How can a bank use a PPI payment?

[RachelBA]

I've currently been told I've been awarded £3,700 pounds from a credit card that goes back to 2001 with RBS

(not got any money yet though).

 

 

However, in the text sent to me it said that

 

 

"It was under investigation with the claims department because of outstanding amounts with the RBS Group"...

 

I had another credit card with RBS that I am paying off and still owe £1,200.

.. Can RBS use the 3700 from the PPI credit card to pay off the outstanding on the other credit card?

 

 

Is it not a separate debt?

Or is it the case that this IS allowed...

 

Thanks

[citizenB]

I think they are permitted to offset some of your PPI refund against any other "debt" you might have with the bank, yes

 

 

Is the other card still with RBS or has it been assigned to 3rd party ?

[RachelBA]

Yes, the card (debt) is still with RBS;

I got a letter this morning.

 

 

Although (and this raises another point)

I'm pretty sure it was with a third party until recently.

 

 

So, it looks like thay have bought it back from them..

. I have read that this happens sometimes.

 

 

Will let you know whether I get the PPI offset to the debt of another card !!

 

 

I have all paperwork... so also will let you know whether or not it has been sold

-back before the PPI cheque arrives.

[citizenB]

Yes, please do let us know what happens - it will be interesting to know if they have purchased the account back from a 3rd party in order to do the offsetting.

[RachelBA]

Used some of your wording in a search and found this an article on the thisismoney site (my score is not high enough to post links)...

 

"In one case, a Money Mail reader from Waterlooville, Hampshire, had a £1,300 refund used to pay off a chunk of his £6,300 loan by Nationwide BS, despite having agreed a more lenient repayment plan after losing his job.

 

Nationwide says: ‘As with all financial services institutions, Nationwide has the right to set PPI compensation payments off against debts due on the account to which the PPI applies"

 

Taking a debt off one card, with PPI from another would not apply above? Two different 'accounts'?

[citizenB]

So the PPI in your example was from the loan and indeed I would have fully expected them to repay that back to the loan, moreso if it was in arrears.

 

 

The offset rules usually apply in the situation where there might be a current account with unplanned overdraft and a savings account with money in it. Probably also if the same savings account and credit card account that was in arrears.

 

 

So, I am not sure whether or not if you were to challenge them with the two different card accounts whether they might cave in.

[dx100uk]

if you have 'a debt' with a bank

and you get 'a PPI refund'

from said same bank

 

they can offset

 

however, if they offset the 8% stat int

they should not be taxing you 20% income tax

[RachelBA]

Just checked the paperwork. The credit card that has NO PPI on it that I still owe RBS; has been with Triton and Moorgate in recent years... both companies saying that 'they are acting on behalf' of RBS.

 

So, just in the process of getting the PPI payment off the other RBS card and for the first time in six years the credit card (the one with no PPI on) is now being handled by RBS again!!!

 

Will let you know the outcome ... should be this week!