Why can't I claim back the PPI on my loan, and how is it that my late payment fees are accruing daily interest?

By TONY HAZELL FOR THE DAILY MAIL

Updated: 05:37 EST, 1 August 2012

I took out a ten-year loan with GE Money in July 2004 to have my kitchen done. This came with payment protection insurance. 

The PPI lasted for five years. I have since tried to reclaim this without success.

Some years ago, I made a few late payments. Then I discovered the fees I had been charged for these were accruing daily interest. This seems ridiculous.

Why can't I claim back the PPI on the ten year loan I took out to re-do my kitchen?

I have been paying back £120 a month over seven years and still owe £3,514 on this loan. Could you investigate? S. W., Birmingham. 

I’ve got good news and bad news. Let’s get the bad out of the way: your loan was sold to you by a company called Living Design. The company is with the same group as Anglian Home Improvements, but has been dormant since 2005.

Living Design was not regulated by the Financial Services Authority when the loan and PPI were sold to you. This means you fall into a nasty black hole and will not be able to reclaim the PPI premiums.

For the record, Anglian says ‘inclusion of PPI was always an option and not mandatory when considering taking out a finance agreement to purchase products’.

Now on to the loan itself. You originally borrowed £6,450.18.  As you say, you missed a number of payments.

Each of these triggered a £25 fee. And, as you now realise, interest was also charged on this money because it was added to your loan.

GE Money says it applied these charges correctly — and I can see no evidence to the contrary.

However, as a gesture of goodwill, it is removing £225 of charges from your account, plus the additional interest you were charged. Your balance was £2,964.59, but will now fall to around £2,700. If you carry on paying at the current rate, your loan should end in just over two years.

There are times when I despair over the slapdash way the financial industry behaves towards customers. GE Money wrote to you explaining the figures. However, I could not make head nor tail of them.

The letter said you had so far paid £10,969 and were due to pay an additional £3,121, making a total repaid of £16,279.

These figures do not add up. You might have thought GE would make every effort to get this right.

Your actual total repayment figure will be £14,090.

Incidentally, this was not the first time you had written to GE to query your loan. Previous questions you raised in 2009 and 2011 went without satisfactory responses.

So, on top of the money it has already offered, GE Money is giving you a further £200 for the distress and inconvenience it caused you.