Business account PPI, is offer correct?

[fedupandcross]

Hi, I was recently contacted by Lloyds to tell me I may have been miss old PPI on my business account. In deed I would have been as I have never knowingly had PPI due to being self employed and believing it wouldn't cover me.

I also asked them to look at another business account I had with them. I had two separate businesses.

 

The first Business (lets call it T) account it appears they managed to add it to 3 loans, therefore I believe it impacted on every loan that was replacing the last. As well as adding PPI to its overdraft. I have been offered £2791.38 settlement but no one can give me evidence of where this came from as I would need to pay £10 for them to get it from the archives! The letter breaks down amounts for each account but doesn't even give a date the loans were taken out.

 

The second business (lets call it C) it turns out also had PPI added to a loan. This time they are able to tell me the exact date and I can check my statement and see it going out. This was 9th September 2004. This business account was settled (due to closure of the business) and a partial refund was refunded 16th July 2007.

The total they are offering on this account is £2654.70, in my opinion suspiciously similar to the offer made on the account mentioned above.

 

The first business (T) I sold a few years back so no longer have either of these accounts now.

 

Firstly, the bank are fully aware I have no paperwork, insurance policy for these PPI insurances, as I had no idea I ever had them. Therefore as I said to them, they could be plucking figures out of the sky for all I know.

 

Secondly, surely the PPI could have impacted on any charges I received in the current accounts of these businesses for using an overdraft facility?

 

Regards the first business account (T) I have contacted the financial ombudsman and sent them the information as,

a)I was really not happy that I was expected to pay £10 to get information I should have been supplied in the first place.

b) When I phoned Lloyds they couldn't tell me how they came to the figures supplied, after a lot of going round in circles the only thing they could say was that they asked the insurance company!

 

So My real question is

a) Regarding the second © business account Loan, which they have supplied more information on, could it have impacted on the business account and so can I claim charges on the overdraft?

b) Can I rely on the Financial ombudsman to get to the bottom of the First (T) Businesses PPI that was added to three loans and an overdraft?

 

Sorry for such a long post but do not want to be ripped off and surprise surprise do not trust the banks!!!

[ims21]

Hi

 

In answer to your direct questions...

 

a) The overriding principle is that you should be put back in the position you would have been in had the PPI not been charged in the first place. So if you suffered any financial loss such as bank charges and associated interest which are a direct result of the PPI then that should come back to you as well.

 

b) Fos I am afraid are hot and cold and not always as effective or as competent as they should be. If it were me I would be doing my own homework as well.

 

You say that you have no paperwork for these accounts. I would be inclined to get a SAR off to the lender to see what data they hold. Make sure you add a line to the SAR to say that it should include copies of all and any loan/overdraft agreements you have ever had with them.

 

The template is in the CAG library. There is a statutory fee of £10 payable and they will have 40 days to comply.

 

In addition I would be writing to the bank and demand a full and detailed breakdown as to how their offer is calculated. You cannot be expected to accept or decline any offer until you have checked that it is correct.

 

They may baulk but I would keep at them.

 

And yes, you are absolutely correct, Never Trust A Bank!

[fedupandcross]

Hi,

Would that be the same as the DSAR that they have suggested and sent me a form to fill out for. It would appear they want the £10 for each account?

If I go down that route what am I looking for when I get it (have no idea what information it will give me). surely it doesn't provide all bank statements interest, charges etc, or does it?

[ims21]

Yes SAR/DSAR....same thing.

 

It is not £10 per account, One payment will get you everything they hold on you for all your accounts and dealings with them.

 

A SAR should get you copy statements/transaction histories and may even get you copies of the agreements if you are lucky. Make sure you add a line to the SAR to request them.

 

Don't fill out their form, send a proper Subject Access Request based on the full SAR template in the CAG library.

[fedupandcross]

Well I have probably all the bank statements already as they went to the accountant and I then have to keep all the accounts for years (being self employed). Having said that it would be easier to just pay the £10 than to route through years of accounts to find statements.

I have to admit I really do not understand this PPI thing. What I can gather so far is that I have paid PPI premiums, I believe this was added to the loan up front, therefore I would have paid interest for the PPI because it was added to the loan that I paid interest on. So I am assuming if i can some how work out how much of the payment each month was for the PPI (interest/premium) I would be able to work out what the balance on my account would have been if it had not been added. And then I would have to work out how much interest I was charged for using the overdraft for the amount the PPI increased the overdraft by. But having said all that, they also tell me that I had PPI on my Overdraft and I have no idea how that was worked out. They have just said I paid premiums of £220.50 and that they will pay me interest of 8% on that.But then they are going to tax that 8% and send it to the tax man, despite the fact I am not working or paying tax

It all seems very complicated, far more so that the very simple workings out they have given me that goes like this;

 

Overdraft

Refund of premiums £220.50

Interest at 8% £147.12

Basic rate tax deduction on 8% interest -£29.42

Total £338.20

 

Loan 1

Refund of premiums £94.41

Interest attracted by these £15.59

Interest at 8% £78.06

Basic rate tax deduction on 8% -£15.61

Total £172.45

 

Loan 2

Refund of Premiums £121.89

Interest attracted by these £42.09

Interest at 8% £112.87

Basic rate tax deduction on 8% -£22.57

Total £254.28

 

Loan 3

Refund of premiums £147.32

Interest attracted by these £37.05

Early Settlement difference £11.24

Interest at 8% £124.96

Basic rate tax deduction on8% interest -£24.99

Total £295.58

 

Loan 4 (this one they tried to add it on but I spotted it, what a carry on that caused at the time)

Additional interest only

Refund of premiums £0.00

Early Settlement difference £1255.68

Interest at 8% £593.99

Basic rate tax deduction on 8% interest -£118.80

Total £1730.87

 

None of the above means anything to me, which is why I said they could have plucked it out of the sky for all I know.

Does this seem a normal breakdown with no dates etc.

[ims21]

That is how they normally present an offer, yes.

 

You might like to have a read of the item linked at No.1 in my signature about single premium PPI policies.

 

With the overdraft account you should ensure that you get back the premiums paid and any interest that you incurred as a result. I would bet their interest rate on an overdraft was greater than 8% simple interest.

 

What you need is base data. Even if you don't get the copies of agreements with the SAR, the opening loan account statements may well show the split of the loans between PPI and cash loan which would an immense help.

 

Again, demand a full and detailed breakdown from the bank.

[fedupandcross]

Gosh, had a quick read through the Single premium PPI Q&A this is going to take me some time I think.

So just thought I would grab the accounts for the other business that was less complicated.

I can see from statements that yes the letter is correct in the fact that the statement shows 9th September 2004 insurance for £1832.48 going out.

It also shows an arrangement fee for £375 going out. The total loan amount going in is £27207.48.

These seem very odd amounts to me.

The repayment each month is £584.80

So I was trying to work out how much of the monthly payment is for PPI which I think is about £39.38, but with such odd amounts its making the exact calculations a little tricky.

I then flicked through the other bits of paper in the statements and found,

A sheet that just had, Interest rates which apply on 7th September 05 stating Fixed rate loan 0.87% pm, don't really know what thats all about.

Have also seen that I have lots os sheets of paper that have = rates for Band A Overdraft 0.85% pm and other sheets for other dates 0.92% pm and various in-between, however the Unauthorised Overdraft amount seems to always be 2.00%pm.

How would I then work out if the PPI caused me to use the overdraft and incurred me interest here as well.

 

The bank break down on this business is

Refund of premiums £920.11

Interest attracted by these £419.06

Early Settlement difference £431.34

Interest at 8% £1105.24

Basic rate tax deduction on 8% -£221.05

Total £2654.70

 

In way of explanation they say I took the loan out £27207.48 on 9th September they say £1832.48 was for PPI.

When I closed the loan early on 18th July 2007 a partial refund of my leftover PPI premium was paid to me on 16th July 2007 and was £481.03.

 

I can see from the bank statements I have lots of bank charges for both authorised and unauthorised borrowing so not sure how to work through this.

 

Will definitely pay the £10 to the bank for the DSAR but in the mean time I think I would like to have a go at sorting through the statements for this business as its a shorter time scale, I will be able to find the statements and it should be more straight forward with just one loan PPI and no other PPI on anything else.

[ims21]

Ok first bit is easy....

 

Total loan = £27207.48.

 

PPI loan = £1832.48.

 

PPI percentage is 1832.48 / 27207.48 x 100 = 6.73% (which actually seems low!)

 

so 6.73% of each monthly repayment was for the PPI part of the loan which is indeed £39.36 per month.

 

As the loan was settled early and you got a rebate, you need to find the settlement balance on the account immediately before the rebate was applied. 6.73% of that figure would be the as yet unpaid PPI and it should be that figure which was rebated (but I would reckon that the rebate was less).

 

Take your 6.73% figure and deduct the rebate actually received to find the amount that you overpaid on the PPI at settlement.

 

These figures can be entered into the statutory interest spreadsheet in the article I linked you to earlier and you can then check whether the offer made by the bank is correct.

 

The overdraft one is a bot more tricky as you will effectively have to examine the account to see what the position would be if the PPI were removed. You would need to see how that affected the balance and the interest charges. You could use this spreadsheet to get an idea of the interest charged as a result of the PPI.

 

CISheet v101.xls