MBNA PPI - partial payout.....

[ims21]

By all means post it up minus anything that could identify you of course

[AB1979]

OK......I've left out some identifying information as well.

 

I am writing in relation to your payment protection insurance (PPI) complaint against MBNA Limited (MBNA). I have attempted to contact you today by telephone but unfortunately was unable to reach you. The purpose of my email is to explain what you can expect from me and our service.

 

My understanding is that this complaint is about the way MBNA has calculated its offer in relation to your payment protection insurance (PPI) complaint. In particular, I understand that you are unhappy because MBNA has offered to refund you the PPI payments you made for one year of the policy, when you were in full time education, instead of refunding all of the PPI premiums paid during the life of the policy. I also understand from your email dated 7 January 2014 that the outstanding debt has been sold to a third party and that you would like to know how this could affect any refund that may be due. This is something I will consider when completing my investigation. Please tell me if I have missed something or if you have anything to add at this point.

 

To help me investigate this complaint, I would be grateful if you could provide me with the following information:

 

MBNA has advised that the PPI policy was sold on 22 February 2006. Please can you confirm your employment status during the life of the PPI policy. I would be grateful if you could provide start and end dates where possible and highlight any periods where you were either in full time education or unemployed.

 

Please provide me with this information at your earliest convenience and ideally by 19 February 2014. Should you have any questions regarding my request, or feel you need more time to respond - please do not hesitate to contact me.

My role as an adjudicator is to give an independent opinion on this complaint. This means I will talk to you and MBNA, weigh up the facts of what has happened, and then suggest a fair way to resolve the situation.

 

In most cases, we find a solution at this stage. This might be agreeing how the business should put things right – or sometimes that the business has already acted in a reasonable way. But if either you or MBNA disagree with what I say, we can review the complaint and tell you our final decision. There is more about how we work on our website at http://www.financial-ombudsman.org.uk/faq.

 

I appreciate that you have been waiting for some time for this matter to be looked into. I would like to keep you updated with my progress every 28 days to let you know the steps I have taken and to answer any questions you might have. If you would like me to update you more frequently – please let me know.

 

please note the bolded section as well

[AB1979]

I accidentally deleted this bit as well:

 

Please provide me with this information at your earliest convenience and ideally by 19 February 2014. Should you have any questions regarding my request, or feel you need more time to respond - please do not hesitate to contact me.

[AB1979]

Sorry to prematurely bump my own thread, but I would like some feedback on this letter I'm intending to write. Is this OK?

 

*******************************************************************************************************

 

Dear XXXX,

 

Thank you for your email dated XXXXXXXX regarding my outstanding PPI complaint against MBNA Limited.

 

In relation to the question you asked me, I give you the following:

 

At the time of the application for the credit card I was in employment working 4 days a week (30 hours a week). It should be noted that prior to my application I had been accepted to study full-time at university, to begin in September of XXXX. As a result I would be leaving employment in the Summer of XXXX.

 

I attended University from September XXXX until December XXXX, where I had to withdraw for financial reasons.

For the rest of the life of the PPI policy I was living off savings via an inheritance, and subsequently was either unemployed or working in a part-time or voluntary capacity (i.e. unpaid), apart for a period covering May and June XXXX, where I was in temporary full-time employment.

 

Regarding correspondence between ourselves; I no longer have a mobile phone (due to financial difficulties) and have moved house, so any communication will have to be in writing, either through email as of present or by Royal Mail. Until further notice all letters should be sent to the following address:

 

XXXXX

XXXX

XX

XXXXX

*******************************************************************************************************

Do I need to write anything more at this point of time, or should I leave it at that and await their next question?I was thinking of pointing out to the adjudicator about the pre-ticked box, but I don't know if that is a good idea or not........

[ims21]

You can certainly mention the employment history but at the same time you can point out to them that you do not see the relevance of this.

 

As I understand it, MBNA sent you an application with a pre-ticked box. Make sure that is made known to fos.

 

Also make sure that you make the point that it is not for the lender to decide whether PPI is required, it is up to the the customer. Emphasise the point that it is not the mis-sale you are now complaining about, you have already received confirmation from MBNA that they mis-sold. The imprtant thing is that they are not offering you the correct amount of redress.

[AB1979]

Thank you Thank you

 

Does this sound OK as an addition to you?

 

"I am somewhat confused as to the relevancy of the above information. As you are aware my query is not with whether or not there has been a mis-sale, but with the correct level of redress (i.e. a refund of all premiums paid plus related interest). MBNA deciding to pay for only 12 months of premiums plus related interest implies that they believe that there has been a mis-sale.

 

I should reiterate, as I have in previous correspondence, that the box requesting PPI on the account was pre-ticked on application and I believe that according to your Handbook on Dispute Resolution that this results in a mis-sale. The option whether or not to take up insurance in this instance should be the choice of the consumer, not the lender."

[ims21]

Thank you Thank you

 

Does this sound OK as an addition to you?

 

"I am somewhat confused as to the relevancy of the above information. As you are aware my query is not with whether or not there has been a mis-sale since the lender has already admitted that there was by offering redress, but with the correct level of redress (i.e. a refund of all premiums paid plus related interest). MBNA deciding to pay for only 12 months of premiums plus related interest implies that they believe that there has been a mis-sale. Change this bit to read "It is quite clear that there is an admission of mis-selling by way of an offer to refund some of the premiums and interest. If the product was mis-sold then redress should not be limited but should include full redress for all premiums paid, the associated contractual interest plus 8% compensation where appropriate. It is quite clear to me that the lender is deliberately attempting to mitigate their losses in the misguided belief that claimants are going to trust them in their decisions and calculations".

 

I should reiterate, as I have in previous correspondence, that the box requesting PPI on the account was pre-ticked on application and I believe that according to your Handbook on Dispute Resolution that this results in a mis-sale. The option whether or not to take up insurance in this instance should be the choice of the consumer, not the lender."

 

 

Consider the amendments I have made in red above

[ken100464]

Just jumping in here.

 

Do not accept any offer they make without satisfying yourself it is correct.

 

MBNA are calculating redress in their own way with their own rules. This is just another example of them not doing what they should do.

 

There is an awfully long thread called interpretive calculations in the MBNA section. Perhaps the first half a million posts are worth missing but some good info worth keeping eye out for now and shortly. Worth subscribing to.

[ims21]

Just jumping in here.

 

Do not accept any offer they make without satisfying yourself it is correct.

 

MBNA are calculating redress in their own way with their own rules. This is just another example of them not doing what they should do.

 

There is an awfully long thread called interpretive calculations in the MBNA section. Perhaps the first half a million posts are worth missing but some good info worth keeping eye out for now and shortly. Worth subscribing to.

 

Yes indeed ken...this is the thread

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?372400-MBNA-PPI-Award-%93Interpretative%94-Calculations

 

I have been keeping an eye and you guys are doing some sterling work there.

[AB1979]

Consider the amendments I have made in red above

 

Considered and changed

[AB1979]

We have mail............

Dear XXXX

 

Thank you for your email dated 2 February 2014 and for providing me with details of your employment status during the life of the payment protection insurance (PPI) policy.

 

I have also requested that MBNA Limited (MBNA) provide me with further details regarding its offer as I understand that it has offered to refund the PPI premiums and associated interest for one year only. While I note that an offer has been made, I do not currently have a copy of the offer letter on file. For this reason it is currently unclear whether MBNA has accepted liability for the sale of this PPI policy when making its offer. I have requested this information from MBNA and await its response.

 

If MBNA has not accepted liability for the sale of the PPI policy, it would be useful for me to have details of your employment status on file to help me consider your complaint. I may need to consider the sale of the PPI policy as part of my investigation but once I have more information about this point I will let you know.

 

 

Yours sincerely

 

XXXX

 

I'm confused, I thought the sale of the policy was the original reason for missale?

[AB1979]

Something else I've discovered while reading up on the subject. This is regarding the level of benefits paid out.

 

If I'm correct, most policies paid out 10% of the monthly balance for a period of time, but at the time of my credit card being received MBNA only paid out 3%, and later they were forced to raise this to 5% (I can't confirm this because I don't have a copy of the policy to hand - they didn't send one in my SAR).

 

Would that affect any decision either way, and is this something that should be communicated to the adjudicator?

[AfterMidnight]

Something else I've discovered while reading up on the subject. This is regarding the level of benefits paid out.

 

If I'm correct, most policies paid out 10% of the monthly balance for a period of time, but at the time of my credit card being received MBNA only paid out 3%, and later they were forced to raise this to 5% (I can't confirm this because I don't have a copy of the policy to hand - they didn't send one in my SAR).

 

 

AB1979 - I've seen similar content on at least one Ombudsman Decisions recently. Front page of FOS site - link for Ombudsman's Decsions and then search for "MBNA" (while filtering for PPI and maybe the last couple of months) on search page. You may have seen this, but from recall the point there involved payment being 3% while minimum payment was perhaps at the time 5%? Whoop-de-doo-not if a claim was ever successful. If you haven't looked there much recently, it is a bit like studying your way through "past papers" looking for any gold arguments that won the day (or otherwise!).

[AB1979]

UPDATE:

 

Adjudicator wrote to MBNA requesting information by the end of January. So far MBNA have not responded.

 

Hmmm............

[Andybars]

A delayed response is no surprise and FOS are not keen on chasing lenders for this. I would certainly try and push the adjudicator for a timescale as to when he will move to adjudication without a case file (given that this is originally requested by FOS when the case is "converted" (usually once they are happy they have all your paperwork for the case). It is absolutely worth bringing to the adjudicator's attention that you have now been made aware (from the FOS website) of the derisory amount that the policy would have paid out as one of the things that FOS look at when deciding whether you would have taken out a policy is did it offer "value for money"

[AB1979]

It seems that MBNA have responded....

 

I have received additional information from MBNA Limited which I will be reviewing over the next few working days. Once I have reviewed this information I will be in a position to let you know the next steps for this complaint.

 

As MBNA Limited has told us that it does not believe it has mis-sold you this PPI policy, we may need to investigate the way this policy was sold to you. If this is the case, I will be in touch to let you know and to explain the next steps.

 

I don't know if that is good or bad news, but we'll see.

[AB1979]

New Letter from FOS:

The paperwork MBNA send to me included a copy of its offer letter. I have now considered this letter and would like to take this opportunity to let you know the next steps that could be taken with this complaint.

 

When we decided, or a business accepts, that a PPI policy has been mis-sold, we would usually expect a financial business to refund all of the PPI premiums paid and interest charged on those premiums with 8% simple interest. MBNA has not followed this approach and I understand that you are unhappy with its offer.

 

When a consumer is unhappy with an offer, which has not been made following our approach, the next step would be for an adjudicator to consider whether the PPI policy was mis-sold. I would be grateful if you could read the information below and let me know whether you would like to settle this complaint on the basis MBNA has offered or for me to arrange for this complaint to be given to an adjudicator to consider the sale of the PPI policy.

 

• I cannot say for certain whether we would recommend that a complaint about the sale of the PPI policy should be upheld and that redress should be paid.
  
• Without completing our investigation into the sale of the PPI policy, I cannot say for certain whether this approach is likely to result in more or less compensation that MBNA’s current offer.
  
• If we continue with our investigation into your complaint about the sale of the PPI policy, MBNA may withdraw its current offer.
  

 

Please let me know if you are prepared to settle the matter on the basis MBNA has proposed. If you are – please let me know. On the other hand, if you remain unhappy and do not want to accept the offer, I would be grateful if you could let me know.

 

I would like to take this opportunity to remind you that this offer has been made without any investigation by us. Because of this, if you do not wish to accept the offer, the next step would be for one of our adjudicators to investigate your complaint about the sale of the PPI policy. Unfortunately, I am unable to advise whether or not we would uphold in your favour should we investigate this complaint.

 

What do I do now?

I'm hoping if I reject this I can go to an adjudicator straight away, but if not...........

[AfterMidnight]

Hi AB79

 

 

I guess the main decider here for FOS to ponder on - may be if you could have submitted a claim with any chance of success of that claim in the years after your Uni days. From earlier posts it looks like there may perhaps have been a (brief? the years are obscured) period when that could maybe have been the case, but for the majority of time perhaps not. Seems logistically (i.e. not defensiblely) strange for them to pay for one period when you could not claim, but not a consecutive period when same logic/different circumstances applied...

 

 

There are more reasons of course for a miss-sale than employment status factors, and although that is very much what you have majored on in arguments so far, it is worth considering other reasons as suggested in previous posts (without changing tune, just adding to the argument.)

 

 

Have you actually had or requested MBNA's calculations? Do you know what interest has been added, and how that has been calculated? MBNA are generally a fairly inventive lot in terms of redress, and there may be other bits hiding in there too.

[AB1979]

Have you actually had or requested MBNA's calculations? Do you know what interest has been added, and how that has been calculated? MBNA are generally a fairly inventive lot in terms of redress, and there may be other bits hiding in there too.

I SAR'd them long ago and have the calculations somewhere. I can post it up tomorrow if anyone wants a look.

I forgot to mention that when MBNA sent their offer they didn't offer a breakdown or any calculations, so I had to use one of the spreadsheets here. This is slightly complicated by the fact that the interest rate changed a year and a bit after the account opened. In the space of I think 16 months the rate went from 15.9% to 34.9%.

 

Edit: the main thing I'm concerned about is rejecting this offer and having to go to the back of the queue and waiting another 2 years, which would be outrageous. If this gies straight to an adjudicator then I snap reject this.

[AfterMidnight]

I would suggest that posting up anonymised calculations can certainly do no harm, and there may be a few things in that which are not immediately obvious unless you have seen a lot of these.

 

 

For your main concern though: You could, I suppose, ask your case worker to spell out what the logistical next-step timescale implications would be (e.g. re-queue or continue) for taking either and each of the steps...(not that you necessarily are in reality considering one of those too hard).

[AB1979]

They've passed it to the adjudicator straight away.

 

I might have some news for you very soon.

 

Meanwhile enjoy my calculations and see if I've made any mistakes. I've used both sheets recommended, I don't know which one is correct.

[citizenB]

I will ask one of the PPI guys to have a look at your figures.

[ims21]

Hi

 

Dropping in as requested by CB.

 

The fosrunningsheet is the one to concentrate on and it all looks like you have completed it correctly and so it will give you the best picture of what your redress should be.

 

It might be a bot on the high side because you have used the high interest rate for the whole period and from what you have said, the interest rate was lower in the early period.

 

Another thing that could affect the amount due is whether the account was paid off and closed or was it defaulted and passed to a DCA?

[AfterMidnight]

Hi AB 1979

 

 

While maybe a stage away anyway yet: worth considering that, if successful in "adding years to your claim", FOS will ask MBNA to recalculate.

 

 

As in - a recalculation is not something FOS do themselves - and MBNA would almost certainly, if so directed, use the method the bank have been using for approaching a couple of years now - with particular idiosyncratic mechanics of how they do that, as you may have observed from other threads. The firm's method apportions PPI interest against account interest monthly as a percentage of that overall monthly interest. So is different in reconstruction principle, as opposed to fosrunning and (the killer factor) MBNA use a rather different method of calculating and labelling and handling interest. So - even with a lower estimate of account interest, anything supplied by MBNA off-their-own-bat will likely resemble little any calculations from fosrunning, or any sensible and conventional calculation. FOS are perhaps currently at the dawning realisation stage of realising MBNA's calculations may not be quite what they assumed they were.

 

 

This may have little immediate impact for you - but I would certainly, if things progress as you might hope, in your own shoes, highlight the point that you would like "an undoubted Example 6 compliant recalculation please" - as you have heard MBNA's own recent-years calculations are ...perhaps allegedly under suspicion of actually not, under examination, being regulatory compliant.

[AB1979]

Hi

 

Another thing that could affect the amount due is whether the account was paid off and closed or was it defaulted and passed to a DCA?

 

Thanks for your help!

 

The account defaulted and was passed on to a third party DCA.

 

but now I have news....

 

 

FOS Upheld. Just waiting for MBNA's reply. Here's hoping that they don't appeal or delay.

 

What I need help for now is drafting a letter to the FOS making sure that MBNA pay me in full rather than paying the DCA and sending the rest to me. And also in reminding them of MBNA's funny calculations (and their lack of a breakdown in their original offer).