Minicredit - Loan Agreement validity

[Tee4Tim]

Guys and gals,

 

Before I sent this letter off by recorded delivery, can I check with you all that you think I am accurate in my not paying their "cancellation charges"?

 

Thanks,

Tim.

 

Dear Sir/Madam,

RE: Contract nnnnnnnnn

In line with the terms of conditions of the Financial Services (Distance Marketing) Regulations 2004 I hereby advise you that I wish to cancel the loan issued on 4th July 2011 with immediate effect. I attempted to do so both via e-mail, which returned a message asking me to use the website to send a message, and the website itself, which failed to work at all!

As the contract has now been cancelled, I also withdraw any authority you consider you have to debit amounts using either my bank details for direct debit purposes or debit card. Any attempt to do so will be considered theft and/or fraud and reported to the relevant authorities, in addition to the OFT and Financial Ombudsman.

I also note the following from the Financial Services (Distance Marketing) Regulations 2004:

13.— (3) The supplier shall refund any sum paid by or on behalf of the consumer under or in relation to the contract to the person by whom it was paid, less any charge made in accordance with paragraph (6), as soon as possible and in any event within a period not exceeding 30 calendar days

(7) The charge shall not exceed an amount which is in proportion to the extent of the service provided to the consumer prior to the time at which the cancellation event occurred (including the service of arranging to provide the financial service) in comparison with the full coverage of the contract, and in any event shall not be such that it could be construed as a penalty. Given the information in this paragraph it would appear paragraph 12 in your contact with me is invalid, specifically - “Where you have borrowed money from us and you cancel this Agreement, we may charge you £1.00 per day for every £100.00 you have borrowed from us, with such charge commencing on the day that you receive the relevant £100.00 from us and ending on the day your cancellation notice is given.” This paragraph indicates that the charge is variable and therefore cannot truly reflect the cost of administration which would not vary dependant on the amount, thus it would be considered a penalty and invalid in law.

Please forward your bank details as soon as possible by e-mail to [email protected] so I can make an electronic payment of the initial captial amount, namely £150. Obviously should you believe the cancellation charges are valid you are at liberty to attempt to prove this in court, however, please note I am fully aware that nothing other than a court judgement will enforce me to do so, so please do not send any other fictitious correspondence relating to this matter.

[bigshoes...bigsocks]

As the contract has now been cancelled, I also withdraw any authority you consider you have to debit amounts using either my bank details for direct debit purposes or debit card. Any attempt to do so will be considered theft and/or fraud and reported to the relevant authorities, in addition to the OFT and Financial Ombudsman.

 

I'd strongly suggest you cancel any cards ASAP. Adding that line is akin to p1ssing into a forest fire.

[ihateyes]

Can i ask why you just didnt ring them?? and pay it that way?? so much easier than getting into a fight..

 

personally im sorry, of i worked for a company like this, i would think you needed the money for a day or 2, you ot it, you used it and emailling us, simply was buying time, as you knew it would take a couple of days to sort out.....

 

Im not upto scratch on distance selling..... would this apply here? as you signed an online credit agreement, so infact you knew exactly what you were signing before you were signing.

[Tee4Tim]

Thanks for the replies, and I agree I probably should cancel the cards. As for Distance Marketing (Financial Services) it most definately does apply (indeed it is even included in THEIR credit agreement which you mention), and given this lot take a whopping £19.50 to use Faster Payments to transfer the funds, I reckon their profit of £19.50 for lending £150 for 14 days is plenty. I am 100% within my rights to cancel the agreement and I do not need to give them a reason. My only query is my assertion that the "charge" they want to levy when I cancel the agreement (which is identical to their interest charges) is not an administrative charge, as it is variable (£1/day per £100) and that makes it a penalty, which legally is invalid.

 

I should also add I didn't ring them as I don't consider a phonecall to leave a sufficient audit trail of activity. An e-mail and a recorded delivery letter certainly does.

[Tee4Tim]

I managed to get a message to Minicredit using the FAQ seciton on their website, and this morning received this wonderful response (note the incorrectly spelt subject and random capitalisation):

 

> To: ______________

> Subject: Your inquery

> Date: Wed, 13 Jul 2011 09:22:42 +0100

> From: [email protected]

>

> Dear ________

>

> The funds were transferred over to You more than a week ago.

> If You do not wish to have this Loan anymore then please use the Early repayment possibility on Your MIniCredit.co.uk online account.

>

>

> Kind regards

> MiniCredit.co.uk

> Client Support Team

 

My response:

 

Dear Sir/Madam,

 

I assume you meant either inqury or enquiry?

 

As previously stated, I am, under acts of UK law, perfectly entitled to cancel the agreement within 14 days and I am simply exercising this right. If I was to use your early payment system I would incur your illegal "administration charge" and an additional £5.50 processing fee. Cancellation under those terms is not acceptable and contary to UK law. Your suggestion that I do so beggars belief. I therefore ask you again to forward your bank details so I can make a payment of £150 to conclude this matter. Any failure to respond to this request will be duly noted and if required used in a court of law against you.

[Tee4Tim]

To which they said:

 

Dear ____________

 

All payments have to be made by a debit card according to the Loan Agreement. We do not provide our Bank account details.

 

Kind regards

MiniCredit.co.uk

Client Support Team

 

To which I said:

 

That may or may not be accurate IF the agreement was in force, I am cancelling the agreement and therefore what you think it does or does not say is irrelevant. So, for the third time, please supply your bank details and in accordance with statue I will return the loan amount within 30 days.

[Tee4Tim]

Oh my word, I never believed these people could be so totally stupid and ignorant. The latest reply was:

 

Dear _______________

 

As we have already told You miniCredit does not provide this information. All the payments need to be made using a debit card which is also explained in the Loan agreement and in the Terms of use that You have accepted.

 

Kind regards

MiniCredit.co.uk

Client Support Team

 

To which I have replied:

 

Your continuing ascertion that you DO NOT accept payment by means other than a debit card suggests you do not understand the acts of law governing your business activities. I informed you I am exercising my legal right to cancel the agreement within 14 days of it taking effect. Therefore, whatsoever is contained within the agreement is irrelevant. The only statue which is in effect is that of Section 13 (11) of the Financial Services (Distance Marketing) Regulations Act 2004. Which states - "(11) The consumer shall, as soon as possible and in any event within a period not exceeding 30 calendar days beginning with the day on which the cancellation event occurred—(a)refund any sum paid by or on behalf of the supplier under or in relation to that contract to the person by whom it was paid; and(b)either restore to the supplier any property of which he has acquired possession under that contract, or deliver or send that property to any person to whom, under regulation 9, a notice of cancellation could have been given in respect of that contract."

 

There is no provision in the act which states that the supplier can dictate the method of payment, so, for the forth time, I request you provide your bank details so I can complete my obligations under the terms of the Act. Your failure to provide such details will not alter that fact I have served notice of cancellation and, if it prohibits me being able to complete my obligations to return the funds to the supplier, I will not be held responsible.

 

Regards,

Tim Everest.

[sillygirl1]

Report them to the OFT and Trading Standards, the OFT are getting hot on Payday loan companies now. Minicredit seem to be one of the worst at the moment (judging by the complaints coming through this site) and need to be regulated or closed down.

 

I can't see how they can incur an admin charge when you are returning their money to them long before it should be.

 

Shows they are clearly after a default situation and want to rack up charges left right and centre, wonder if they charge per email sent?

[Tee4Tim]

Thanks sillygirl1. I will wait until their latest response, but if it does not include their details I will let them know that they will be reported to OFT and Trading Standards, and probably mention what appears to be their attempt to purposely get into what they consider is a default situation.

[Tee4Tim]

Well, more nonsensical rubbish from the folks at Minicredit:

 

Dear ________

 

When You took out the Loan from our company You also accepted the Terms of use of our wesite and in these Terms and conditions it is also explained that all the payments need to be made by a debit card.

 

Kind regards

MiniCredit.co.uk

Client Support Team

 

My Reply (which I have also sent to [email protected])

 

Hi there,

 

Simply because you have Terms and Conditions on your website, it does not automatically make them legally enforceable. IF the terms and conditions of your website state payment MUST be made by debit card then they are unlawful, as mentioned previously the Act of Parliament in question makes NO provision for the supplier to dictate the payment method. I will ask you one final time for your bank details and if I do not receive them I will instigate complaint procedures with the OFT and Trading Standards, I am sure they would be very unimpressed with an organisation purposely trying to prohibit a customer from paying them back in order to accrue spurious charges.

[Tee4Tim]

Final update (for now) - the entire e-mail trail has also been forwarded to my local trading standards. Should I forward it to the trading standards office local to Minicredit too?

 

Thanks,

Tim.

 

From Minicredit:

Thank You for the information. MiniCredit is only acting according to the Loan agreemement and the Terms and Conditions.

From Minicredit:

MiniCredit has provided You the payment methods You can use.

From Me:

As a consequence of you having failed to provide your bank details despite me making the request FIVE times, I shall issue a complaint via the OFT and Trading Standards. You are purposely not enabling me to meet my legal obligations which I am required to carry out under the terms of the Financial Services (Distance Marketing) Regulations 2004. I do not believe you have any case in law to pursue this matter. I suggest you forward the details immediately or except that you will be required to take this case to court.

From Me:

I have CANCELLED the agreement and therefore anything contained within it regarding a payment medium is irrelevant. Any bona fidae company would happily supply these details, indeed, Payday Express, Payday UK, Wages Today and a number of others are more than happy to do so. This makes your position even more untenable. I would think we would be happier to see your £150 returned within 30 days rather than go through the lengthy legal process, which could result in you receiving nothing?

From Minicredit:

To cancel this Loan can You please confirm that You have £163.50 on Your registered debit card for us to debit today?

From Me:

Unfortunately I don't have this last message in it's original form, some am paraphrasing what I believe I wrote. "You obviously don't understand

the terms of the Act in relation to cancellation. As stated in my initial letter:

"Given the information in this paragraph it would appear paragraph 12 in your contact with me is invalid, specifically - “Where you have borrowed money from us and you cancel this Agreement, we may charge you £1.00 per day for every £100.00 you have borrowed from us, with such charge commencing on the day that you receive the relevant £100.00 from us and ending on the day your cancellation notice is given.” This paragraph indicates that the charge is variable and therefore cannot truly reflect the cost of administration which would not vary dependant on the amount, thus it would be considered a penalty and invalid in law."

I therefore reiterate I will only make a payment of £150 and this will be by Faster Payments. I will not submit my new card details to you and will rigorously

check for any Direct Debits on my account in case your organisation attempts to fraudulently set one up."

[Tee4Tim]

Update - sent to Minicredit via their website:

 

Dear Sir/Madam,

 

As per our conversations regarding the cancellation of my loan agreement and your unwillingness to provide bank details with which I can return the original amount, I hereby confirm that case CDCOnnnnnnnn has been logged with Consumer Direct. This is in addition to the case logged with my local Trading Standards and any additional case I may log with the OFT.

 

I urge you to avoid further tarnishing the reputation of your company and jeopardising your license to carry out business by supplying the information I have requested.

[Tee4Tim]

I have also now added my story to those at FreshstartLtd (http://www.freshstartltd.co.uk/debt-help-blog/mini-credit-complaint-update/ - Click on the Mini Credit s ca m link on the righthand side and check out the location of the "office") and informed them I am happy they add my details to their OFT case. Additionally I have raised it with the Financial Ombudsman.

[ihateyes]

I urge you to avoid further tarnishing the reputation of your company .

 

Mini credit are tarnished.... thats like telling someone with bad credit, not paying your loan will affect your credit.......

you may start thinking of answers, because if this went to court you do realise the question will be asked of you Why didnt you ring and get this cleared up in one call???? (Ok Mini, may not of played ball, but it wouldve looked more favourably as you wouldve fustrated all avenues)

Mini cedit would also be ased why they didnt supply their bank details.

 

Tim can i ask are you on some crusade here?

You post that other companies wouldve supplied their details??? how do you know??? have been been cancelling loans all round? PDE bank details are like gold dust.... they are not bono fide

[Tee4Tim]

Hi there! Thanks for posting on the thread. Yeah, tarnished was a bit tongue-in-cheek to be honest!!

 

I didn't call because I do not believe on the weight of evidence, that a) I could have resolved anything and b) in the unlikely event we would have said they agreed to act in accordance with the law, they would have actually done so. If they were that keen to resolve the matter, their first e-mail would have included their details. Maybe I will call them today - just for a laugh (however, I will make them aware I am RECORDING the call). But even if I don't, I have sent a recorded delivery letter to their registered address and contacted them by e-mail, which they replied to on the same working day they received it, so it COULD have been cleared up in exactly the same time as a phone call. And both of these things have been completed within the 14 days during which I have the completely legal right to cancel the agreement.

 

As for a crusade, no, but I have found Minicredit's "hidden" transfer fee to be despicable. I have previously had payment issues and requested the bank details for various Payday loan lenders, including Payday Express (accurate as of March 2011):

 

Lender Sort Code Acc. No. Payday Express 20-24-61 30066850

 

I must say, I had always found Payday Express to be no problem at all, but I hear what you and others are saying. Let's face it, none of this industry is whiter than white.

 

Regards,

Tim.

Edited July 14, 2011 by Tee4Tim

[ihateyes]

i defaulted on 10 loans....

called them all once, then done the rest by email.

Most sorted out the repayment plan on first call.

[Tee4Tim]

Yes, I agree when you default on an agreement, you can do that with success in most instances. However, I am NOT defaulting on a loan, I am cancelling a loan agreement in line with UK law, therefore there is no need for a repayment plan, there is the need for me to "repay the supplier as soon as possible at least within 30 calendar days." As I have said in my e-mails to them, I am happy to do this, but as I don't want them plundering my accounts (as is an all too familiar story on these forums) I will only do so via Faster Payments. I hardly think I am being unreasonable or unlawful and am certain any court would agree. Minicredit are just being difficult in the hope the scaring me into paying their charges. It is NOT going to happen.

[Tee4Tim]

Today's chase up e-mail - "I see from my login on your website that you have not yet acted on the cancellation instruction for my loan agreement. You have also still not supplied your bank details so that I can return the original amount to you. Your denial of these details to me in no way affects my right to cancel or the fact that said cancellation has taken place within the timescalces and terms of the applicable laws."

 

I wonder what delightful response I will receive? At least I haven't been sworn at ... yet!

[ihateyes]

you see, if this went to court, you need to be seen to be making all REASONABLE attempts.....

surely picking up the phone, and aying you want to cancel, give me your sort code acc number to repay isnt unreasonable.... and would sort it very quickly....

 

remember payday loans is generally for 30days... most cancellations are within 7days, fom what i can recall.

[Tee4Tim]

I agree payday loans are anywhere between 1 and 42 days, normally 28-31 days, however that doesn't change statue! If this went to court I cannot believe Minicredit would have any "credit" with the judge whatsoever, whereas I have contacted them by two auditable methods and continually re-iterated the genuine legal position, as well as taking the correct steps to escalate the matter. I would ideally like to get this settled today, but I just can't see that happening, in which case I will do all I can to get these guys closed down, they do not deserve to be able to continue to trade with no regard for the law.

[molly66]

I agree they need shutting even if you ring they are rude and dont ever give bank details ,i have a plan with wda which i set up in one day .ive managed to pay off tower capital yesterday but mini credit are awful they charge for fees for everything includiing a payment .They really need sorting

[ihateyes]

i still think the judge would ask you why you didnt call them to advise of your intentions and to ask for the bank details......

i dont think it may be as clea cut as you might think.....

while im all for people getting one over on these companies, at the same time it needs to be clearcut..... normally there is moe regulars posters on here that would come and give their tuppence, im not sure why they have not responded here......

 

do you have the money to challenge this, and prepared for costs if you lost...... thats what ou need to ask yourself...

also as you use pyday companies, i guess these companies have decided you dont have the means necessary as if yo did, you wouldnt borrow from them

 

 

recently i say a program about neighbour disputes.... there was 2 hosuse that have a 1m path seperationg, both neighbours agreed to split the 1m path between them (it ran up the middle of the gardens - semi detatched). then the neighbour who suggested this changed their mind and wanted the path back...... the other neighbour decided to fight and lost.... lost on the grounds in the land registry it stated there was a path, therefore thats what the judge ruled..... now the losing neighbour has to sell his house to pay the 20k legal bill.

 

im sure if he hadve went to a solicitor, this wouldve been the first thing the solicitor checked, ah well..... just be careful thats me advise.......

 

as you can tell i dont fully agree with your predictment.... purely because it doesnt seem you have made ALL REASONABLE attempts, nd thats what would be key in a court case imo

[26072004]

dont have a mini credit agreement to comment on, but Wongas cancellation clause states they can charge you a daily interest rate (fair enough if you have their money for 10 day you need to pay 10 days interest) this is not a penalty charge.

 

they can also charge you for any services provided, in Wongas case that is the bank transfer fee because its a charge levied on them by their bank (it doesnt matter what the bank charge them for it, if you accept the credit agreement you accept the charge).

[Tee4Tim]

From Minicredit's own pre-contract:

 

If you wish to cancel the Agreement, please

write to [email protected] and tell us that you wish to cancel. You may also give

us notice of cancellation by:

(i) leaving a written cancellation notice, addressed to us, at our address;

(ii) posting a written cancellation notice, addressed to us, to our address; or

(iii) sending a written cancellation notice to us by facsimile on 020 7138 2919

 

No mention of being able to cancel via the telephone. Note, that e-mail address only gives an auto-reply telling you to use the message system on their site.

 

Although obviously these terms and conditions are redundant as I have cancelled the agreement, thus to return to statue, namely The Financial Services (Distance Marketing) Regulations 2004, it states:

 

(3) For the purposes of these Regulations, a notice of cancellation is a notification given—(a)orally (where the supplier has informed the consumer that notice of cancellation may be given orally),(b)in writing, or©in another durable medium available and accessible to the supplier,which, however expressed, indicates the intention of the consumer to cancel the contract by that notification

 

(4) Notice of cancellation given under this regulation by a consumer to a supplier is to be treated as having been properly given if the consumer—

(a)gives it orally to the supplier (where the supplier has informed the consumer that notice of cancellation may be given orally);

(b)leaves it at the address of the supplier last known to the consumer and addressed to the supplier by name (in which case it is to be taken to have been given on the day on which it was left);

©sends it by post to the address of the supplier last known to the consumer and addressed to the supplier by name (in which case it is to be taken to have been given on the day on which it was posted);

(d)sends it by facsimile to the business facsimile number of the supplier last known to the consumer (in which case it is to be taken to have been given on the day on which it was sent);

(e)sends it by electronic mail to the business electronic mail address of the supplier last known to the consumer (in which case it is to be taken to have been given on the day on which it is sent);

or(f)by other electronic means—(i)sends it to an internet address or web-site which the supplier has notified the consumer may be used for the purpose, or(ii)indicates it on such a web-site in accordance with instructions which are on the web-site or which the supplier has provided to the consumer,(in which case it is to be taken to have been given on the day on which it is sent to that address or web-site or indicated on that web-site).

 

So it's a moot point as to whether or not attempting to gain this information by phone is something I should have to do under law, I am loathed to call them on a number from which they profit.

[Tee4Tim]

Having reread section 13 paragraph 7, I am now in two minds as to whether their interest charge up to the point of cancellation *could* be considered valid. For the sake of £13.50, I am not going to bother risking it and have sent the following:

 

"Following my cancellation notice of yesterday (13th July 2011) I hereby confirm I accept to pay the initial amount (£150) and the interest up to the cancellation date (£13.50). Making a total of £163.50. You have continually informed me that you will only take this amount by Debit Card, however, the original card has now been cancelled so that is not possible. Under the terms of the Act I am required to make payment as soon as possible and at least within 30 days, so I would suggest again it is within your interests to supply the required bank details as soon as possible."

 

This is only my read of the act, and there is conflicting advice both here and on other forums, so I am happier to be safe than sorry. Bit of a climbdown though, I now I know I cannot fall foul of anything on the statue.