HSBC loan ppi

[Emu2005]

Hi, my sister took out a loan with HSBC a few years ago as they were her current bank (unfortunately she didn't shop around). They persuaded her to take out PPI, which on the loan of �8,000 was �1,500. She now realises she doesn't need this, but when she rang them to get it taken off, they said they would have to give her a new loan without ppi for the remaining term, which ended up with higher repayments than what she has now. It seems very wrong that she can't now remove the PPI and save herself money, and also I think there could have been some mis-selling by them advising the PPI. I'm clutching at straws a bit, but was wondering if anyone had had similar experiences with their bank and if they have managed to do anything about it? Thanks.

[johnlambert]

There is a firm called conkers who specialise in reclaiming these monies
good luck

[bednobs]

if she was unemployed or ill, i expect she would expect the ppi to pay out, wouldnt she

[Oneeyedvic]

From the conkers website: http://www.conkers.co.uk/privacy.aspx

5.1 In the event the Company takes steps to recover any Service Charges and/or Administration Charges due and unpaid by the Client to the Company, the Client shall pay to the Company the Company's costs (including administrative costs) of taking such steps plus VAT on those costs and in addition the Client undertakes that it will at all times be responsible for all costs and expenses incurred by the Company, including but not limited to, Court fees, interest and administrative fees in recovering from the Client any Service Charges due and unpaid from the Client to the Company.

7.3 When an offer for Compensation is obtained from the Third Party on behalf of the Client which in the reasonable opinion of the Company is fair and reasonable and that offer is rejected by the Client then the Company reserves the right to charge a fee equal to the amount of the Service Charge which would have been payable in the event that the Client accepted that offer in line with the Company�s advice.

[Emu2005]

Thanks johnlambert and oneeyedvic, it looks like there are a few of these companies around so think i'll give one of them a ring and see if they think they can help.

bednobs - not really a helpful input, and if you'd bothered to read my full post you'd see I was querying not just the ppi itself, but the fact that she can't now get out of paying it for the remainder of the term on the loan which seems pretty unfair to me.

[bednobs]

but my input is helpful .... i cant see why anyone would expect to get out of paying ppi if they had agreed to it. Your sister wants to change the contract, so the old contract has to be voided and a new one begun, you cant just add and take away bits as you chose. i would imagine that they were able to give her a better interest rate on the first loan because 1)interset rates have gone up recently and
2) they can be sure they will get the money back because the loan is "insured" with ppi which is probably why it seems more expensive now.
You mention being "missold" the ppi - did they promise it would do something it hasn't done? You say they Advised her to take out the ppi but i presume she had a free choice. And as i said, all this time she would have expected it to pay out had she fulfilled the conditions attached to it
i feel my answer is helpful because to be honest, I think you are clutching at straws too, and will be disappointed when you have to pay a company for advice

[annie0000]

there are rules and regulations surrounding the sale of ppi - a lot of people were sold these policies unfairly, there are also people who now regret taking it out cause it has cost them more and just want their money back now that they haven't had to use it. Presuming that your sister falls into the first category, i would complaint to the company itself - especially if she has no dependants or if affordability was an issue. I would avoid using a third party firm. The company i who sold the policy is obliged to investigate the complaint in the same way regardless of where the complaint comes from and many of these companies are not doing anything except taking a cut of your redress. Some are unregulated and companies will refuse to deal with them, so you could end up doing the complaint yourself yet still being tied into giving them a share of your compensation due to the agreement that you sign with them. I would recommend that your sister complains directly to the HSBC specifically saying that she feels that the policy was mis-sold for whatever reasons she has. Did they fully explain the charges, what paperwork did they provide etc.

[Oneeyedvic]

Just in case you didn't read into my answer - I should point out that I would not touch a company like conkers with a barge pole - their terms and conditions state that they can charge you regardless. Not a very nice t&c.

I am curious as to why she thinks she doesn't (or indeed didn't) need the insurance? If she was missold the insurance (as an example she had a separate insurance cover out already or she was self employed) then that (as pointed out above) is a seperate issue.

If she has simply changed her mind, then (unfortunately) she has signed a legally binding contract.

[EverClean]

Most of tese policies (and indeed it looks like this one) are sold as a single premium, added to the loan and then interest charged on it. Often they only last 3 or 4 years, even thought he loan may be taken out for longer. If the period of cover has passed then I don't think that there's a lot that can be done about it. However if there is a complaint made against the seller (HSBC) then it is down to HSBC to prove they gave the right advice and not down to your sister to prove they gave the wrong advice.

This applies to PPI policies taken out after these were regulated by the FSA (Jan 2005.) I'm unsure of the status before this date. However all complaints should be made in writing to the bank in the first instance and they should send you details of their complaints procedure and outline the next steps and the timescales in which matters are to take place.

You'll get as much joy out of doing it this way as you would by paying a cowboy company. If they are going to get paid by you no matter what the outcome is then they have no vested interest in getting you a payout.