This is a story of a successful MBNA PPI claim on a credit card. I took out a credit card with Abbey National in the late 1990’s. In around 2001 the management of Abbey National credit cards was taken over by MBNA, although for a time the credit card statements still carried the new Abbey branding. When Abbey was bought by Santander, the credit card statements came bearing the MBNA branding, as Santander wanted to start selling their own branded credit cards.But enough background..
It was in early 2012 that I first started hearing a lot more about PPI claims. I had been somewhat aware of the news stories about mis-selling of PPI before this but I had never really thought about it and made the connection with my credit card.
Every month there would generally be two charges on my credit card statement, one for any interest accrued and one for Abbey National PPI. The charge for PPI was calculated as a percentage of the highest balance during the month.
Over the years, this credit card was used for absolutely everything. It was for everyday use, so everything went on it, groceries, petrol, online and in-store shopping, holidays, basically everything a typical household would spend money on. The balance on it varied wildly, depending on circumstances. There were a few periods when it would be cleared every month, but more often than not, there was always some balance left on it. And for a long time I am very sorry to say that there were several thousand pounds outstanding on it. I always made payments on it every month, but due to changing family circumstances, the balance was rarely zero.
The result of this was that the interest charges were quite high every month, but there was also a large PPI charge every month.
In the last couple of years, I have got my finances sorted out and all outstanding balances paid off. It was only recently that I was looking back and started to think were all these PPI payments really necessary, because I must have paid a fortune over the years. It’s strange that I didn’t really think of these things earlier, but when you are in a form of financial stress, where the household income is regularly not meeting the household expenditure, you tend to have what seem like more important things to worry about. I’m not making excuses about my earlier situation, but sometimes you feel that you can only cut back on expenditure so far. I fully accept that bigger cuts could have been made, but you also try to maintain a certain standard of living, whether you can afford it or not. But I digress…
I started doing some investigation on the internet (where else!) and found that I could well have a valid claim for PPI misselling and the potential for a refund.
But who do I contact? Abbey National don’t exist anymore, at least not in their old form. They became Abbey, which was then bought over by Santander. Would they have any record of an old credit card sold in the 90’s? I wasn’t sure. MBNA were the current management company for the credit card, and the ones that were receiving the recent PPI payments, so I thought they would be the best place to start.
Important: One thing I came across on the internet, whether it’s correct or not, was that these companies might take a dim view of a PPI claim if you still have PPI on your credit card, and are still happily paying for PPI. So the first thing I did was phone up MBNA customer services and I asked them to cancel the PPI on my credit card. This was a very simple phonecall and they went ahead and cancelled the PPI.
Having decided that I was going to make a PPI claim against MBNA, I looked on their website for how to do it. Their website was actually very helpful in this regard, they had a whole series of pages dedicated to PPI and how to make a claim. It even included a link to the PPI Claim Form, a generic form agreed upon by a number of lenders which simplifies the whole process of making a PPI claim by having one standard form that most financial institutions should accept.
Important: There are a lot of companies out there offering to make PPI claims on your behalf. Some of these are reputable companies, other are not. But all of them will eventually take a fee from you, in some cases they will even take a fee before you know if your PPI claim will be successful or not. While some people might want to make use of these companies, you are perfectly entitled to make a PPI claim yourself. In fact it is much simpler to do it yourself. All you have to do it fill in the form and send it off to the correct address. And you don’t have to pay a fee to anyone, whether your claim is successful or not. So my advice would be to cut out the middle man and just put in the claim yourself.
So I downloaded the PPI Claim Form and filled it in. If you are doing this, take your time and fill in every possible detail that you can, because this form will then become the basis on which your claim will be allowed or not. So look back through your statements and any associated documents or credit agreements if you have them.
Ultimately, the financial company will say yes or no to your claim. If they say no, it’s not going to affect your future credit or anything like that. And you can even appeal it to the relevant authority if you think you have a good enough case. But if you take your time and fill in the form as best as you can, and you have a valid reason for claiming, they might say yes, in which case there could be a refund cheque on it’s way to you in the near future.
There are a lot of different reasons that can be used for making a PPI claim. These are available on various sites on the internet, but here’s a link to the most successfully used reasons for making a PPI claim.
The reasons I used for making my Abbey National / MBNA PPI claim were;
– From what I remember about when the card was taken out in the late 90’s, it was my belief that having their Payment Protection Insurance was a condition of being allowed to take out the card. And that continuing to have and pay for PPI was a condition of continued ownership of the credit card. I know now that PPI is not a requirement of continued ownership of the card, and as mentioned above I had cancelled the PPI.
– At the time I took out the card, I was employed by a company that would have provided me with an income, for a few months, if I were to become long-term sick and unable to work. This income could have been used to meet payments on the credit card, so this was effectively the same thing as a Payment Protection Insurance. On my claim form I said that this was not taken into account by the lender at the time the PPI was sold to me. In other words, if this had been taken into account, I would not have needed to take out and pay years of premiums for an extra insurance that I was already covered for with my employer free of charge. I did not have written proof of this employer’s scheme as the relevant documents were probably thrown out years ago, but it was true nonetheless.
I sent off my PPI claim form to MBNA PPI, hoping to get a response but thinking maybe they will just say no and that would be the end of it.
What happened was that I received a response from MBNA after about three weeks acknowledging receipt of my claim form. The very next day, I received the following letter from MBNA.
Thank you for the complaint regarding the Payment Protection Insurance (PPI) on the above account.
Following a review of your complaint I have found that MBNA acquired your account from Abbey and that the sale of PPI was made by them prior to MBNA becoming your service provider. When your account was transferred to MBNA, new PPI policy terms and conditions were issued to you and you were given the opportunity to cancel your policy, should the new terms and conditions not meet your requirements. However, as a gesture of goodwill, I will arrange for a refund of the premiums and associated interest that have been charged by MBNA since the date of transfer to be made.
We will now be taking steps to calculate the correct refund that is due and will contact you again within the next 12 weeks to confirm the details of the payment. A payment will be sent to you and this amount will be in full and final settlement of your complaint. You will receive this refund in the next 12 weeks.
In order to calculate your refund we will worked out how your balance over time would have changed if you had made the same monthly payments without PPI. Therefore:
– We will notionally reconstruct your statement balances by removing the PPI premiums and associated interest. This will include interest arising because the ongoing monthly balance on your account was higher that it would have been if you had made the same payments without PPI;
– If there is any statement period where, after deducting your premiums and associated interest, your balance would have gone into credit, we will add 8% simple interest for that statement period. If there is no statement period during which your balance would have gone into credit, you will not receive any 8% interest.
Please note that the approach outlined above follows the refund guidelines set out by the Financial Services Authority.
We are forwarding your complaint to your previous lender so that they can consider it in relation to premiums charged prior to your account transferring to MBNA. They will contact you directly in due course.
If Payment Protection Insurance is still active on your account, I have arranged for it to be cancelled with immediate effect. Please note that you are no longer covered by the policy.
This is our final response to your complaint. If you remain dissatisfied you now have the right to refer your complaint to the Financial Ombudsman, which you must do within 6 months of the date you receive your redress payment. For more information about how to do this, please read the enclosed Financial Ombudsman’s leaflet. Their address is as follows:
Financial Ombudsman Service
Customer Contact Division
South Quay Plaza
183 Marsh Wall
Yours sincerely, . . .
In short, they were agreeing to refund all PPI payments made while the credit card was managed by MBNA, with interest if it’s applicable. And they were going to forward my claim to whoever looks after PPI claims on behalf of the old Abbey National to consider the period before the transfer of my card to MBNA.
It was mid 2012 when this article was written and my PPI claim was successfully handled by MBNA. MBNA had mentioned at the time that they would pass this on to Abbey National / Santander, but I didn’t hear anything back from themand eventually I forgot all about it.
It is now early 2014 and out of the blue I have received a letter from Santander saying that MBNA have passed on the detail of my PPI claim. Strange that it has taken over 18 months for this to happen, but better late than never!