 ?

 

If thats the case then it doesn't add up to the 6122 that they charged, nor to the 5927 that they refunded.

 

I'm now confused again...sorry guys

Edited August 23, 2011 by jimhammie

[ims21]

Doh

 

That dx guy got in while I was away and yes he's right with the figs. We'll have him writing complex spreadsheets next!

 

jimhammie....dont forget the £74.38 includes the interest they were charging you on the loan that's why you're having trouble reconciling.

 

Just as an aside, the monthly rate of 1.019 equates to an APR of 12.9%

 

Regards

 

 

ims

[jimhammie]

I think its me that should saying Doh !! Sorry again guys , I'm still struggling....

 

I don't understand how the total of my monthly payments for PPI (60 x £74.38 =£4462) would be less than the £6122 that they charged me, or even more puzzling why they would pay me £5927 back.

 

Sorry if I'm givin you guys a headache !!

 

I'll sleep on it and see if I can get the penny to drop...back tomorrow.

 

Cheers Jim

[dx100uk]

??

 

because you haven't actually physically paid all the ppi yet.

 

as for the £5927 - i'd have a guess they've added the statutory 8% to each PPI PCM you HAVE made, like they should in line with FOS guideline?

 

and i'd watchout ims, once i've got the BnB up and runnign next year, i just might have too much time on my hands

and start getting back into doing serious stuff that i long to do aGAIN, but dont have the time to presently - oh a man and his early retirement dreams.

 

dx

[ims21]

Hi Jim

 

As dx suggests, their £5,927 may not be just a simple figure because we don't know what "pro rata" scheme they use for calculating rebates or whether they have given you some interest. Not that it matters because the way you calculate your claim will automatically give you the net figure that should be due back to you.

 

One of the points that crops up regularly is the fact that most single premium ppi policies attached to a loan account offer cover for a period of five years. People believe (mistakenly) that they stop paying for it at that point. This isn't the case.

 

Basically, a single premum is paid out right at the start of the loan. The bank loan you the money to cover that payment and add it onto your loan account at the outset and you pay for it over the lifetime of the loan. In your case, you would be paying for this ppi premium by way of 180 instalments. AND of course the bank charge you interest on the loan they have given you to pay that ppi premium.

 

So if you are 9 years into your 15 year loan, you have paid 9 years worth of repayments on that ppi loan.

 

Having established that 19.7% of each of your monthly payments goes to the ppi part of the loan, in the spreadsheet you need to enter 9 years worth of ppi repayments. This will then give you the figures for the ppi you have actually paid (including the bank's interest) and the sheet will also show the 8% stat int on those payments.

 

You then simply deduct whatever amount you have been rebated already and it doesn't matter whether they have added 8% to it or not because by simply taking one figure from another you arrive at the net amount you should be receiving back. As dx says, they may have added some interest but if they have done so then that will still be accounted for correctly when you deduct one figurefrom the other as I have described.

 

The only time you would have paid the total premium of £6,122 is when you reach the end of the loan term.

 

dx...when you get the BnB up, me and Mrs ims will have to come visit and help support your new venture.

 

Regards

 

ims

[jimhammie]

Thanks again guys...the pennys dropped now. I'll get onto the spreadsheet tonight and see what figure I come up with.

 

Cheers

Jim