Hi there, new to the forums, but have been reading for a few weeks now. I just have a query concerning dealings with Paycheck Credit, which seems to be a front for the infamous company Toothfairy Finance.

I took out a loan for £400 with them in th elast two weeks, which will be due on Monday 2nd January. However, a few days after taking the loan my circumstances changed and I was able to repay it in full. Seeing what I assumed was an opportunity to save money, I decided to repay the loan in full. However, the finance charges do not appear to have been affected whatsoever.

After several emails enquiring as to whether I would be making a saving by repaying early I finally had a reply nearly a week later stating that the balance owed would not be reduced by early payment. I dug around to find some contact details, finally found a way to speak to them by working their annoyingly patronising automated service and spoke to a real person. I then recorded the conversation that then took place.

During the conversation I asked the following :

Me "I just wanted to check whether or not if I were to repay the outstanding balance now it would be reduced, if it would be any less than the xx that's currently showing on the account"

Operator "I can't reduce that"

Me "So the cancelling the loan option..."

Interrupted with "How much can you pay today?"

Me "Probably about xx, I'm still workign through my finances now"

Operator "I can't reduce, I can't reduce the interest charge"

Me "Ok, so cancelling the loan doesn't have any effect whatsoever, just to clarify that. There's no benefit to it. I just want to try and ascertain what the difference is between cancelling a loan early and repaying the loan early on the payment date, I mean what is the benefit to the customer if any at all"

Operator "The benefit is that you don't keep the loan out for a long time and then the money is then transfered to us, but the interest charge when you take out the loan is added onto that automatically. Bear with me for one moment, I just want to ask my manager something"

Put on hold for a few seconds

Operator "Hi, yeah you're still liable for the full rate of interest, I can't take it off at all"

Me "Ok, so to clarify there's absolutely no benefit whatsoever to the customer for cancelling early"

Operator "If you pay it today then your file's completely closed."

Me "It just seems a little counterintuitive. Ok, I understand. Thank you very much for your time"

At this point I hung up and decided to bring the matter here to see if anyone has had any more positive experiences dealing with these people. They exist to help people in financial difficulty, yet when someone is able to sort themselves out and improve their circumstances they are completely unprepared to accomodate them. Is there anything that I can do, or am I stuck in a rut with regards to the full interest payment?

Update : After reading the credit again I noticed a discrepancy whereby the terms and conditions state that there is a transmission fee of £4.90 on top of the interest charges. However, the email correspondence received later stated that this charge was in fact £5. After contacting by phone again, the operator tried to fob me off with excuses for the extra 10 pence, saying that no one had said anything before, and that it was supposed to be £5. Eventually, after quoting the agreement and threatining to inform OFT she reluctantly agreed to remove the 10 pence charge in exchange for barring me from further loans, and then went on to warn me about making sure payment was recieved by the Monday to avoid a second interest charge. If they get away with doing this with all their customers, that's a huge amount of money being taken from people without even realising it.