Incorrect interest rate applied to loan by bank

[Spurs9]

Hello All,

some advice requested - please and thank you.

long story short - Following SAR, I discovered that the bank had applied an incorrect rate of interest to a loan i took out way back in 2002 (i had thought the "extra" was due to PPI). After an amount of to-ing and fro-ing bank rejected PPI had been included. Bank argued re the "extra" monthly repayment amounts but paid £100 for distress and inconvenience directly into my account and advised me to contact FOS if not happy.

Matter therefore promptly referred to FOS. The bank now agrees that the 16 monthly repayment amounts were incorrect and have offered to refund the overpayments ONLY with an additional £75 for distress and inconvenience.

 

Question - is this offer fair and reasonable? i.e. no offer of interest % repayment- be it statutory 8% and/or other related and claimable interest...and on what substantiated basis could one put forward an argument for repayment?

 

I have to respond to this offer within a matter a days and thus it would be marvellous to hear from you all in due course.

 

Many thanks indeed.

[citizenB]

Will try to find someone to help.

 

I don't think their offer is at all reasonable, I would think you are entitled to interest at their rates at the time - not sure about the 8% as I think that is only awarded by the courts.. but someone else will surely know.

[dx100uk]

IMHO you should be entitled to 8% statutory interest as you have been deprived of use of the money

 

 

have the FOS specifically commented or been asked upon this factor?

 

 

dx

[Spurs9]

IMHO you should be entitled to 8% statutory interest as you have been deprived of use of the money

 

 

have the FOS specifically commented or been asked upon this factor?

 

 

dx

 

Thanks both for your responses. FOS believe the offer is fair & reasonable as it stands..though, to date, I have not suggested nor requested their consideration of appropriate interest redress. Your thoughts?

[citizenB]

Is this still with a first tier adjudicator or have you escalated to an Ombudsman proper.. if the former, then IMHO, you need to escalate and have someone with more experience handle your complaint.

[slick132]

Hi Spurs,

 

It's no surprise that the FOS are happy with the bank's offer.

 

In addition to them repaying the amount you've overpaid, have they also paid you £100 + £75 as Goodwill Gestures.

 

To see if this is fair or not, use our Simple Int't 8% spreadsheet and enter the overpayment amounts with the relevant dates, to see what int't is shown.

 

Also, what was the rate of interest applicable to the loan.

 

The other way of dealing with this matter is to expect you to be returned to the position in which you would have been if the errors had not been made.

 

[Spurs9]

thanks all.

-the £100 paid and further £75 compensation offered - was described as being "in recognition of the distress and inconvenience caused". Goodwill gestures?

-the correct ROI should have been 8.651% but charged me 9.011%

- the simple Int't 8% s/sheet indicates that the combined £175 above exceeds the 8% int by some £60..

 

I appreciate this is all small fry and am grateful for you taking time to respond.

[slick132]

Hi Spurs,

 

If the Comp'n exceeds 8% Int't by £60, I think you should accept the offer and move on.

 

If you escalate the complaint to an Ombudsman, I doubt you will get a different result or a significantly higher payment.