In February 2004 I took out a loan for £5,000 with Direct Line. I was told that my credit history was poor therefore they would load the
interest rate. Furthermore I would be required to take out their PPI.
I needed the money quickly and had an acceptance from them so didn't look elsewhere. So how much do you think I'm paying?
The loan was £5000·00
The PPI was £1526·70
Total loan £6526·70
Interest was £3045·10
Total repayable £9571·80 at a flat rate of
interest of 18·287%. Earlier today I looked up the Bank of England base rate for February 2004 and it was 4% !!!
I defaulted on the loan earlier in the year and now have a
County Court judgement against me with an order to pay the arears plus costs which total £9K+. Despite having paid almost £2·5K in monthly charges before default.
I am trying to get the judgement
set aside because I believe clause 8 of my loan agreement (is an unfair clause under the current consumer legislation) states that I have to pay the full outstanding amount plus charges and costs in the event of a default. This in effect represents a penalty charge which is unrecoverable in common law.
My questions are, and I'm sorry it took so long to get to them, are;
- Do I have a case for mis-selling against Direct Line as they charged me so much interest at the time that interest rates were low?
- Did they mis sell the PPI that they insisted I took from them beacause it was so much more expensive than a company called "Security First" who's current rates are £2·15 per £100 of monthly premium. Meaning their total charge for PPI would have been closer to £200 compared to Direct Line's £1526?
- Surely these Companies have a duty of care towards their customers and this company failed to excercise its duty of care when dealing with me?
I would welcome the thoughts and advice of fellow members, thank you.
Royal Bank of Scotland - PPI and Horendous interset rate 
