## PPI Redress Calculations

Back in 2010 when the PPI story was still developing, the Financial Services Authority released some rules which told all financial firms how they must perform PPI calculations. These rules were called PS10/12.

Our calculators perform pure PS10/12 calculations. They do not use any assumptions about how you may have behaved differently if the PPI had not been there. However, we should also say that they are not intended to be a definitive answer to the true value of your claim because sometimes, assumptions and changes from the formula can be fair and reasonable! So how do we know what is right and wrong? The simple fact is that there is no right and wrong, there is just fair and unfair.

If our calculators provide you with a result that is very different to what you expect or have received from a firm - we think it is fair for you to make a polite query to the firm to ask them about the way in which they calculated your refund. After all, if they have applied any assumptions or used their own discretion when doing their sums, we think they should be explaining this to you properly - not just doing it without telling you. Then you can decide whether to either seek help from the Free Financial Ombudsman Service or from a firm like ours (for which we charge a fee because that is how we make our living and put food on our tables). The most important thing is that you can make your own informed decision!

If you need any help or would prefer to hand this job over to us to work on your behalf - please call us FREE on the number shown above or enter your details into our contact form on the home page. We know this can get complicated, so if you want to call for help at any point, you know where we are!

LOANS

1. We take the amount of PPI you enter (or that is estimated based on the loan amount) and apply the interest rate.

2. We work out what the monthly payment would have been for just the PPI on its own with interest applied.

3. We apply 8% pa statutory interest to each individual monthly payment you made based on how many days old that payment is. For any periods before 1st April 1993, we apply 15% pa to the payment.

4. For the date range of your loan, we add up the amount of PPI, the amount of account interest and the amount of statutory interest.

This is the value of your claim.

Please note that not all loan PPI was added to the amount borrowed to increase the interest amount.

Some PPI may have been charged on a monthly basis which means that no account interest would have been applied.

MORTGAGES

1. We take the monthly amount of PPI you enter (or that is estimated based on the monthly mortgage payment).

2. We apply 8% pa statutory interest to each monthly PPI payment you made based on how many days old that payment is. For any periods before 1st April 1993, we apply 15% pa to the payment.

3. For the date range of your mortgage, we add up the amount of PPI and the amount of statutory interest.

This is the value of your claim.

Please note that mortgage PPI does not typically have any account interest because it is generally applied as a percentage of the

monthly mortgage payment rather than being added in advance to the loan as a lump sum.

CARDS

1. We take the monthly cost of PPI you enter (or that is estimated based on a typical cost of £1 per £100 statement balance each month) and apply the interest rate of the card.

2. We work out what the monthly cost would have been for just the PPI on its own with interest applied.

3. Then we do the same for the next month but when we calculate the interest for the next month, we add in the PPI and interest from the prior month as well. This is called compounding and is the way that you are charged when you do not pay off your card in full.

4. We continue to compound all the monthly payments with interest that you made. If, at any point, the running total of the PPI and interest exceeds the balance on the card, this means that your card would have been in credit had it not been for the addition of PPI.

5. For any periods where your card would have been in credit, we add statutory interest to the credit amount for that month based on when it occurred. 8% pa if after 1st April 1993 or 15% pa if before.

6. If your card was paid off or closed before present, we take the amount of PPI, the amount of interest and the amount of any statutory interest on credit periods to that point and apply the prevailing rate of statutory interest to present.

7. For the date range of your card, we add up the amount of PPI, the amount of interest and the amount of all statutory interest.

This is the value of your claim.

Please note that calculations can be affected by other variable factors which we are unable to consider without detailed records of your account.

- if you incurred over-limit fees

- if you made cash withdrawals

- if you repaid your balance in full at any point

- if you missed payments and PPI was cancelled