PPI Claim After Scottish Trust Deed

It’s hard to ignore the clamour surrounding PPI claims at the moment. Many lenders behaved very poorly in the way that they sold payment protection insurance and are now having to face up to the consequences. In this trust deed forum blog we look at the subject from the perspective of a person that has already completed their trust deed.

If your trust deed has come to an end recently, or it will do so soon, you may have already been asked by your trust deed provider to look into whether PPI claims should be initiated to help raise extra funds to help repay your creditors. If this has happened you’ll obviously probably be unable to make further claims on the same accounts. Not every trust deed firm is (or was) asking all of their clients to make PPI claims during their trust deed. If this is true for you, it may well be of interest as to whether you’ll be able to start PPI claims yourself and potentially benefit if you win your case(s).

Our sister website, IVA Advice Forum, recently included interesting information provided by Mike Sloper of RSM Tenon. Mike is an insolvency practitioner handling IVA cases which are, in many ways, similar to a Scottish trust deed. He reported on legal advice that his firm had obtained in connection to PPI claims after an IVA (which may well also apply to PPI claims after a trust deed) which you can read about in this thread and also in the IVA Blog on the same subject. In summary:

1. The fact that you have been in an IVA does not mean you cannot make a PPI claim.
2. PPI payments made prior to an IVA may be reclaimed.
3. Creditors should not offset against accounts where the debt has been written off after IVA completion.

If you are considering a PPI claim after your protected trust deed what does this mean in practice?

You have an established right to make a claim if you believe that payment protection insurance was mis-sold to you. If the bank agree to your claim, or if they are forced to deal with your claim by the Financial Ombudsman, you may receive a refund of the PPI plus some interest on the amount that you paid.

You may need to focus on exactly what PPI charges you have actually paid. This is important because it’s perfectly possible that you may not have actually paid for some of the PPI which you “purchased”. Where PPI was sold to you, but it wasn’t actually paid, it may have become a debt that was included in your trust deed. It’s not likely that you can reclaim PPI charges that you did not in fact pay for and which became trust deed creditors.

You may face some obstructions from those that mis-sold PPI to you if you make a claim after your Scottish trust deed has finished. They may offer reasons, or perhaps even legal arguments, as to why your trust deed means that they need not refund you. If this happens we would advise you to let them know that you will be handing the matter over to the Financial Ombudsman Service if a payment protection insurance payment is not forthcoming to you promptly. This may encourage them to reconsider the situation as each case that ends up with FOS costs them an £850 handling charge.

How about using a claims operator to handle your PPI reclaim after a trust deed? We’d suggest that you do not for a number of reasons. Firstly you’ll find that they expect a significant amount of any refund to go to them as fees (25% to 30% is common). Secondly the evidence is that individuals that make their own PPI claims enjoy similar levels of success as the “claims professionals”. You can get help on the process involved from a great many consumer websites which offer guides on this subject. Thirdly you may find that you get an invoice from the claims company without any payment from the claim. If the bank becomes obstructive about payment because of the trust deed, but has admitted mis-selling the PPI, a claims company may feel justified in sending you a bill.

A final thought on the subject of PPI claims after a Scottish trust deed is the importance of timing. You may have completed your trust deed payments but not yet have been formally notified of discharge from your protected trust deed. Until you are discharged any PPI payment is likely to be seen as “acquirenda” which you’d need to pay into the trust deed rather than keep yourself. You may need to be patient about the discharge process because some of those that mis-sold PPI are now settling claims very quickly and efficiently.