Hi all - I hope someone can help with this query - thanks in advance for any advice! My situation - I've been on a Debt Management Plan for a few years and use one of my two bank accounts to make the payments. Last summer while I was making my usual DMP payments I noticed online that an overdraft facility had become available on that account, interest free for a year. I thought it'd be a good way to help pay off the few creditors who were still charging me interest, including a couple of payday loan firms. The problem is that in the coming months every time I clicked on the overdraft link online I was allowed to borrow more - taking it from £200 up to almost £6,000 now. I was stupid to keep clicking, I know... But the bank gave me this overdraft despite me: a) not paying my salary into the account; b) having multiple defaults on my credit record; c) making payments to two or more debt collection firms each month; d) using payday lenders and, e) even more stupidly, gambling online - a big part of how I ended up in this mess in the first place. So - they are due to start charging interest on this overdraft soon and it's going to tip me over the edge (again). I really don't want to default and want to find a way through it. But my question is whether I should complain about a breach of their responsible lending guidelines. Would that serve any purpose? Do I have a case? What might they do, for better or worse? I've actually had refunds from a few payday loan firms who acknowledged they should never have issued loans to me, so I'd have thought a mainstream bank must have some sort of similar view? Any advice would be very much appreciated! Thanks

hi Shaun - thanks for sharing. Seems all payday loans firms are realising they're in trouble on historic irresponsible lending. There's more on this thread (http://www.consumeractiongroup.co.uk/forum/showthread.php?397633-Mis-sold-PDL-Claim-back-interest-fees-any-experience) for anyone interested! Could be the next big PPI/reclaiming thing, maybe? (And there's a discussion about it on Moneysavingexpert too http://forums.moneysavingexpert.com/showthread.php?t=4965788)

Thanks! If your case does appear on the FOS site it would be great if you could let us know on this thread? I think that being able to read their full findings would really help a lot of people. Thanks again for your information and encouragement. If I make any progress, I'll put it here.

Hi mummyfightsback Just to say many thanks for sharing your experience and congratulations on what you achieved. I've been in very much the same position as you and the original poster (wouldn't it be good to have an update from him/her?)... And I also saw this thread on Moneysavingexpert http://forums.moneysavingexpert.com/showthread.php?t=4965788 which maybe suggests that real momentum is building around this issue? I would love to begin the process of challenging the companies that loaned to me month after month (even after I had defaulted and completed repayment plans) - it was a horrible trap to be in. I just find the whole idea of taking them on very daunting - and I really don't know where to begin. Did you complain to them, or go straight to the FSA? And is your case on the FSA/ombudsman website yet? It would be great to read their ruling in full. I'm assuming there are no templates/guides to lodging a claim like this? Anyway many thanks again!

Hi, thanks - yes, that's right - that's exactly what they've done. (Though I should make it clear that they've not done it in response to the DMP: the loan was always set up like this, from the outset. I borrowed X, the total interest over the term was Y, and my balance to repay on day one was X plus Y. My early repayments were almost entirely interest only payments. In short, all the interest was 'front loaded'. They have given me some help since the DMP in that a) they have accepted an extended repayment term with reduced payments, and b) they have promised not to add any additional interest. But because the whole contractual payment was added to the principal at the outset, that means that, however many years it takes me, they stand to get back every bit of interest due under the original contract, unlike all my other creditors. And they won't budge on that. I'm very happy to keep arguing with them about this being unfair, but I really just wondered if anyone else had experienced this situation, or can tell me whether I'm right/wrong to persue it. (And dx100uk, thanks - I will have to ask them for a copy of the original contract, but when I get one I'll post it.)

OK, thanks very much for the reply. Looks like there is no way round this, then. I'll be paying this back for many years to come!

Thanks. I manage the DMP myself, and it's been going 15 months now. The loan, though, dates back to 2009, and all the payments were up to date for the first two and a half years. The payments are as you describe: mostly interest at first. They have already defaulted me, but the annual statements are unchanged in format. They agreed not to charge additional interest for making reduced payments, which I appreciate - but that doesn't change the fact that, because they won't refund the interest which applies to the months since I entered the DMP, Halifax are set to be the only one of my creditors who receive back everything I borrowed plus every bit of interest in the original agreement (eventually....) I just wanted to know if this is standard? It doesn't seem right to me? thanks

Hi - thanks very much for the reply. To clarify, that is not what is happening here - I'm not being charged twice. It's Halifax - the way the loan was set up, all the the interest was front-loaded right at the start. The annual statements I receive just show, month by month, the amount I have paid and, in brackets, the amount of front-loaded interest that effectively applies to that month of the agreement. So I'm not being double-charged or anything - their statements just break it down so you can see how the original interest was calculated. All I asked them to do is to look at deducting/refunding the interest for the months since I entered a DMP, and that request was turned down. They say that because all the interest was added to the total balance on day one, there is nothing to 'freeze'. And they won't do refunds. I know that is their right, but it seems unfair on all my other creditors who have helped by stopping interest charges. And it means my repayments to Halifax will drag on for years... Does anyone know what more I can do, or is what Halifax are saying just standard practice, and I have to accept it? (And I don't have the original agreement to hand, unfortunately, but I will ask for a copy.) thanks again for taking the time to help!

thanks, that's very kind!

Hi - no, unfortunately not! Thanks

Hi - I hope someone can help: thanks in advance. I'm a year into a DMP now, but am having trouble with one of my creditors. All the others froze interest when the DMP started, apart from my biggest creditor, who gave me a personal loan in 2009. The creditor says that because all the interest was "front-loaded" - charged and added on to the balance right at the start - they cannot do anything to help my situation. So my annual statement from them shows me making a reduced DMP payment each month, while the effective interest rate for each month remains almost double that. I wondered if anyone else has experience of this? I asked the creditor to look at cancelling/refunding the interest covering the time period since my DMP began - in other words, I asked for the same help that my other creditors have offered. But they just said no. All the interest was added to the total in month one of the 86 month loan, a nd that's the way it stays... Is that right? Thanks very much for any advice!

Interesting! Please keep the updates coming

Hi Mise Eire I am using a pre-paid debit card for this - not linked to any bank account, and it can't go overdrawn. It seems like the safest way to deal with these firms, even if it's a little bit more hassle.

Thanks again. I will do that and see what they say. I'll post on this thread what happens, in case it helps anyone else.

Hi Sequenci - thanks very much, that's reassuring. I just wonder what they will do if I refuse to give them the details they are asking for within seven days. I guess the arrears and the charges will just keep building up I wonder how long they would leave it before escalating their action. I have to admit I find it all a bit frightening ...