Picture - Interest rates on secured loans

[42man]

Although i'm not with Picture, I would be happy to back any sort of campaign (even if it means writing to Mandlesson !!)....my provider Swift, have done nothing either.....I feel they may go the same way as Picture !!

[pinknico]

Count me in, I am exactly the same position with Picture.

[Quatch]

If they are in the process of finding a buyer maybe a good time to generate as much adverse publicity as possible, letters to papers, MP’s consumer groups etc, anybody that will listen quite frankly. There has top be some bank, financial institution backing Picture? If we could find out whom we could name and shame. I will be entering a number of other forums over the coming days to try and get some momentum going as I believe the louder the scream, the more chance we stand of being heard. Were only asking for what is morally right! Just pass on the cut in rates.

If any body has any suggestions about ways forward please share, I’m kind of new to this, but I am just getting genuinely aggrieved at the way the financial institutions, which were greatly responsible for the mess we are in, are now acting all pious! While they receive large amounts of our cash (taxpayers) and hoard it for future bonuses leaving mere mortals to suffer. Anyway that’s me soapbox bit done now, but time for action me thinks

[WeWantHaslamOut]

I've posted this on a separate topic but I think it's also pertient to this.

 

I have a secured loan with GE Money that has increased this week by 1.95% to 13.15%

 

Their letter states

 

"Our Base Lending rate is linked to how much it costs us to borrow money, which we then lend to our customers. Our decision to increase our Base Lending Rate was based on the cost of the wholesale funding markets. We have seen significant instability in the financial markets, which has resulted in a considerable increase in the rates we are charged when raising money to lend to our customers.... As you may know GE Money is not a UK Bank....You may also be aware that our Base Lending Rate is not linked to the Bank Of England base rate or the LIBOR, and therefore moves independently of these rates.... the recent BoE rate cuts and LIBOR moves have no direct link to our cost of funds"

 

This basically sounds like an organisation that can pretty much do what it wants with it's interest rates - and that of course, wouldn't include looking after it's customers!

[The Phantom]

You may also be aware that our Base Lending Rate is not linked to the Bank Of England base rate or the LIBOR, and therefore moves independently of these rates.... the recent BoE rate cuts and LIBOR moves have no direct link to our cost of funds"

!

 

That is just such a laugh. Yeah, right, they only move independently and have no direct link as long as the trend is downwards. As soon as the trend is upwards then the tune changes, does it not ? And suddenly rates need to increase 'due to the recent increase in the Bank of England base rate'....

Anyway, where on earth do they borrow money from having to increase their rate to almost 14% ?? Directly from a man called Joe wearing black glasses they meet once a month in a public car park in Sicily ?

[42man]

They aren't reducing the interest rates as they are struggling and they are probably not doing much business....however if it can be proved that the PPI was missold, it means the original agreement may be completely unenforceable...!!

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html#post1845581

[pinknico]

In order to get a claim for mis selling against Picture they have to be declared in default, my claim is waiting on the FSCS to do that.The old Picture is liable for the PPI not the new Picture. However new Picture are liable for the loan.

[madh21]

Thought you all might be interested...I have been emailing Picture about a change in interest rates and had a reply yesterday stating that 'the banks have decided to cut interests rates by 0.5% which will become effective from 1st January we will be receiving a letter to confirm this shortly'.

 

This was from Jeremy Griffiths.

[pinknico]

Thanks for that.

 

Though I would be happier if it was a bigger cut!

[wayoutneeded]

I've posted this on a separate topic but I think it's also pertient to this.

 

I have a secured loan with GE Money that has increased this week by 1.95% to 13.15%

 

Their letter states

 

"Our Base Lending rate is linked to how much it costs us to borrow money, which we then lend to our customers. Our decision to increase our Base Lending Rate was based on the cost of the wholesale funding markets. We have seen significant instability in the financial markets, which has resulted in a considerable increase in the rates we are charged when raising money to lend to our customers.... As you may know GE Money is not a UK Bank....You may also be aware that our Base Lending Rate is not linked to the Bank Of England base rate or the LIBOR, and therefore moves independently of these rates.... the recent BoE rate cuts and LIBOR moves have no direct link to our cost of funds"

 

This basically sounds like an organisation that can pretty much do what it wants with it's interest rates - and that of course, wouldn't include looking after it's customers!

 

 

Hi

 

I have a secured loan from Paragon and I contcted them last year regarding the massive increases in interest rates. They wrote back stating that they based it on the LIBOR rates and not the BOE rates, yet to date there has been no decrease. Surely if these companies have stated inwriting that they use the LIBOR rates then they would be legally obliged to reduce in line with these rates reducing.

[Conniff]

None of them are legally obliged to drop their rates when whatever they follow drops (or rises).

Unless your agreement states that is will follow at so many points above ie; tracker. But even then there is no set time for them to come into line when the rates alter, so even a tracker can be misleading.

 

There are companies (in all walks of life) that are making a killing out of this so called credit crunch.

[The Phantom]

None of them are legally obliged to drop their rates when whatever they follow drops (or rises).

Unless your agreement states that is will follow at so many points above ie; tracker. But even then there is no set time for them to come into line when the rates alter, so even a tracker can be misleading.

 

There are companies (in all walks of life) that are making a killing out of this so called credit crunch.

 

When does 'making a killing' become extortion though ? If they had told me at the time of taking out the loan that it is variable only upwards but not downwards, that their rate increases follow the BoE increases but then they do not follow the same line when the rates come down (which is what one would expect as a customer) I would never have taken out the loan. They never explained it and I think that's what we all feel here is the annoying bit

[The GodMother]

well pointed out cause we would expect to see the rates rise and fall when ever they do.

[The Phantom]

OK - got their letter today that they have dropped out rate by 0.5% to 9.592% !! Which I still feel is extortionate compared to LIBOR and BoE current rate

 

Also, they have included a list of new fees, which I don't think are in our agreement, for example a payment processing fee of £5.- if payment not by direct debit. There is nothing to that effect in our agreement with them and we have paid them over the phone in the past with our debit card and no fee was added then. This appears to be an addition or an amendment to our agreement, do we then not have to agree to this ?

Also they seem to think we have to pay them £295.- if we change our first charge mortgage provider (i.e. if we remortgage and change from Nat West to someone else)

Is that legal ? Do we have to agree to these charges or pay them ? (Also the famous unpaid direct debit fee and returned cheque fee)

Any thoughts from anybody on this would be welcome

[The Phantom]

As for what we discussed earlier in the thread, i.e. the ambiguous variable rate terms in our agreements (not only Picture but also Paragon and other secured loan lenders)...I wonder whether this would now fall under the new

The Consumer Protection from Unfair Trading Regulations 2008 ?

 

Especially:

 

Misleading actions

 

5.—(1) A commercial practice is a misleading action if it satisfies the conditions in either paragraph (2) or paragraph (3).

(2) A commercial practice satisfies the conditions of this paragraph—

(a) if it contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and

(b) it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

(3) A commercial practice satisfies the conditions of this paragraph if—

(a) it concerns any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor; or

(b) it concerns any failure by a trader to comply with a commitment contained in a code of conduct which the trader has undertaken to comply with, if—

(i) the trader indicates in a commercial practice that he is bound by that code of conduct, and

(ii) the commitment is firm and capable of being verified and is not aspirational,

and it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise, taking account of its factual context and of all its features and circumstances.

 

Misleading omissions

 

6.—(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—

(a) the commercial practice omits material information,

(b) the commercial practice hides material information,

© the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or

(d) the commercial practice fails to identify its commercial intent, unless this is already apparent from the context,

and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

[Sparkie1723]

Increasing an interest rate to reflect a rise in interset rate and then ........failing to reduce the interset to reflect a drop in interest rate could be legally challenged as an "Unfair Relationship" under section 140 of the New Consumer Credit Credit Act (amendments) 2006....and a definate one sided contract.

 

 

sparkie

[The Phantom]

The problem with the CCA I think is that it only affects loans for up to a certain amount, doesn't it ? Most of the secured mortgage like loans usually exceed that amount and are therefore unregulated, or am I wrong ?

I know our Picture loan is unregulated so the CCA won't help ....

[pinknico]

The Phantom, have you read the thread about Multi agreements?

[The Phantom]

No, not yet. (?)

[pinknico]

It goes into regulated and non regulated agreements

[Sparkie1723]

All Credit agreements providing they are still in force are now protected by section 140 as of 6th April 2007.

All New Agreements signed after April 6th 2008 are fully and completely coverd by the New CCA Act amendments and from this date there is no financial limit, ther are very few loan agreements that are not covered the main ones are First Mortgages that are regulated by the FSA.

 

In most case there is no such thing as an unregulated agreement any more.

 

 

sparkie

[pinknico]

Thanks Sparkie:)

[The Phantom]

OK, just had a read through the thread ref the multiple agreements. The end of it lost me a bit with the Dual calc APR software etc, but as far as I understand the main part of it, our Picture loan could be a multiple agreement.

We took it out in March 2005.

We did not get any money paid to us directly. The whole amount was used to consolidate / pay off other unsecured loans. This exceeds 25K and would be unregulated I suppose. The PPi insurance that was then added came to 12475.-. So that would have to be treated as the regulated part ?

The agreement looks like this on the first page

 

Amount of advance XXXXXXX

Optional PPI xxxxxxxx

Total amount of credit XXXXXXX

Monthly interest rate xxx

APR xxx

Monthly repayments of XXXXXX

 

Repayment term xxx months

 

The loan is secured by a mortgage on your home, if you do not keep up bla bla bla

 

Some information about the legal charge, the data protection act and the PPI

 

then below our signatures and date (March 2005)

 

Am I correct to say the PPI part of it should be shown with its own APR and repayments ? Or is this all not relevant because the agreement is from before May 2005 ?

 

Maybe I should post on the other thread... ?

[pinknico]

I assume you werent mis sold your PPI?

[The Phantom]

Well, we probably were in a way, as we were given the impression we wouldn't get the loan without it. We have since also found out that although we are both insured, only the first named person is fully insured against redundancy etc. The second named is only insured for life. We thought we were both fully protected considering the enormous price.