Example A: All compensation is "cash in hand" |
Example B: Compensation includes "cash in hand" award with loan and future instalment reduction |
Example C: Compensation is used to offset arrears consumer has on credit card or loan |
Total compensation: | £3000 | Total compensation: | £3000 | Total compensation: | £3000 |
| | | Loan reduction | £2000 | Loan reduction | £3000 |
| Of which cash is | £3000 | Of which cash is | £1000 | Of which cash is | £0 |
Fee charged at 10% | £300 | Fee charged at 10% | £300 | Fee charged at 10% | £300 |
| VAT @ 20% | £60 | VAT @ 20% | £60 | VAT @ 20% | £60 |
| Total Fee | £360 | Total Fee | £360 | Total Fee | £360 |
Consumer receives | £2640 | Consumer receives | £640 | Consumer pays | £360 |
| (and no reduction in loan as it is already paid off in full) |
(and a reduction of £2000 in future loan instalments) |
(and a reduction of £3000 in their outstanding loan) |