Hi, the latest is i recieved an account statement which shows that the remainder of the money has been set off against the account. I called the bank today and they confirmed this was the case. I asked them for written confirmation of this and the return of my original discharge letter from my trust deed. I am now going to refer the matter to the FOS.

This is a topic which is ongoing at the moment. Rumour has it that it may be resolved and no off set will take place. However it is just rumour.

Its an interesting scenario if you look at this in Trust Deeds scenario. Hypothetically there are 10 creditors, 2 are RBS and all pay out PPI. RBS offsets the PPI against their Trust Deed debt and reduces the amount accordingly. The other 8 pay the Trustee for the general creditor pot, so RBS benefits from both the payments from all other creditors via an enhanced dividend and also the reduction of their own debt.

Deosn't seem fair somehow.

Mark

I have just spoken to the FOS on the phone and they seem to think the bank can off set. The bit i cant understand is if i have been discharged from the TD, then make a PPI claim, which i never thought for 1 minute i would get, then the bank admit they are wrong, make an interest payment, with more to follow. Then decide they will set off against the debt that they agreed to take a dividend payment of, that was completed and i was discharged from, so what was the point ofTrust Deed if the bank always has a claim against the debt, that i understood was written off at the end of the TD? Is that debt to hang over me for the rest of my life? CONFUSED DOT COM

Hi Kayak.

Since you've reported this I've actually heard this a number of times elsewhere in connection to PPI claims and IVAs or protected trust deeds.

A bank seems to be confident in the knowledge that they have the right to offset the PPI payments, but that they are obligated to pay out the interest on the premium.

It sounds as though, for you, FOS agree.

I've heard the legal arguments and it really is quite complex. I don't think I could articulate it very well I'm afraid.

Good Luck Kayak, they seem to be making it up as they go along.

Personally, it does seem odd to be 'discharged' and debt be written off but re-ignited because they need to refund to you for their misdemeanours. Surely if you are already discharged, keeping money that courts have decided is due to you is not proper.

I never took any PPI so don't expect an issue there but I have an unsecured element or 'top-up' loan with an NRAM mortgage. Apparently NRAM are now paying funds to customers with these top-ups (I don't pretend to now what the reason is)

I am in sequestration and anticipate the unsecured loan will fall away with the sequestration but it's not clear whether NRAM will similarly reduce the amount of the claim they notify or whether they will pay any compensation to the sequestration-seems unlikely though given how others are treating payments in PPI /pTDs.

Hi RBSB.

There is more about that NRAM issue, and what a trustee might seek to do, at:

(Article now removed from website)

TDA - Thanks, I knew I'd read some info previously.
It does seem they are most likely to reduce the size of their claim for an active trust deed or sequestration, I hadn't thought about it much because I didn't really feel any grievance over the loan and I'm not sure what the root of the issue is.

But for those who come up against it after discharge, it seems odd that the penalty payout is then effectively 'credited' to the penalised party or lender.

I agree with other comments around fairness to other lenders/debtors who stand to gain from an increased pot if the don't simply set-off.

I am very glad not to be in those circular arguements!

I'm not sure that the arguments about this NRAM situation and PPI will be the same necessarily RBSB.

The thing to understand about PPI is that it is a constantly developing picture. Until certain things get tested in court there will likely be inconsistency and confusion.

I think that is what i will have to do FOS seemed confused about it,and the woman i spoke to did not know what a TD was??

I also contacted a no-win no fee company who would not touch it with a barge poll.
I would be interested if there are any similar cases going on, i think mine will be one LOL

The similarities are around the claim size being reduced where it is already in a pTD or Sequestration and what happens afterwards (post discharge)

For me, I've assumed until recently that they would pay over any amount to the trustee but from the link there that seems not to be expected?

Similar questions for debtors mainly seem to be post pTD or sequestration, whether or not there will be payments due to the debtor or retrospectively held against prior debt.

I look at it like: lend me £10, i cn only give you £5 back is that ok? Yes no problem. 3 years later i meet you, can i have that fiver you owe me?, but you said i did not need to pay it back, tough i want it??

It's a perfectly sound argument Kayak.

Having said that, what would your view be if you were the creditor in this instance? Would you willingly hand back the PPI premiums to someone for whom you'd recently written off an amount of debt?

I'm not taking the banks position, but I think it's quite easy to see why they'd try to avoid repaying the PPI if they have (what they believe to be) a sound legal basis for doing so?

They had a sound legal basis to sell the PPI? They had a sound legal basis to force me into administration and not allow my repayment terms, which if i had not been mis-sold i would never have the debt. I am the one who cant get credit now, i am the one whohas had to suffer the shame of my name being dragged through the courts and printed in the press for all to see for hundreds of years to come. I can see your point and i understand the banks take on it, but look around the world, look at the mess it is in because of banks, time they had their cake and not eating it!!

Also, should the bank not declare these funds to the trustee and the money split between the creditors and not just the bank??Even though like me the trustee has been discharged???

I see why the banks think they should have it back, they missed out on being repaid what was agreed. However, due process being completed, ie pTD done and dusted, the PPI payout only arising from what has been judged by regulators to have been mis-selling, it seems really difficult to justify banks taking it back from the people who are seen to have lost in the first place due to their actions and aggressive sales. There is the whole issue Kayak suggested of the banks implication for some in the trust deed or sequestration being needed.