Cahoot doubling interest rate?

[clara]

First - my apologies if this isn't relevant on this forum, I understand if it is closed but I think it might be of interest to other cahoot customers. Just recieved this email

Originally Posted by cahoot

We have decided to make changes to the rates we charge on the cahoot Flexible
Loan, following a review of competitor rates and increases in the cost of
lending. The interest rate will rise in two steps, a small change on 6 December
and the main change on 19 December.
From 6 December your rate will change to 9.4% APR and on 19 December your
rate will change to 14.9% APR variable.

Abbey has a
fixed rate loan only and this is available to cahoot customers at a typical rate of
5.8% APR*.

Now, having lost my job in the past year and had a few financial problems to face as a result - my credit rating could be better and i had no intention of applying for more credit until I had kept a clean sheet for a while - I would be unlikely to be accepted and dont want any superfluous credit searches against my name - I will be clear in a year.

Abbey are obviously using this as a way to ditch "problem" customers - any bright ideas?

C

[MarkyT]

They have done exactly the same to me. Just logged into my email and saw this from them. Being in financial difficulty is hard enough without them slapping this on me.
I find it interesting that I got this email yesterday - a week after I wrote to them asking for my list of charges.

[Bookworm]

What's the current rate?

[MarkyT]

Well to be fair, my rate isn't doubling but is at about 9% so the rise is fairly steep.
What about you clara?

EDIT: Just logged in to double check - currently at 9.1% and I noticed that they put the email on my online banking message system TODAY. This gives me 24hours notice of the first increase.
secure message from them as follows.

"5 Dec 2006
type: customer message Your cahoot flexible loan interest rate. We have sent you an important email about your cahoot flexible loan account. Your flexible loan account interest rate has changed to 9.4% APR variable with effect from 6 December 2006 and 14.9% APR variable from 19 December 2006.Details of the change have been sent to xxxxx.xxxxx@xxxxx.CO.UK. If you did not receive a copy of this email, please email us through the 'contact us' section of your personal homepage. Please also check that your contact details are up to date in 'change my details' section above."

[erathaf]

Originally Posted by clara

First - my apologies if this isn't relevant on this forum, I understand if it is closed but I think it might be of interest to other cahoot customers. Just recieved this email



Now, having lost my job in the past year and had a few financial problems to face as a result - my credit rating could be better and i had no intention of applying for more credit until I had kept a clean sheet for a while - I would be unlikely to be accepted and dont want any superfluous credit searches against my name - I will be clear in a year.

Abbey are obviously using this as a way to ditch "problem" customers - any bright ideas?

C

Hi

New to this site.

Also received the same message after I queried interest charges on my credit card.

I thought Cahoot terms and conditions stated that at least 30 days notice should be given of any change in interest rates. Or have I been given the wrong information?

Does anyone know a way to challenge this huge increase in interest rate?

Regards

[clara]

Originally Posted by erathaf

Hi

New to this site.

Also received the same message after I queried interest charges on my credit card.

I thought Cahoot terms and conditions stated that at least 30 days notice should be given of any change in interest rates. Or have I been given the wrong information?

Does anyone know a way to challenge this huge increase in interest rate?

Regards

Financial Services Authority have regulations covering customers from, amongst other things:

not being given adequate notice about changes to a contract.
unexpected or excessive charges

I wrote to cahoot about this, and to the FSA about it. I suggest you all do the same!

[zylch]

Hi,

I received the same email on 4th December.

Cahoot's General Conditions 13.4 states:
"We will notify you in writing within 30 days of any change in interest rates. We will give you at least 30 days prior personal notice of any change in our day to day charges."

I believe this goes against their terms. Have Cahoot replied to you about this?

[TFD]

Irrespective of notice, it's pretty disgusting to increase interest rates like this. I owe Cahoot £22,000 on flexible loans (one in my name, one in my mums). An increase from 7%ish on one and 8%ish on the other to 15% is going to cost something like £1500 a year extra!

Making this decision despite managing both loan accounts impeccably is disgusting - my credit rating is shot to pieces due to reasons outside of my control, so I have no opportunity to restructure it.

When I go on my nervous-breakdown killing spree, I'll make sure I take out whichever director at cahoot is responsible for this.

[erathaf]

Hi All

Wrote to the FSA. They said they do not become involved in the day to day running of banks, however, they state:

The Regulation of Banks and Building Socities
The regulation of banks and buildings societies essentially falls into two categories; day-to-day activities and high level regulation.

Some examples of day-to-day activities would be; cheque clearing, bank charges or the closure of bank accounts.

The day-to-day issues are covered by the Banking code which is a voluntary code setting out the minimum standards of service that customers can expect from all banks and building societies.
Section 5.3 of the banking code states that if the bank makes changes to its charges or introduces new ones they will give 30 days notice."

Next Steps
If Cahoot has not given you the correct amount of notification time for the increase in charges and interest rate according to the banking code and your terms and conditions you may have grounds for complaint. If you wish to make a complaint about Cahoot, you should complain to the firm in the first instance to give them an opportunity to investigage your complaint and, if appropriate, put things right. If you are unable to resolve your complaint with the firm, you may be able to refer the matter to the independent Financial Ombudsman Service.

All this information can be obtained on line from Banking Code Standards Board.

Trust this if of some help.

I have today written to Cahoot asking them to investigate my complaint.

Regards

[confusedme]

Yes, mine also up by 58% with 15 days notice.

I am fortunate to have a clean credit record, but am self-employed so no "headline" interest rate offers available.

Clearly it would appear 30 days notice should have been given, the reply from Abbey to my complaint just said that they had given 1 month notice, even though they hadn't.

Peterborough Trading Standards have my complaint on file awaiting any others (only if you're local though - otherwise contact you own local office)

OFT are forwarding complaints to their relevant department - they cannot act for individuals but may likely investigate if enough complain with full detail of any alleged short-notice. Here is the email address:

'enquiries@oft.gsi.gov.uk '

[ladybird17]

Did you just complain to Cahoot - or did you ask for some recompense? Have you heard from them? I am about to complain about the same thing - just wondered what I could expect from them.

[ian cognito]

I had this e-mail too but to be honest didn't notice the period of notice given, I'll have to see if i still have it.

One thing that did strike me was the it said 'Cahot are no longer providin g loans" which made me wonder if it wasn't financially viable and they were also trying to offload existing customers?

[confusedme]

If you dig out the terms you will find it says 7 days notice for interest, 30 days for charges.

Not sure if this had been changed at some point, I'm sure it originaly said 30 days.

The initial change is only 2 days notice so maybe some mileage there.

They showed no interest (sic) and have happily closed my account, missing out on £7k worth of new business for a nearly new CR-V without so much as a 'phone call or letter despite my 100% record.

They seem to have made some bad lending decisions, and are not botherering to sort the wheat from the chaf, so we are all expected to sufer for their incompetence.

Vote with your feet - and complain as load as you can to the OFT about the short notice and vast rate increase at a time of year when you had no time to do anything about it.

Their PR department is presumably as effective as B.A.'s!!

[erathaf]

Originally Posted by ladybird17

Did you just complain to Cahoot - or did you ask for some recompense? Have you heard from them? I am about to complain about the same thing - just wondered what I could expect from them.

Hi

I sent numerous emails - every reply came from a different member of the Cahoot team. In the end I sent a complaint to the manager. His reply made no sense. I then sent a letter by post. Herewith copy of reply. I will be taking the matter up with Abbey (2nd stage). Do not write to Abbey first as they will not reply. Interestingly, I also have a credit card with Cahoot. I have been given 30 days notice that there will be an increase in the interest rates.

I will keep you posted of results and will certainly be seeking recompense.

Regards

Dear *****,

Thank you for your letter dated 28th December 2006. I have taken ownership of your particular case in order to provide a response to the issues you have raised.

In the first instance, I would like to reassure you that the changes which have been made to your accounts are not unique to yourself and are changes which have affected all cahoot customers. These changes are not made in response to the queries you have made and any query you make regarding your account is not used to determine any prospective changes to the manner in which your account is operated.

The cahoot terms and conditions state that we will notify you of any changes to the interest rate within 30 days of the change. This means we can send notification up to 30 days before the change in rates or up to 30 days after the change in rates. When we make a change to the operation of your account we also provide information upon why the change has been made to that you are kept informed upon the operation of the account and why the features of the account have changed. Our policy is inline with the Banking Code.

I would be grateful if you could provide examples of interest being applied to your account when the balance has been cleared within 6 weeks of your transactions being completed so I may investigate this in further detail.

Please be assured I have carried out a full investigation for you and I hope you feel I have offered a fair response to all of the issues you've raised. I will keep your file open for the next 8 weeks and if I don't hear from you within that time, I will assume that everything is resolved and will close your file. If you remain dissatisfied though you can find details of how to take your complaint further within Abbey at http://www.cahoot.com/legal/legal.html#importantInfo under the heading 'Complaints policy'. The complaints policy also explains your ultimate right to refer your complaint to the Financial Ombudsman Service.

Kind Regards

Andrew Starling
Service Relationship Manager

[ladybird17]

On the T&C's I've got it says "change the interest rates on any cahoot account we will give you at least 7 days prior notice". Also they reduced by loan limit back in July to exactly the amount that was outstanding. When I looked up the T&C's for this it has a catch-all clause that they can reduce the limit "for any valid reason". I have never ever missed a payment & they have always been made by DD so never late. So I have also asked in my letter to them what the "valid reason" was for reducing my limit. Keep you posted.