Charge for DD non payment.

[tom a]

I have a caravan insured with a company called Park Home Insurance Services Ltd.
I pay the premium monthly to a company called Close Premium Finance.
Unfortunately I had to cancel Octobers DD to stop me going overdrawn and today I received a letter from Close Premium Finance advising me they had not received the October payment and charging me £30 administration expenses. They are saying I must pay this on top of the monthly payment to continue my insurance.
They quote section 87(1) of the consumer credit act 1974.
Have they a right to demand this £30 charge or is it another rip off worth fighting?
Thanks in advance.

[tom a]

Any advice please.

[tom a]

Had a reply from email I sent them offering as a good will gesture to remove half the default charge.
Any help please?

[TheChancellor]

Originally Posted by tom a

Had a reply from email I sent them offering as a good will gesture to remove half the default charge.
Any help please?

Sounds iffy.That section applies to Default Notices.

Can you post what they have sent you after removing personal details.

[Conniff]

That just goes to show that it didn't cost £30 in admin costs as they are not going to lose money. It shows that these companies just pick a figure out of the air that they think they can get away with.

Can't you pay direct to Park Home instead of going through this broker?

[tom a]

Don't have a scanner so will type what they say.

Dear Sir/Madam
Re: Insurance premium - Close Premium Finance Acc No: *******

We are writing in relation to an overdue payment on the above agreement.
Your bank have returnrd your direct debit unpaid with the reason ' Instruction cancelled by Payer'.
You are therefore in arrears and have until 20 October 2008 to pay the sum of £70.55.
This includes a charge of £30.00 to cover our administrative expenses.
As your account falls within section 87(1) of the Consumer Credit Act 1974, we are obliged to send the Notice of Default attached.

I then have a notice of default as follows:-

We are writing in relation to your obligations under clause 3 of the Agreement dated 28 February 2008 to make minimum monthly payments to Close Brothers Limited in order to repay ammounts outstanding under the Agreement. We have not received your payment for 02 October 2008. This is now overdue and your failure to pay is in breach of the Agreement.

You have until 20 October 2008 to remedy this breach by the payment of all sums due and owing to Close Brothers Limited under the Agreement at that date, which will be £70.55. This includes a charge of £30.00 to cover our administration expenses.

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH.

IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE DATE SHOWN THEN THE FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU.

This Notice is served under section 87(1) of the Consumer Credit Act 1974 (the ACT), in relation to a Close Premium Finance running account credit agreement between Close Brothers Limited and yourself dated 28 February 2008 ( the Agreement).

We will terminate the Agreement and demand early payment of the balance on the account. We may enforce our security by cancelling your insurance policy as set out in the attached schedule, and applying any refund of the premium in satisfaction of your obligations under the Agreement.
You will remain liable for any shortfall on your account.



It then goes on to tell me to get advice if I'm not sure what to do.
Any advice please?

[oscar21]

I got a similar letter from them the other day (see nasty default notice) all be it for van insurance, they seem to be some sort of middle man company, and seem to be a bit of a bully. This is a copy of the reply I sent them, a bit over the top perhaps but I have learned to strike whilst I'm still angry and worry about what happens at a later date, if it happens.

To Whom It May Concern,
I am writing in reply to your ridiculous and over the top letter dated 7/10/08. I will explain the situation; I was in the process of changing banks over when my direct debit to you became due and I missed the payment date, however all my other payments to you have been on time and I believe this was the last one due for the policy. I would have thought that a simple reminder letter would have been more appropriate in the circumstances. I see your letter as a way to make a couple of extra pounds on the deal as I may renew elsewhere next year.
Well after your letter I definitely will be taking my business elsewhere next year and will be telling Quickfit the reason why. Furthermore I do not recognise your charge of £20 for what is no more than a letter reasonable, as statute law states that only reasonable costs and charges can be made in such circumstances. I also do not recognise the extra £5 for non direct debit charge to be valid either, therefore I am enclosing a cheque for the final amount of £31.76 and trust this will be the end of the matter. If you wish to pursue your spurious charges further I suggest the place is the county court and anymore threatening letters from you will be considered harassment and reported to the relevant authorities.

[TheChancellor]

"Borrowed" Courtesy of Scarlet Pimpernel - his reply to a recent thread:

"This is covered under the OFT Guidance on Debt Collection, which states that the only fees that can be charged are those for which:

- there is specific contractual provision for such fees
- the contract states the amount of any such fees
- fees are based upon actual and necessary costs

I have yet to see any fee that a DCA has tried to add to a debt that meets these criteria. In addition, it may well be that this action is contrary to CPUTR 2008."

Followed by his letter:


Quote:
Dear Sirs

I refer to your letter of (date).

Your attention is drawn to the Office of Fair Trading Guidance on Debt Collection, which is clear that any such fee must meet specific criteria. I therefore require you to provide evidence that your 'administration fee' meets the criteria.

I suggest that the best way for this to be achieved is by way of an original credit agreement, and you should treat this letter as a formal request pursuant to s. 77/78(1) of the Consumer Credit Act 1974. I enclose a postal order in the sum of £1.00 which represents the statutory fee, and which is not to be used for any other purpose. You have 12 working days to comply.

Yours etc.

tom a


The only mention I can see for DN's refer to missing payments (plural).

I don't think they are allowed to issue after such a short period of arrears.

The DN sounds dodgy as well.There are set terms.
Does it begin:

IMPORTANT-YOU SHOULD READ THIS CAREFULLY

p.s. I would send October's payment with your extra pound.

[tom a]

Thanks for your replies.
The DN starts with

IMPORTANT - PLEASE READ THIS CAREFULLY

[tom a]

Sent them an email yesterday asking if the charge was for administration or Default notice.
Got this reply today.

"Thank you for your e-mail. I can confirm it is an administration charge as your account has defaulted.

Please note I will not remove any further fees from your account.

Kind regards"

Very abrupt it seems to me.
The only thing I'm concerned about is if I cause any trouble they may cancel my insurance.
What do you think?

[TheChancellor]

You need to see a copy of your agreement.

[tom a]

Dug my agreement out and October was my last payment.
They can whistle for the charge fee.
Thinking of sending them a letter with my final payment along the lines of oscar21 (post 7).
What do you think?
Thanks

[TheChancellor]

Originally Posted by tom a

Dug my agreement out and October was my last payment.
They can whistle for the charge fee.
Thinking of sending them a letter with my final payment along the lines of oscar21 (post 7).
What do you think?
Thanks

Well that makes life much simpler.When they ever get a tea-girl with any brains they might stop flying of the handle & not lose so many customers.


Never mind Oscar21.Personally I'd tell them to "Foxtrot Oscar" & save the ink.

[tom a]

Thanks for all your help. I'll send them final payment and tell them where to go for the charges.