RBS Loanguard on overdraught

[wheresmyppi]

Sent my complaint last week asking for a refund on this.

 

OD ran from late 2004 until early 2010 with an average of £5k debt over that time. All paid off now. Once it was paid of and account closed. We received a letter a few weeks later telling us the loanguard had also been cancelled which we never knew we had.

 

I have asked for all premiums paid, interest charged at the OD rate on the premiums paid, any fees incurred as a result of the payments taking us over our authorised limit plus the statutory 8% per year.

 

Will they now say we should have known? This is quite a large ammount they may try to wriggle out of.

[ims21]

Cross the bridges as you come to them.

 

Wait and see what they say first.

 

ims

[wheresmyppi]

Thanks ims, I know I shouldn't but I am quite enjoying this reclaiming lark.

[wheresmyppi]

Still wating for a SAR response but...

 

Received a letter from RBS this morning explaining that the complaint has been upheld and they had made me what at first glance seems a decent offer.

 

It includes the refund of premiums, compound interest on premiums paid at overdraught interest rate and the 8% required.

 

They have not offered any refund of the charges for going over my OD limit as a result of the premiums and interest added due to the missold PPI, should they? I understand the refund should put you back to a position of not having had the PPI so the charges should also be taken into account when calculating the refund.

 

Also, what about financial problems caused by the PPI and interest? Such as Direct Debits not being paid because the OD PPI and interest taken wrongly meant insufficient funds in the account to cover them.

 

If the charges are a vaild refund request, how would I calculate the ammount when the SAR arrives? I have just done a quick spreadsheet from a £35 charge from 2004, added OD interest rate of 18.75% then added 8% to that figure, carried this over to 2005 and added OD interest and 8%, is this correct?

[ims21]

Hi

 

Good news about the PPI refund.

 

On the charges front you would have to show that they were incurred 100% as a direct result of the ppi and that had the ppi not been taken that thos charges would not have come about. That would involve quite a bot of work when you get your SAR back.

 

In addition, even if you could show that to be the case, it is highly unlikely that the bank would refund them without a fight and you would probably have to sue.

 

fos might look at it but as we know, fos is a long process.

 

Any charges reclaim would be separate from the ppi so if the offer they have made is correct you could accept it an then commence work on the charges if you feel it is worth it

 

Bear in mind that you have received 8% compensation on the PPI

 

ims

[wheresmyppi]

Thanks for the reply.

 

If I can prove, and I think I can once the SAR arrives, if I sue them what would be the chance of success?

 

I take your point about the 8% but if I incurrred a £35 charge in 2004 then I have been paying for this at the OD rate since it was applied to the account. If PPI had not been applied I would not have had this charge, so do I calculate the 8% onto this or just the OD interest rate?

 

If I reply to them stating that I feel that there are charges that have been incurred as a direct result of PPI being applied to the OD and ask for a one off payment. In return I would take no further action, would the bank consider this?

[ims21]

Thanks for the reply.

 

If I can prove, and I think I can once the SAR arrives, if I sue them what would be the chance of success?

 

It will depend on how well you can put your case together with the appropriate proof. Going to court is a lottery and there will be a lot of work involved.

I take your point about the 8% but if I incurrred a £35 charge in 2004 then I have been paying for this at the OD rate since it was applied to the account. If PPI had not been applied I would not have had this charge, so do I calculate the 8% onto this or just the OD interest rate?

 

Two options, one is to simply claim the O/D rate. Alternatively you could claim a higher rate of interest in restitution...see No.4 in my signature. Restitution could be argued in court if you decide to go that route

If I reply to them stating that I feel that there are charges that have been incurred as a direct result of PPI being applied to the OD and ask for a one off payment. In return I would take no further action, would the bank consider this?

 

They might

 

ims

[wheresmyppi]

IMS, as ever thankyou.

 

I will put a letter together this afternoon and let you know how I get on.

[wheresmyppi]

I sent the letter to the RBS a few weeks ago and have had the reply of charges are not PPI and they have forwarded my complaint to the relevant department, I can't help thinking it is a polite brush off.

 

Before sending the letter I called the FOS who advised me that if the charges were a direct result of wrongly applied PPI then they should be in the same complaint, I never advised this in my letter to the RBS.

 

If I can prove the charges were as a direct result of mis sold PPI, and I can from the SAR, what would be the best response to this? The refund is almost a 5 figure sum, including interest at the OD rate plus the 8% required. My argument would be that I would never have been this ammount over the OD limit (less the 8%) so as far as I am concerned, all charges since PPI was applied should be refunded, is that a valid argument?

 

In my understanding a PPI refund should take you back to a state of not having had it but without the charges refund I will not be.

[ims21]

Hi

 

Yes you are right...evrything should be put back to a state it would have been in had the PPI not been applied in the first place.

 

In the fos case studies on their website, you will find awards where the bank has been told to refund charges that have been incurred this way.

 

If the bank don't play ball you either put this to fos to deal with or you sue in court but remember, as a claimant you would have prove mis-selling in court

 

ims

[wheresmyppi]

IMS,

 

I don't think proving a mis-sell would be a problem, the PPI was applied to the OD without even asking us if we wanted or needed it. I have looked through the FOS case studies and can find no mention of refunded charges, do you have the link please? I might call the RBS and use that as a polite nudge.

 

I wonder if now it has gone off to the charges people at the bank they wll realise that the fees should be refunded? The synical part of me thinks they are trying to get me to give up and accept what on face value appears to be quite a lot of money.

 

The refund does appear to be the correct ammount and I would accept it if it were not for the fees but if I were to accept it, does that full and final prevent me going after the charges on a seperate claim?

 

If I do take it to the FOS, could they withdraw the offer and then we start all of this again? I really would prefer to keep this between me and RBS and reach a fair conclusion but I think there is my problem, I can be as fair as I can but will the RBS?

[ims21]

Hang on...I'll see what I can find

 

BRB

[wheresmyppi]

Just found this...

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?283400-Claiming-back-bank-charges-%96-The-PPI-approach

[ims21]

Hi

 

Here's a case that mentions refund of PPI premiums and any interest and charges as a result of the PPI

 

http://www.financial-ombudsman.org.uk/publications/technical_notes/omb-decision-D.pdf

 

ims

[ims21]

Hi

 

It is generally accepted the PPI claims and charges reclaims are two distinct areas and that banks don't cave in as easily on charges as they do for PPI.

 

It might be worth a call to fos to establish whether banking the cheque in this case would mean that fos wouldn't take on the charges element of this.

 

In a court action I think you could show that the two are distinct and that although the bank have accepted your claim for the PPI they have refused your claim on the charges side and that is what you are now going after.

 

ims

[wheresmyppi]

So, I take it that PPI on a OD works in a similar way to PPI on credit cards, you have a balance outstanding and the PPI is applied as a percentage of the balance. In which case the FOS guidline below cover this.

 

The reconstruction of the credit-card account, to work out what the current balance would have been (where the account remains open) – or what the closing balance would have been (where the account has been cleared or closed) – if the consumer had made the same monthly payments but without PPI. This should be calculated by deducting the PPI premiums and the interest and charges that resulted from those premiums (including those arising because the ongoing monthly balance on the credit-card account was higher than it would have been, if the consumer had made the same payments to an account without PPI).

 

If that is the case, are the RBS PPI dept playing me for a fool who will just go away, surely they should know the FOS guidelines?

 

Tomorrows calls, first to the FOS to let them know how the RBS are dealing with this and to ask about charges on a seperate claim if I accept this offer. Then to the RBS PPI team to remind them of the FOS guidelines and the possibility of a payment for distress and inconvenience – for example, where the financial business rejected a complaint that it knew (or should have known) that the ombudsman service would uphold, followed up with a letter stating the same. Then to find out who at the bank is now dealing with the charges part of the claim and to remind them of the same guielines as I have the PPI dept.

 

IMS, thanks again, you are a big help.

[ims21]

Hi

 

In my opinion it is very similar. The balance fluctuates depending on the monthly spend and the amount repaid and PPI cover is applied a you suggest. The major difference is that there is no credit agreement as such on an overdraft.

 

The underlying principle of fos redress is to out the claimant back in the position they were in had the PPI not been applied and (in some cases only) to give an award for distress etc caused.

 

It would not be unusual for a bank to try and fob people off as I am sure you know. They have no interest in their customers whatsoever and of course cannot be trusted one iota.

 

As far as calculations are concerned, the reconstruction of an account can be done by a claimant although it can be a tedious task and you would need all of the statements to be able to do it.

 

ims

[wheresmyppi]

In the case of PPI refunds, does the fact that there is no Credit agreement on OD's have any bearing on it?

[ims21]

In the case of PPI refunds, does the fact that there is no Credit agreement on OD's have any bearing on it?

 

Nope...none at all.

 

Just another thing, have you ever asked them to put in writing to you the how, where and with whom you spoke to in order to authorise the PPI. Have they ever given you an explanation as to why it was applied?

 

ims

[wheresmyppi]

Never asked them that and had no explanation as to why it was applied, what would it achieve?

 

The OD was arranged on the phone to our adviser at the bank, it was a yes over the phone, put in place but as you said earlier no CA as it is an OD. Never asked if we wanted PPI, it was applied by the bank automatically. The first we knew of it was when we paid off the OD and received a letter saying the loanguard was now cancelled.

[ims21]

Never asked them that and had no explanation as to why it was applied, what would it achieve?

 

The OD was arranged on the phone to our adviser at the bank, it was a yes over the phone, put in place but as you said earlier no CA as it is an OD. Never asked if we wanted PPI, it was applied by the bank automatically. The first we knew of it was when we paid off the OD and received a letter saying the loanguard was now cancelled.

 

Morning

 

It was really just an "aside" question. Just to see what their answer is and how they justify putting it on there. It's not really important to your claim.

 

 

ims

[wheresmyppi]

Called the FOS, if they refuse to consider the charges part of the PPI claim I can accept the PPI offer and persue the charges as a seperate claim which they would be happy to take on. I stopped short of registering the complaint as they advised to call the PPI dept at RBS and let them know i have had an informal chat with the FOS first to see if that gets a result.

 

No time at work today so the call will go into them tomorrow.

[wheresmyppi]

The RBS are really annoying me now.

 

Called the PPI dept who explained I need to speak to the charges dept and refuse to admit the charges are part of this PPI claim despite the FOS guidelines. The number they gave me only has a recorded message giving the rubbish about how the banks won the case about charges in 2007 then goes dead.

 

RBS, you have thousands of my money taken illegally and I want it back.

[wheresmyppi]

Letter ready to go. If I push this, is there a chance they could retract the offer and tell me to go to the FOS instead?

 

Does this sound pushy or over the top?

 

 

We feel we made a reasonable offer in our letter dated the xx February to bring this complaint to a swift and sensible conclusion. Please reconsider your position on this matter as we have been advised by the FOS that if you continue to refuse acknowledgement of the charges relating to PPI we can pursue the matter as a separate claim against yourselves.

Edited March 7, 2012 by wheresmyppi

[ims21]

Hi

 

By making you an offer they have effectively admitted mis-selling (although they might describe it as a gesture of goodwill) and fos have told you that you can go for the associated charges as well so if it were me I'd now contact them for the charges part and see what they say.

 

As fos said, if they don't play ball you can accept the PPI and then go for the charges as a separate issue.

 

ims