Patricia Pearl - Small Claims Procedure - A Practical Guide


An excellent guide for the layperson in how to use the County Court - a must if you are intending to start a claim.

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  1. #1
    Basic Account Holder SharpmanTF1 Novitiate SharpmanTF1's Avatar

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    Default Consumer Credit (rebates on early settlement) regulations

    Hi,
    Took out a loan in Aug 2005.
    Have asked for early settlement figure.
    They've quoted consumer crediticon(Rebate on early settlement) regulations 1983..

    Does this loan fall under the 1983 regs? I think I read somewhere that loans prior to may 2005 were covered by 1983 regs.

    When do 2004 regs come into effect?

    What are the differences in the working out of settlement figures?

    1983 v 2004 regs which is better financialy for the consumer.

    hope that all makes sense .....:?

    Sharpman

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  2. #2
    Basic Account Holder ReasonableRon Novitiate ReasonableRon Novitiate

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    Default Re: Consumer Credit (rebates on early settlement) regulations

    The 2004 regs came into effect for credit agreements written after 31/5/2005.

    The differences in calculations are based on a requirement to move from the old and complicated Rule of 78 method to a new and even more complicated actuarial method.

    The bottom line is though that it is generally better for the customer, although I don't think there is that much in it.

    Search google for OFT801 for more information.

    HTH


  3. #3
    Basic Account Holder SharpmanTF1 Novitiate SharpmanTF1's Avatar

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    Question Re: Consumer Credit (rebates on early settlement) regulations

    Quote Originally Posted by ReasonableRon View Post
    The 2004 regs came into effect for credit agreements written after 31/5/2005.

    The differences in calculations are based on a requirement to move from the old and complicated Rule of 78 method to a new and even more complicated actuarial method.

    The bottom line is though that it is generally better for the customer, although I don't think there is that much in it.

    Search google for OFT801 for more information.

    HTH
    thanks for info.
    BTW the loan was for a figure of 33612.30 (including PPIicon)

    So, as this loan was taken out Aug 2005 it's covered by the 2004 regs.
    Do the company then have to use the 2004 regs to work out the settlement figure?

    another question.
    On my CCA in the Bit about early settlement it states that the figure would be worked out using formula set out in the CCA 1974. quote 'Not withstanding the fact that this agreement is not regulated by the act' unquote. What does this mean.

    Also i'm looking at the loan pack again.

    In the pack it states that the Settlement figure is calculated according to the 'consumer crediticon(Early Rettlement) Regulations 2004.

    On the Loan greement it quotes Consumer Credit Act 1974 for figure calculations.

    On a recent Settlement Figure quote:
    The Rebate allowed has been calculated in accordance with the 'Consumer credit(Rebate on Early Settlement) regulations 1983.

    Ok, Now which one is legal? or are they all allowed to be used when the occasion suits them.

    Sharpman


  4. #4
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    Default Re: Consumer Credit (rebates on early settlement) regulations

    On loans taken out from 31/5/05 they must use the 2004 regulations to work out the settlement figure. A copy of the regs is here The consumer credit (Early Settlement) Regulations 2004 No. 1483


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    Default Re: Consumer Credit (rebates on early settlement) regulations

    The rule of 78 was abolished because it front loaded the interesticon and so if you made an early settlement you often found that you had a large amount of capital still to pay.


  6. #6
    Basic Account Holder SharpmanTF1 Novitiate SharpmanTF1's Avatar

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    Default Re: Consumer Credit (rebates on early settlement) regulations

    Quote Originally Posted by rory32 View Post
    On loans taken out from 31/5/05 they must use the 2004 regulations to work out the settlement figure. A copy of the regs is here The consumer credit (Early Settlement) Regulations 2004 No. 1483
    Hi,
    Ok, Does the 2004 regs regulate loans over 25000. I think CCA 74 only regulates loans for less than 25000 from what I can make out.

    If so, are there any strongly worded letters on here to enlighten Firstplus of the error of their ways.

    Sharpman


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    Default Re: Consumer Credit (rebates on early settlement) regulations

    Yes it would only regulate loans under 25000 unless it was consolidating credit that was already regulated by the Act.


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    Default Re: Consumer Credit (rebates on early settlement) regulations

    Quote Originally Posted by rory32 View Post
    The rule of 78 was abolished because it front loaded the interesticon and so if you made an early settlement you often found that you had a large amount of capital still to pay.
    so a doorstep lender could lend 100, load the interest making it 150 for arguments sake and start taking payment weekly, graduallly reducing down from 150? I am assuming this is what front loading means, if so, why are Provident doing this if it is was abolished?

    how do they work out early settlement since their int rate is about double!!

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    Default Re: Consumer Credit (rebates on early settlement) regulations

    well, could that calculation be any more complicated! are there any calculator tools that will do it for you?

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    Default Re: Consumer Credit (rebates on early settlement) regulations

    Quote Originally Posted by maybelline View Post
    well, could that calculation be any more complicated! are there any calculator tools that will do it for you?
    Info thread here

    http://www.consumeractiongroup.co.uk...alculator.html

    it's a calculator that is on the OFT website. It works out all sorts.

    Sharpman


  11. #11
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    Default Re: Consumer Credit (rebates on early settlement) regulations

    thanks

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