Unfair commission on PPI

There was never any reason to go through a 3rd party to claim back your PPI payments, most banks/loan companies have their own systems for paying out which is as simple as filling out a form (that is for the benefit of anyone who reads this and is considering reclaiming PPI).

You are correct, the amount of PPI you have reclaimed is only that which you have paid, the rest wasn't deducted from your loan, merely cancelled so they are 'entitled' to 25% of your refund, not the total PPI amount.

You will however, have to read their paperwork carefully, most of these 'claims companies' are worse than the companies they are claiming off, it may also be worth checking that they are trading legally, they need to be authorised by the Ministry of Justice

They are entitled to it because you had an overdue balance that was settled as part of their claims process- seems harsh but if your account had a zero balance a full refund would be due to yourself- of which they would still have the legal entitlement of 25% too. Sorry

Most of the template letters for reclaiming your PPI are on the money saving expert site don't use a third party firm to reclaim this, they'll take at least 25% of money which is already yours.