credit union.

[conchy_joe]

Hi Everyone, I am trying to help a relative who has a problem with a credit union. My first puzzle is her loan agreement form.The loan instalments are over 61 weeks,but when you multiply the weekly repayment amount by 61 it exceeds the total amount repayable.Secondly,I have the loan agreement form in front of me, but can see no details of how much she may withdraw from her savings.What it does say is a little long winded but I'd like to include it.

"in case of default in payment as herein agreed,the entire balance of loan shall immediately become due and payable at the oprtion of xxxxx Ltd. I/we hereby pledge all paid shares and payments on account of shares, which I/we have now or hereafter may have in this credit union, as security for payment on this loan together with accrued interest,expenses,administration fees and costs incurred.

I/we hereby authorise xxxxx Ltd to apply any such or all such paid shares and payments on account of shares to the payment of the said loan,accrued interest,administration fees and costs incurred.Each party to this agreement,whether as borrower or guarantor,severally waives presentment for payments,demand,protest and notice of protest and dishonour of the same."

Lastly, the weekly loan repayment is equal to 29.19% of her weekly income (pension only).Could this case be flying in the face of the FSA's "treating customers fairly" policy.

[42man]

Do you think there is a chance they may have misquoted the interest rate tolerances ? - http://www.consumeractiongroup.co.uk/forum/showthread.php?169592#post1830350

[conchy_joe]

Hi 42man,They say..."interest is charged at 1% per month(12.7%APR) on the reducing rate.What concerns me is that the loan agreement form clearly states that the total loan balance is £2234.83.."for value received I/we jointly and severally promise to pay xxxxx Ltd,or order,the sum of: £2234.83 payable in 61 instalments/repayments Repayments including interest £40.00....First of such instalments to be paid on (date)xxxxxx and a like amount every week thereafter until the full amount has been paid,with interest after as well as before maturity on the amount from time to time outstanding at the rate of 1% per month on the unpaid balance,payable on the same date.

If you multiply £40.00 by 61 it gives you £2440, an excess of £205.17.

[conchy_joe]

Would it help if I scanned a copy of the agreement (leaving out personal details) and e-mailed it to you.

[conchy_joe]

Any help please ? ? ? .

[conchy_joe]

"FYI"................I phoned the FSA and Consumer Direct and was told the OFT deal with this type of case.Anyway,I wrote to the OFT and also sent them a scanned copy of the loan agreement ,the OFT said I should write to the company telling them that they are in "Breach of Contract" and the matter has been reported to the OFT.

[caro]

You could check the payments using the loan calculator on the ABCUL website. http://www.abcul.coop/loan-calculator

[conchy_joe]

Thanks Caro,I've sent a letter (breech of contract) to the Credit Union company,also a letter of complaint to the OFT.I'll wait and see what happens next,but still no reply from the Credit Uniom company.