Capitalization- help desperately needed

[bankbandit]

I hope someone can help. I have had a 6 month statement on Welcome loan, the capitalization means I am paying £20 off despite paying £116 a month. I'm totally outraged, when I phoned to query this I got told it's like a credit card (interest) and I'm paying it on the balance. I thought I'd taken a loan out???? with all interest already included in my payments.

While I'm aware of claiming back for letters, calls etc as per bank charges what can be done about this? Already planning to go to FOS, will I need all the statements, charges etc?

Please help, totally lost on the interest element if that's what it is. Surely it's a penalty?

[jdene]

There is a lot of help you can get here so you have come to the right place, you need to send of an SAR thats a subject access request first you will need to send this recorded delivery and with a £10 cheque or postal order there is a letter in the templates section for this and this will get you all the information they hold on you including your agreement and payment history, they have a limited time to respond to this think it is 14 days plus 2 days to allow for delivery once you have all your information there are a load of very helpfulland knowledgeable people here who will help you, try and read as many of the other threads as you can as well as this will not only give you valuable information but also a surprising amount of confidence to deal with these people.

Hope this helps

Regards jdene

[bankbandit]

Many thanks jdene, I have been looking round but all I can find is regarding the charges. I need to get these capitalization charges stopped and given back-they far outweigh a few £10 calls here and there. I spoke to some oaf at the office who said interest payments "cant" be stopped, I advised any institution can stop its own interest charges, it then became "welcome won't" - big difference. She then admitted that Welcome are only after the profit and to make money like any other company, shame they revert to fraud and mis-selling. Awaiting call from branch manager. Breath not held.

[dx100uk]

sar is 40 calendar days FYI.

 

dx

[bobbyh99]

Almost all of your payment is paying the interest at the beginning of a loan!! It only really starts to pay the capital further into the loan term!

 

How much is the loan for?

What is the interest rate?

When did you take the loan out?

 

BobbyH

[bankbandit]

Hi Bobby,

 

don't have all the information to hand but here goes:

took out £2000 approx 4 yrs ago (over 36 months- all interest front loaded), was paying £116 as per agreement, at present I'm not sure how many (or how much paid in) payments I've made as I was with CCCS for a bit, I fell into arrears and missed a few payments but have recently started paying £116 again as per original agreement and they have said have £750 arrears and £2500 balance, hence "capitalization" of £90 pcm on balance.

Am so angry may just put in FOS complaint and let them deal with getting all the paperwork, I don't know how much to claim back either if capitalization is tied up with interest. Too murky.

[bobbyh99]

Do you have a copy of the credit agreement with the figures that you can post up (minus personal details)?

 

A £2000 loan over 36 months @ £116 per month makes interest at approximately 73% APR!

 

I am not entirely sure what you mean by "all interest front loaded". Are you saying the interest rate was fixed for 36 months?

 

 

BobbyH

[bankbandit]

Sorry by front loaded I mean that my payment of £116 paid part of the capital (of £2000) and the interest ie after 36 payments balance is nil. Feels like interest is added onto interest, it will take 150 months at these rates.

If i can find a copy wills can one in. Thanks.

[bobbyh99]

So basically like any fixed rate loan!

Like I said before at the beginning of the loan the £116 paid for mostly the interest and a small portion of the capital. Further down the 36 months line it pays less interest and more capital and when it reaches the end of the 36 months the balance is nil.

 

By looking at a statement it shows you the balance of the account, what it doesn't show is any rebate on the interest that would be applied should you wish pay off the loan in full!

 

In order to calculate the rebate, you would need to know exactly how much you have paid against the account, isn't this shown on the statement?

[bankbandit]

It's a six month statement. Have spoken with some sort of complaint team who are "investigsting", quite helpful I think, basically said Welcome personal loans were NEVER sold on compound interest, 4% always added to balance , like a credit card, point is I only ever had £2000, not £4200 (ie 116 x36 ). Tried to sell it like "well the balance is reducing so you pay less interest" - I'M STILL PAYING £20 CAPITAL A MONTH ON £2500!!!! - yeah might go down sometime within next decade. Not hopeful for results, wonder who's side they'll rule on.

Originally took loan out 2 yrs ago, they send copy agreement and full statements with all debits/credits listed.

Edited June 10, 2009 by bankbandit
incomplete

[bobbyh99]

I am a little confused now.

Please confirm the following:

 

1-You took out a £2000 loan

2-Over 36 months

3-£116 per month to pay (x36)

4-Total to pay on loan £4,176

 

Had you paid the monthly amount of £116 for 36 months, you would have cleared the loan. You would have paid £4,176 back to WF. This means you have paid £2,176 in interest and £2,000 capital.

 

Example of loan:

Month1 - £115 interest - £1 capital

Month2 - £112 interest - £4 capital

Month34 - £4 Interest - £112 capital

Month36 - £1 Interest - £115 capital

 

Total Interest £2,176 - Total Capital £2,000

 

Interest is calculated at the rate of interest on the daily balance outstanding of the total amount of credit.

 

At some point during the loan term you stopped paying the loan, this mean that interest is added to you loan monthly (calculated daily) plus all the other stuff they add on like arrears charges, telephone call charges etc etc. without having any amount paid against the account (i.e. your monthly instalment). So the balance of the account will increase.

 

These interest payments are not a penalty (although 73% APR is very high!) and can't be claimed back as far as I am aware.

 

I hope this makes things a little clearer!

 

BobbyH

[Forsure]

Hi

 

I would still submit a Subject Access Request to them and find out what they have got on you. I have had success with mine with the following letter ( obviously you would need to add your own details ).........

 

 

 

 

DATA PROTECTION ACT 1998

SUBJECT ACCESS REQUEST

Dear Sirs,

Re Loan Agreement Number : xxxxxxxxxxx

I understand that you currently hold details of my personal and financial information within your internal record systems with regard to my Loan Accounts.

Please supply me with a complete list of transactions and charges relating to the history of my loans with your organisation. Alternatively a complete set of statements for the loan accounts is acceptable. I would be grateful if you would provide the following for all loan accounts I have held with your organisation (including but not limited to):

· Full copies of all contracts which you believe exist or have existed between myself and your organisation, including true copies of any documents you hold in support of the same.

· A complete list of all transactions or statements relating to all my Loan Accounts with your organization.

· Copies of all documents which include any of my personal information including copies of any contacts or invoices, emails or computer records containing my personal information, or any records which pertain to me.

· Full copies or transcripts of any correspondence in postal, email or any other format which you have entered into with any individual, organisation or third party which contains my personal or financial information, or which pertains to me.

· Where any previous information or records held have been deleted or disposed of, the methods used to do so, including dates, certificates or references confirming details of destruction. Where you are unable to provide such certificates, please provide a declaration, signed by an authorized officer of your company, confirming the dates and methods of destruction of this data.

· Full hard copy print outs of my personal or financial information, held in a digital, magnetic or any other format which is held in any archives, backups or other storage devices / locations.

I enclose a cheque in the sum of £10.00 to cover your fee and request that this is acknowledged by way of a receipted invoice. You have 40 days in which to comply under section 7(10) of the Data Protection Act 1998.

IF YOU ARE UNABLE TO DEAL WITH THIS REQUEST, YOU SHOULD IMMEDIATELY FORWARD IT TO THE PERSON WITHIN YOUR ORGANISATION RESPONSIBLE FOR DATA PROTECTION.

I look forward to hearing from you in the first instance of receipt.

Yours Sincerely

Mr X Xxxxxxxx

 

 

 

 

[bankbandit]

Thank you all for the info. This was sold to me, and my understanding of it was, as a fixed term loan ie only over 36 months. I'm by no means a financial whizz but likewise not a dunce. No way would I have signed for a £2000 starting balance on a credit card type deal where they are adding 4% a month. At one point they were going to offer me a £95 pcm payment as I was struggling - which is roughly what minimum payment is! so all I'd be doing is paying interest - And I've never had a statement showing this capitalization till now.

Not too sure how FOS would help but I'm putting a complaint in,will cost them £500 at least. Or I hang in until they go under. Can I at least dispute the debt and get interest stopped?

[Forsure]

Thank you all for the info. This was sold to me, and my understanding of it was, as a fixed term loan ie only over 36 months. I'm by no means a financial whizz but likewise not a dunce. No way would I have signed for a £2000 starting balance on a credit card type deal where they are adding 4% a month. At one point they were going to offer me a £95 pcm payment as I was struggling - which is roughly what minimum payment is! so all I'd be doing is paying interest - And I've never had a statement showing this capitalization till now.

Not too sure how FOS would help but I'm putting a complaint in,will cost them £500 at least. Or I hang in until they go under. Can I at least dispute the debt and get interest stopped?

 

What I would do is to submit the Subject Access Request first, check out what they have on you, and see if it tallies with what you have....then you will receive loads of help on this forum with your next step

[bankbandit]

Have just received correspondence form customer services. Not sent in a SAR request as yet but the letter received does say that they do not have a copy of the original agreement/signed contract. Will send in the SAR and get copy of all documentation but does this mean it is unenforceable or is there any other ramifications? I am going to apply to FOS but I don't know what I'm asking them to do, in the meantime I'll keep up payments as I don't want the hassle of getting chased etc but may look to claim money back, I want to pay the money back as I don't fell it right to not pay anything or have it cancelled as I took the loan in the first place, likewise I don't want to be ripped off by some cowboy sub prime predators.

[bankbandit]

I have sent in the SAR letter and £10 and also the £1 for a true copy under CCA. This was signed for on 18/09, totally illegible handily, but have received an acknowledgement of my request costing £11? Maybe have just added two together for ease but feel they may be treating it as one request, therefore is my account in dispute once the 14 days are up regarding the CCA request? Will happily stop the debit and advise them it's in dispute.

[T2upNorth]

Have just seen your post #15. If they fail to comply with the CCA (12+2 days) then they can't enforce legally. Be careful, they can rectify the breach should a CCA turn up.... so were you to decide to withhold payment they could default you if you were in arrears. Although, take a look at the CCA regs, especially Section 6 - interesting reading. http://www.consumeractiongroup.co.uk/forum/general-debt-issues/162851-consumer-credit-agreements-guide.html

 

Don't worry about the 10+1=11 - it's not often their numbers add up but it doesn't change the fact you've sent CCA and SAR and require legal responses to both....

[bankbandit]

As of today have cancelLed the DD (GIVEN 12+2) but have not sent dispute letter. Will await and see if any chasing action occurs, is it best to send the dispute letter to cover that base? They have confirmed receipt, albeit in a roundabout and haphazardly vague way.

[Fester Tester]

Yes, you need to write to tell them that as they have not provided the agreement as per your CCA request, then your account is now in dispute, and you are ceasing all payments until such time as they comply with your request.

 

In the meantime, they are not entitled to enforce the debt, nor are they entitled to add interest or other charges, until the dispute is resolved. They will probably write with a Final Notice, and tell you that as far as they are concerned there is now no vallid reason for disputing the debt. But that is bollix, because clearly they are still in default.

 

After all, as has been mentioned before, 73% IS awfully high, and without the agreement, you don't even know if the interest is correct, never mind anything else.

[bankbandit]

Wonder if the local office will bother chasing it or will be too busy scarpering for the dole centre? Will just refer them to the place am dealing with in nottingham.

[Fester Tester]

Absolute waste of time speaking to the local office. Keep dealing with the compliance department. If local office phone, tell them its in dispute and put the phone straight back down.

[postggj]

Ditto On That

[bankbandit]

I'm sending the dispute letter but am unsure which one to pick from the list, they have only not complied with the CCA, still within time for SAR. Do I need to keep in the parts about them stopping data controlling under section 10? Or do I need to wait until SAR time elapses? All the help is greatfully appreciated.

[Fester Tester]

I would just send them a simple letter along the lines of, they have yet to comply with your CCA request, and therefore you are of a mind to stop all payments until they do comply. And since the account is in dispute, and you consider it will remain so until they comply with your CCA request, they are not entitled to charge interest, or impose any further charges.

 

Failure to adhere will mean that you will escalate the complaint to the fOS.

 

Have you a copy of their complaints procedure? No? Demand one. They MUST supply.

[bankbandit]

I have sent the dispute account letter to compliance but had a call from local office (one of ones still open!) to say my DD had been stopped. They were told of the situation and told to correspond in writing, no further info ventured. The best part was when the advisor said he wasn't concerned about the money but about the damage to my credit rating! They can't put it on my credit rating if it's in dispute surely??

The most joyous part of the call was the resignation and dejection in the guy's voice as he'd previously delighted in the "you owe us" arrogant overtones. It's the jobs section tomorrow, may drop a local paper off for him.

The only thing I committed to do was give him a call back with the name of the person in Nottingham dealing.