Hi Everyone, Just thought I would give you an update. After being threatened that my legal costs would be very high since they would be using expensive expert witnesses I relented and accepted their offer. This was on the condition that I could refer it to FOS. They assured me that FOS were fully aware of their method of calculations and that they were fully confident in their calculations. The whole process really took it out of me and I did nothing, promising myself that I would get round to it at the weekend. Lots and Lots of weekends went past. Then I had some bad news and had to find a utility bill to use as proof of identity. I started to go through the stack of unopened moaning mail and opened a letter from Capital One. This letter explained how the process of calculating PPI was very complicated. I knew this since they were not able to calculate it correctly as I tried to explain to them over many, many, hours of recorded conversations. BUT .. They had realised that they had been miscalculating and were sending me a cheque and putting money on my card. Guess what ... this amounts to the amount that I claimed that they had underpaid in the first place !!!! All cards seem to use the same software to calculate PPI and they don't seem to understand how it works so therefore I am eagerly awaiting a similar letter from other companies that have tried to under pay. I will NEVER leave a letter from a card company unopened again. This could mean a fresh start for me and I am very happy !! I am thinking about claiming back my legal costs from Capital One. I paid over £1000 and I think that they knew at the time that I was right but used their financial muscle to bully me into accepting. I believe that they knew since in a telephone conversation with their Analyst he said that a certain column was compound interest. I said that it could not be since it went down as well as up. He explained that this was due to the different number of days in months. Obviously this was incorrect since a sum of compound interest cannot go down. They caused me a massive amount of stress and I am wondering whether there is any precedent for claiming back court costs and some recompense for their attempt to mislead myself and the court.

I attach my FOS Running spreadsheet using their values. It is obviously quite clear that they are NOT using compound interest at ANY time, regardless of PPI balance. I will be forwarding this to FOS along with a transcript of the telephone conversation that I had with their analyst where he stated that they should be using compound interest and trying to tell me that the compound interest went down because of the number of days in the month. Very obvious that they don't actually know how to calculate the redress, they just rely on the software.

I have accepted the Capital One offer but stated that I would only do so if they allowed me to refer the case to FOS (no barring due to time). I was fighting a losing battle when they would not/could not give me the calculations used and their threat to expose me to large costs incurred whilst trying to explain lots of hypothetical cases rather worried me. I did point out that I would rather they spend their time explaining MY calculations but apparently they are not able to do so. I think this is because they put blind trust in their VERY complicated software and don't really know how it does the magic. They are however certain that it is FOS and FCA approved. What I am 100% certain, and was confirmed by one of their analysts, is that they are not paying "interest on interest" as they stated in my redress offer. I will be contacting FOS and sending them the spreadsheet that Capital One sent me along with details of how they have underpaid me and I rather suspect quite a few other people.

Than that means that the FOS running spreadsheet is incorrect, as is the other CISheet (Compound Interest) Sheet.

Here is the latest. "We have sent you a spreadsheet setting out the hypothetical reconstruction of your account month on month, and the calculation of redress accordingly. We have also invested a considerable amount of time in explaining to you how the calculation is performed. We have explained that calculation of PPI redress is complex, as is the software we use and which must account for numerous customer situations, actual and hypothetical. It is not as simple as disclosing a ‘formula’. We believe we have done all we can to assist you in understanding our approach." The calculations they sent me included an Offer of Redress. This included interest up to the present day. Now Capital One are saying that they will not honour this offer but instead stick to their initial offer. Whilst I think that this is a mistake it really gets my back up to think that we have been negotiating over the last 2 months using calculations which they now say are not valid and they will not stick to. To me it is worrying that they cannot supply me with the formula used in calculating my redress. In effect I have to 100% trust them. Then we have more ... "It seems to me you continue to misunderstand the difference between our approach (which is in line with FOS guidelines) and your own, and in particular what we mean when we say in our offer letter that ‘Any interest refund is compounded over time, which means we add interest onto the interest we refunded for the previous month’, or at least the way in which this is achieved. You believe that the figure in column T should be compounded so as to increase month on month, without reflecting any activity on your account. We have already explained that this is over-simplistic, and that the compounding we describe in our letter is achieved by reconstructing your account balance month by month as it would have been had you not purchased PPI. So, for any given month, we take the previous month’s reconstructed balance and strip out the monthly premium, interest charged on the premium and any charges added to your account as a result of the PPI; we also account for payments to your account (stripping out any surplus payments). The new reconstructed balance is then carried forward to the next month, where the same exercise is repeated, and so on. It is through this iterative approach that you see the effect of the compounding; put simply, the reconstructed balance is rolled over month by month, showing the cumulative effect of the refund but also accounting for payments to your account. Column T simply sets out the associated interest calculated month by month on the difference between the actual and reconstructed balance i.e. we ‘calculate and refund the difference between the amount of interest that was actually charged and that which would have been charged if PPI and any charges caused by PPI had not been added to the account’ as stated in our offer letter. Because the reconstructed balance on which the calculation is based reflects any previous refund of interest, we do (as we say in our offer letter) add interest onto the interest we refunded for the previous month. Whether or not this accords with your own view of how compounding should apply, I can assure you our approach is in line with FOS guidelines. We have previously referred you to the relevant guidance, and you will therefore be aware that FOS consider it good practice in a situation where a customer has habitually made the minimum monthly payment to their account to hypothetically reconstruct the account balance without the cost of PPI and any interest and charges paid as a result of PPI being included on the account (as we have explained we do month by month) and refund the difference and to consider the impact the reconstructed balance would have had on the payments made to the account, awarding 8% simple interest to compensate for the loss of use of any surplus (again, as we have explained we do). Your own calculations provide for you to receive sums over and above that provided for by FOS guidance and would go beyond putting you in the position you would have been in had you not purchased the PPI by refunding interest you never in fact paid. "

During a telephone conversation with one of their analysts they stated that column T should be compound interest. I questioned why the "compound interest" went down as well as up. He said that was because of the different number of days in the month. If you understand anything about compound interest then you must understand that the compound interest CANNOT go down. They are NOT paying compound interest.

I have put it into a FOS running spreadsheet and the total comes to £17,000 Capital One dismissed this out of hand. That's not the way that the calculate the interest. What I can say with 100% confidence is that their offer of associated interest does not pay "interest on interest". They calculate the interest from a particular month and then add it to the previous months interest. The reason that I am slightly nervous about going to court if that they refuse to give me all the calculations and they have warned me saying that they would be getting legal representation and charging me for their time looking into my claim. One avenue is to team up with a claims management company. They would have the deep pockets to provide a good lawyer and their reward would be substantial.

Hi Everyone, Here is the long awaited update but it is more in the form of a question as to whether I am going mad. The attached spreadsheet contains 3 sheets. Month by Month data is the sheet that they sent me, it does not contain any calculations only values. Summary of redress is what they offered. Calculations including CI is my attempt to make sense of their calculations. Looking at Calculations including CI .. I tried to work out how they got the column T of Associated Interest since it is this column that gives the associated interest used for the redress. I created column U which I calculated by multiplying the PPI premium by the interest rate (on cash advances). I then add to it the previous month's interest. I pretty accurately recreate column T which means that the only difference is in the interest rate used. Capital One state that they pay interest on the interest (ie compound interest) so I created the columns W and X. In this I added the interest from the previous month to the PPI premium and then multiplied it by the interest rate (again cash advances). I contend that Capital One are NOT paying interest on the interest from the previous month as stated "we add interest onto the interest we refunded for the previous month” In my conversations with Capital One they have stressed that the calculations are very complex. I believe that they may be BUT it must be more than a coincidence that the column T adds up EXACTLY to the associated interest that they are offering. Your input would be very much appreciated.

I was made an offer by Capital One in October 2013. As soon as I received the offer I questioned the amount and asked for full calculations. Due to handling another tricky claim with Mastercard I put this one on the back burner and only addressed it again in September. I spoke with Capital One and they agreed that it had been miscalculated. They offered £2000 in interest yet calculated the 8% as £900 .... which means that the payments plus interest MUST be 12.5 * £900. I have again asked for detailed calculations but they have declined to send these to me. I am opening a small claims for the full amount owed and will let you know how this goes. Their correspondence says that I cannot take this to FOS since it is over 6 months after their final response. I reply that since they have not given me full calculations I cannot agree to their offer. I cannot see how they can defend their position in court, especially given the recorded conversation where their representative states that he agrees with me and the amount cannot be correct. Wish me luck .....

I am amazed that every time a claim is made the whole process starts again. Make a claim, claim rejected, complain, claim accepted, small offer made, offer rejected, larger offer made .... At one time the banks were serious (kind of) of making reparations. Now they are routinely rejecting every claim and waiting for the FOS to make them pay. The guys on this forum offer great advice but must be getting tired of helping people to find a solution when it is like groundhog day. Why won't someone (FOS maybe) make a statement that the banks are treating customers with a total lack of respect and are routinely attempting to defraud their customers.

I attach my latest spreadsheet. The key thing here is that they offered me £900 for the 8% additional interest. This corresponds to the interest and premiums paid in reconstructing the balance as well as the amount that my account would have been in credit were I to not have had the PPI. £900 corresponds to some £12000 and I am entitled to that back as well. My calculations do not include interest up to today and are only for interest up till the date that the PPI was cancelled. There are lots of interpretations of PPI and the banks seem to use quite a unique one but if they have got the 8% right then I should be entitled to 12.5 * the 8% value at least. That is why I believe that their total of £7000 cannot be correct.

I have now got a pretty good understanding of how to calculate what should be due according to the criteria that you listed above. I have made numerous spreadsheets and they all come to roughly the same value. The key thing is that if they calculate the 8% to be £958 then the additional element due must be 100/8 * £958 (this is the interest and premiums paid that they calculated in order to get to the £958) As I said, a guy on the phone confirmed that my calculation was incorrect (recorded) but they are saying that I can refer to FOS but they will reject since it is over 6 months. They refuse to move on their original offer and despite numerous requests for them to detail their calculations they have refused to do so. They have offered me some £6500 and because of a company that I worked for going into Administration and owing me over £8000 I could REALLY do with the cash. In their acceptance letter they state that I must agree to not taking any further action against them. In an ideal scenario for me I would bank this and then go for the rest, this would also make the County Court claim cheaper and it would also mean that I could afford to do so. Would acceptance of their offer mean that I could not pursue them in the court for the additional funds (over £10,000)? I'm in a really bad place at the moment and really need to resolve this but don't want to accept £6,000 when I know that it should be £18,000

Thanks so much. Your spreadsheet does indicate very similar figures. Will have to look at amending to take into account the interest accrued between the end of the spreadsheet and now.

My claim was given a final response in October 2013. Capital One are saying that they don't believe that FOS should look into it since it is more than 6 months since their final response - they called it time barred. They are saying that it is their final response and they will not look into the calculations again and that is why I was asking if the FCA could force them into calculating correctly (they have admitted that it was incorrectly calculated).

What does this story actually mean for us. Banks to reopen 2.5m PPI claims after FCA inquiry I have a claim against Capital One which they made me a final offer in October 2013. Due to a few personal reasons I did not put it back to the Ombudsman until this month and Capital One have admitted that it was incorrectly calculated but are saying it is time barred so the FOS cannot get them to recalculate. Does this story mean that they will be contacting me and coming clean about the miscalculation (I very much doubt this)? Will they be forced to open all claims where the amount was disputed? I fear that without the teeth behind it then not much will happen and who is going to be able to force the banks into recalculating - is it the FOS or the FCA? How is the FCA involved in all this. Can we complain to the FCA, in one case against Mastercard they have lied to me throughout the whole process so if they receive complaints then I will do this. Don't suppose anyone has an email for Martin Wheatley, chief executive at the FCA?

I know that you have said this before and you are totally correct. The FOS guidelines however seem to express it in a different way in that the account will be reconstructed as if the PPI was never in place. Where there is a positive balance then the company should pay 8% simple interest on that balance. I have reconstructed the balance and 8% of the positive balance works out at around £1000. This means that the positive balance is around £12,000. The FOS guidelines indicate that this amount should be returned along with the 8%. The fact is that if you work out 8% interest and the compound interest and add the premiums paid then you come to exactly the same figure as the reconstruction award. I am saying that Capital Once reconstructed the account, got the balance figure and correctly awarded the 8%. Then they did something magical and awarded the premiums paid (£3000) and compound interest of £2000. This comes to £6000. What they should have offered is the £1000 (8%) and then the £12000 (reconstructed balance). I maintain that they are correctly calculating the 8% to keep HMRC and then doing some magic with the remainder. I have pointed this out to them but they are saying that it is time barred and hence FOS cannot help with a adjudication. I am suggesting that if you get a figure for the 8% then you should multiply this by 12.5 and add it to the 8% and that MUST be the minimum that you should be receiving.

I have so many voice recordings from Mastercard where they tell me about the Star Chamber and how my calculations are nearly complete. I now know that this was all a lie and this has been confirmed in subsequent phone conversations. Having reps clearly having a laugh at my expense is very galling and has really annoyed me. Maybe I should just post it all on YouTube !!

The really important point here is that they use compound interest to calculated the revised balance (so as to make HMRC happy) yet do not seem to include this in their redress. There can be no excuse for this.

Yes, I agree with you totally. That is why Capital One who offered me £958.23 of 8% interest which means a credit amount of £11977 cannot be right in offering me only £6000. The correct amount is the £11977 plus the £958.23

Sorry, back again. Please find attached a corrected spreadsheet. I understand that I have changed the column E from being calculated to being values from my statements, it is just easier and quicker to enter. What is interesting is that the 8% matches what Capital One offered me. So the result of the recalculation resulted in the same balance difference between what I have calculated. When I queried Capital One about this my line of argument was that if 8% of something came to £1000 then the bit it was calculated from must be around £12000 and therefore I should have that back as well. The interest element of their calculation was £2000 and they correctly calculated my premiums as being £3000. They therefore offered me £3000 + £2000 + £1000 ... is £6000 The attached spreadsheet shows both types of calculation ie adding premiums to compound interest to 8% interest and also the reconstructed balance minus the current balance and then adding on the 8% and as you can see they are the same (of course). This therefore means that my argument with Capital One was correct in that if you calculated the 8% as being £1000 then I should also get back the amount that this was derived from ie the £12000 I also attach my recalculated Mastercard Spreadsheet. Both have the interest rate as a separate column since this makes multiple rates much easier to enter. Perhaps it would be worthwhile using a version of this modified spreadsheet since it does make it much clearer and easier to enter. If anyone is interested then I am prepared to do some more work on the spreadsheet to allow a column for charges applied to the account since according to the FOS any charges that would not have been applied had the account not had PPI should also be refunded (with interest). I am now much more confident about the calculations since I understand how they should be calculated and can also see how the banks are "massaging" these in order to reduce their liability. I think the 8% is the most telling since they know that if they "massage" that figure then they are doing HMRC out of money and potentially risk their wrath. I am willing to bet that this 8% is correct in the vast majority of cases and hence to calculate your correct refund you can use this simple formula 8% interest figure = x Correct redress = x + (x * 12.5)

That is where I got the spreadsheet from. I am looking into why the spreadsheet I attached in my previous post does not seem to work correctly. Will post back later. I really appreciate your input on this !

I have added a Capital One spreadsheet that I am also working on. This is the original spreadsheet. I think you will agree that there is something wrong with the spreadsheet. Column G has the formula =IF(E18="","",IF(E18>=0,0,I17+F18)) This should be =IF(E18="","",IF(E18>=0,I17+F18,0)) Column I (Card balance excluding PPI) is card balance PLUS PPI and has the formula =IF(OR(E18="",I18=""),"",E18+I18) This should be =IF(OR(E18="",I18=""),"",E18-I18) Column K which is 8% simple interest on balance is not calculated correctly. If the last poster is correct then should we not use compound interest anyway. I am really at a loss to understand how they come up with their figures.

More info PPI balance at start of month : spreadsheet is saying if card balance > 0 then PPI balance = 0 .. this is wrong Card balance excluding PPI is actually card balance + ppi .. this is wrong If card balance excluding PPI goes negative (ie in credit) then the 8% interest is zero .. this is wrong The standard spreadsheet appears to be wrong at least on these three column calculations

I have removed the extra cols and added one extra one, that is a monthly interest rate so that you don't have to create multiple sheets to cater for each change of rate. I attach 2 spreadsheets. The first is the original one (unchanged apart from the interest rate column) and the second is how I think it should be done. There is clearly something wrong with the original spreadsheet but I am not sure I have corrected it successfully. I appreciate you have a lot on but getting this spreadsheet right is so important to pursuing claims.

Thanks for taking a look. I will pm you with my email address if you don't mind and I would be very interested in putting my figures into your spreadsheet.