Advice re Payday loan repayment plans

[Penny Dropped]

Please can you provide advice on how I can help a colleague with her Payday loan debt. I too was in debt last year and, with help from this site, managed to set up repayment plans with all of my creditors. However my colleagues situation is slightly different and I'm don't want to provide the wrong advice. Although I have told her about this site, she has limited access to a computer that alll the family use, so I have agreed to contact you on her behalf. We have callculated she owes over £5000 in loans + 1 months interest and has loans with Wonga, CFO, 1month loan, Minicredit, THL, 247 Money Box, Cash Convertors, Microlend, Speedy Loans and Access Money. She also has a loan with Cash Convertors taken out over 7 months and has only made one payment. Like the rest of us she got into the spiral of rolling over loans and taking out loans to pay off the interest on previous loans, to the point now where virtually all her salary is used by interest alone, plus the payment on the Cash Convertor loan.All the loans (or roll over) payments are due next Friday. As most of the loan companies have her bank account details as well as debit card details I advised her to tell her bank that her account had been compromised and request a new account - not mentioning PDLs. Their response was that no one could set up DD with only account details but that they will provide her with a new card is this right? It is too late in the month for work to arrange to pay her salary into another account. Will only having card details changed be enogh to stop payment? I arranged for a new bank account before emailing my creditors with my request for a repayment plan so I was sure they couldn't clear my account out. For my colleague there is not enough time to enable her to do this by Friday. We have devised the emails setting out her offer to each of the PDL companies, but we have not included and I & E (I didn't but many make reference to this now), also I am unsure what she should do regarding Cash Convertors as she has both a PDL with them and a loan. any suggestions? The agreement makes reference to adding daily interest and taking the matter to court.Out of the creditors she has, I have only dealt with Wonga, who were very accomodating but I have been reading horror stories about CFO and Mini credit. I seem to have been lucky regarding harrassing phone calls as other than the initial round of calls from the companies in the first month, the phone calls were only ever made to my mobile and stopped once a repayment plan was agreed. My colleague advised she has given her direct works number out and that a couple of the companuies have her works email address (which is not difficult to deduce given we work for a local counci), but she is worried sick about disciplined if she gets emails and calls to work.Would you suggest trying to arranging a DIY repayment plan or given the extent of the debt whether she should go to CAB or National debline etc?Sorry for the length of the thread but it's better to get as much info in in order for you.Any advice would bemuch appreciated.Thanks

[Jamie Kingston]

I would work out what she thinks she can afford each creditor. Contact them in writing or on the phone (as long as having it backed up in writing) and make realistic offers in order to repay the debts. On some of the smaller lenders they may offer settlements etc... Mini credit and Micro Lend are the only ones I've seen take to court. the smaller the lender the more aggressive the tactics is what I've found from being on the site for a good few years now. Try and get them settled quick. With regard to the larger lenders: Wonga, CFO, 1Month, 24/7 you could probably get away with 12 - 18 month plans. Start by securing your money and at the same time contacting each creditor. The quicker you tell them the better it is for your friend.

[stitchly]

Please can you provide advice on how I can help a colleague with her Payday loan debt. I too was in debt last year and, with help from this site, managed to set up repayment plans with all of my creditors. However my colleagues situation is slightly different and I'm don't want to provide the wrong advice. Although I have told her about this site, she has limited access to a computer that alll the family use, so I have agreed to contact you on her behalf. We have callculated she owes over £5000 in loans + 1 months interest and has loans with Wonga, CFO, 1month loan, Minicredit, THL, 247 Money Box, Cash Convertors, Microlend, Speedy Loans and Access Money. She also has a loan with Cash Convertors taken out over 7 months and has only made one payment. Like the rest of us she got into the spiral of rolling over loans and taking out loans to pay off the interest on previous loans, to the point now where virtually all her salary is used by interest alone, plus the payment on the Cash Convertor loan.All the loans (or roll over) payments are due next Friday. As most of the loan companies have her bank account details as well as debit card details I advised her to tell her bank that her account had been compromised and request a new account - not mentioning PDLs. Their response was that no one could set up DD with only account details but that they will provide her with a new card is this right? It is too late in the month for work to arrange to pay her salary into another account. Will only having card details changed be enogh to stop payment? I arranged for a new bank account before emailing my creditors with my request for a repayment plan so I was sure they couldn't clear my account out. For my colleague there is not enough time to enable her to do this by Friday. We have devised the emails setting out her offer to each of the PDL companies, but we have not included and I & E (I didn't but many make reference to this now), also I am unsure what she should do regarding Cash Convertors as she has both a PDL with them and a loan. any suggestions? The agreement makes reference to adding daily interest and taking the matter to court.Out of the creditors she has, I have only dealt with Wonga, who were very accomodating but I have been reading horror stories about CFO and Mini credit. I seem to have been lucky regarding harrassing phone calls as other than the initial round of calls from the companies in the first month, the phone calls were only ever made to my mobile and stopped once a repayment plan was agreed. My colleague advised she has given her direct works number out and that a couple of the companuies have her works email address (which is not difficult to deduce given we work for a local counci), but she is worried sick about disciplined if she gets emails and calls to work.Would you suggest trying to arranging a DIY repayment plan or given the extent of the debt whether she should go to CAB or National debline etc?Sorry for the length of the thread but it's better to get as much info in in order for you.Any advice would bemuch appreciated.Thanks

 

Firstly youre a very GOOD friend to help your pal out!

 

Secondly and much more importantly you need to secure her/his funds.

Is there any chance of changing the wages to go to someone elses account for this month? What I mean is maybe put them in yours or a relatives?

If not enough time to do that the only other way I can think of is to find out what time they normally get transferred into the account(probably 3am ish but differs bank to bank,search the internet to find this out:wink:) and basically transfer them immediately they hit the account to someone elses. I know this would be a pain to stay up but it will keep the companies from bleeding the account!

 

Then its time to try and negotiate payment plans.

 

Good Luck

[Penny Dropped]

Thanks for your quick responses. I appreciate your comment about being a good friend but I don't think I am doing anything any one of us wouldn't do having been in a similar situation. I can still remember the overwhelming feeling of worry and feeling totally alone with the problem until I found this site sense of being alone so anything I can do to help her I will.It's too late to get her salary paid into another accountand the added problem is she has a number of DD's due out on 30th/1st for which she needs money in her account. Will getting a new card not stop the PDL companies accessing her money? If not any suggestions as to how she can get her bank to give her a new account? My bank were very accomodating when I said the account had been compromised and they immediately transferred my wage to my new account and the DDs so they couldn't access any of my money.

[Jamie Kingston]

Cancel all the direct debits and the debit card and that would normally stop any lenders from gaining access to the funds. At the same time they should contact the lenders and arrange payment plans with them.

[Penny Dropped]

Will getting a new bank card prevent the payments being made as it will have a different number and end date etc My colleague has already asked for this stating she has lost her debit card? She has checked and none of the PDL companies have set up DDs on her account but do have her bank account details. Just read on another thread that you could request the bank cancel continuous payments to companies. Are they likely to do that given the number of PDLs my colleague has? When she spoke with her bank she was given a mini lecture about paying back money owed to companies and unless there was good reason, they wouldn't just stop payment. I thought the bank had to act on your request, after all they are supossed to be working for you!

[Mise Eire]

Getting a new card is not guaranteed to stop them taking money from her account. Most of these lenders will have a continous payment authority setup on the account. That means that they can take money whenever they want to. They wont need to setup a direct debit to do this so you won't see it coming. Also these payments could take her into an unauthorized overdraft.

 

Write a letter to the bank telling them not to make any payments to these companies, that way they are responsible for refunding any money taken out and refunding any overdraft fees caused. It's also a good idea to hand this letter in person or get a recorded delivery. You may have to wait a few days for the bank to refund any money taken without permission and most banks will be as awkward as possible in doing this. Most banks will say they can't stop these payments when asked over the phone but hand in the letter and the ball is then firmly in their court.

Also its not the banks business to lecture her in any way, they are obliged to stop these payments once instructed. You can find some example template letters if you look around the site here.

 

The best and easiest way to secure her money is to open up a new basic\cash account to get her wages paid into so the lenders can't get access to her money. And just looking at the list of lenders above, its safe to say that they will clean the whole account out as soon as they can. It only takes half an hour to open up a basic account in any bank branch.

 

Once this new account is setup don't not give these details to any payday loans company as they all hand around a persons details among eachother. Do not apply for another payday loan using these bank details and also don't share them with any brokers.

 

Once her money is secure then send emails to each of the lenders offering a monthly repayment, again look for some of the example letters\emails here. I hav'nt dealt with a few of the lenders you mentioned but from reading on here it seems that CFO will not accept any payment plans. I have dealt with Minicredit and Speedcredit and these companies won't accept payment plans either. I have setup payment plans with wonga(8 months) and 1monthloan(7 months) before.

 

They will ring her all day on home\work\mobile numbers to bully her into paying. If they do this then theres also some more template letters on here to send to them to stop them harassing her.

Also don't hesitate in reporting these companies to the OFT if they are not playing ball or continue harassing for payment.

 

These companies will also keep adding on bogus charges to the due amount but don't panic, most of these charges are just nonsense and unenforceable. Just work off the principle that you owe the original loan + default fee + 1 months interest. As already mentioned on here this is not written in law anywhere afaik but in the unlikely scenario that one of these companies take her to court then 99% of the time this is the most a judge will ask her to pay as a settlement.

 

You can read through the various threads on here to get an idea of how the individual companies work. Some are far worse than others but the government are looking into their practices at the moment so another few complaints about some of these companies could tip the balance and close them down and they know this only too well.

 

Keep us updated on how it goes.

Good luck

[Penny Dropped]

Thank you Mise Eire.My colleague has an appointment with the bank tomorrow so will tell her to take a letter e continuous payments but to also push for a new account with a different account number and either freeze her old account or transfer her salary to her new account at midnight. The main problem is not setting a new account with a different bank but that it is too late for work to arrange her salary payment into a different account and obviously all the PDLs are due on the same day. Once again advice on this site has been invaluable.

[Mise Eire]

When she goes to the bank tell her to ask them to

 

1. Close the existing account and open up a new account in their branch. They should be able to transfer all her direct debits for her. There may be a problem with getting a current account if her credit rating is under pressure but they should still be able to open a basic account and transfer all direct debits.

 

2.Hand in the letter to cancel the continous payment authorities on the account. They will probably say that they cannot do this but insist on them accepting the letter anyway.

 

If the payroll cut off date for her changing account details is past or if she cannot close the account then she will have to be on hand to logon and transfer all her wages as soon as they're put into her account.

 

The payday loans companies have automated payment systems that will start trying to take payment shortly after midnight and will continue to try to take payment at various intervals until they have been successful.

 

She should have a reasonable idea what time the wages go in at by looking at previous statements. Its normally between 10pm the previous day and 3am on the date itself.

[Mise Eire]

Take a look at the thread I started on the 10th October called "Repayment Plans Advice Welcome". Theres a sample email there she could send to the lenders to get the ball rolling.

[Penny Dropped]

Once again thank you Mise Eire for your guidance. Your advice is very much appreciated. I've forwarded your advice to my colleague for tomorrow and the emails are ready for her to send to the various companies once her money is more secure. Last night she was reading threads about Microlend and Minicredit which have really worried her, especially given both companies were very threatening and the situations continued continued for almost 12 months. Although I advised not all PDLs react in such and aggressive manner and I only had a bad experience with PDE, who after 4 month did agree to a repayment plan, she informed she is not as strong as the people who posted and is considering paying the interest + additional funds in an attempt to clear all the debt rather than face the months of constant harrassment. Problem with this is that it could be easy to slip back into the rollover trap when money becomes tight again, but I understand why she would be considering such an option as I didn't really understand some of the legal type responses being suggested.I'll keep you posted.

[westfield]

I would say that it should really be another bank. If the old account goes overgrown the bank can use what i think is called set off to repay the debt out of her new account. I am sure someone will correct me if i am wrong.

[Penny Dropped]

Thanks Westfield. Maybe I was lucky when I set up a new account with my existing bank as they transferred all DDs, my salary and confirmed they would not make any payments from my old account. My colleague is with Yorkshire Bank who appear somewhat uncooperative, however we shall know more tomorrow. Do you think if she makes it clear she doesnt want the two accounts associated and that once her salary and DDs are transferred that she cancels the old account, this will prevent any association between the two accounts. I suppose she will need to get the bank to confirm they will not do this.

[westfield]

Definitely worth checking.

[Penny Dropped]

Mixed outcome when my colleague went to the bank. Although trying to appear helpful, basicallyYorkshire Bank would not open her another account, cancel any continuous payment mandate or freeze payments out of the account. They did complete forms to prevent each of the PDLs from taking the exact ammount due, but this doesn't prevent them from taking varying amounts from her account if they wanted (which we all know they will attempt). These were completed on the basis that the companies had been informed of the request to cancel the agreement and enter a repayment plan, which she hasn't done yet as she wants to secure her money before emailing them. The bank kept reiterating that she had entered an agreement with the company and they couldn't couldn't intervene and stop payments (only DDs) as they were only the facilitator! They did however arrange to prevent any more DDs from being added to the account until further notice. Apparently not all DDs are drawn up prior to payments being requested and can actually be set up the same day as payment requested to enable the PDLs to collect money from you unwhittingly. She was also advised that whilst she has a new card with a new number this may not necessarily prevent payment being made.Poor lass is now at her whits end. She has another basic account with Santander which she hasn't used for about 2 years so she is checking whether this is still active so she can possibly arrange to transfer her salary at midnight on Thusday. However, she is panicking none of this will work as she is aware aware Access Fast Money usually debit around then. I don't know what else to suggest but do hope her situation helps someone else to act swiftly in arranging a new bank account and payment of any monies well in advance so they are not left in such a state of anxiety. This brings back awful memories for me and I'm just thankful I've managed to get out of this downward spiral.Fingers crossed it all works out for her. It's a sad state of affairs when you cannot trust a company to only take out the money you have agreed on the repayment plan without having to put all these safeguards in place. I accept they want their money and we entered into agreements knowingly, however we all know they can be very underhanded and devious.

[Jamie Kingston]

If she cant safe guard her money would it not be smart to try and get repayment plans in place in writing so therefore if they do get the chance to debit more you can challenge through the FOS and OFT which the lenders are not going to want at the moment... makes more sense...?

[Penny Dropped]

Thanks for your advice Jamie. Emails were forwarded to each PDL company tonight. It's all been rather rushed due to delay in getting to bank and as they are all due on 30th so it's unlikely they will all be set up but at least they have been contacted with an offer. Fingers crossed.

[westfield]

What she should do as well is send an email to each and copy herself in removing any cpa. She should also tell corkscrew bank that actually they are legally obliged to rescind any cpa. Somewhere on here are the regulations. Print them off and drop them into the bank today.

[Jamie Kingston]

Good. Did she secure her wages as well? Make a list of who she owes and how much to each lender - we can probably give advice on how much each one is likely to accept and their bank details if you need.

[Penny Dropped]

Thanks for that advice wesfield. many threads alluded to the bankd being legally obliged to stop cpas however the bank told my colleague catagorically they couldn't!. Will check the site for further info. In the email we put in a sentences "I remove all rights for you to take money from my account. I withdraw your authority to take regular payments from my bank account. " is that sufficent or do you think she should forward another email specifically regarding the cpa.We're in the 11th hour and it's panic stations!

[Jamie Kingston]

lol - I think that's as much as you can do / need to at the moment.

[westfield]

If it was me i would write " Pleaded cancel any continuous payment authority you may hold with immediate effect. I also remove any rights you may have to debit my account. " If possible copy in the regulations i think they are in a sticky on the pdl thread. I am no expert here just saying what i would do.

[Penny Dropped]

Thanks once again for all your advice. Your support is much appreciated. We've found the info on the FSA website re CPAs so my colleague is taking it to the bank at lunch time. folloiwng the emails she forwarded yesterday, 1 Month Loan have accepted a monthly payment of £50 over 9 months and THL have accepted£30 per month over 6 months although are adding a £35 set up fee and confirm they will not add interest etc if the first installment is paid tomorrow - which hopefully ic will be if the rest of the PDL companies don't attempt to empty the account. CFO have replied stating they don't accept Repayment Plans and the usual info regarding not being able to freez interest or accept less than the minimum payment. they go on to state they are legally obliged to accept token payments to reduce the balance, however please note this will not stop additional interest from being added or prevent collections procedures. they are able to offer a deferral but if this is not an option she can contact their collections dept in 33 days to discuss repayment options. For the token payment they have provided their bank details. - wasn't expecting that!As suggested, another email is going to be sent regarding the CPAs.

[Jamie Kingston]

Excellent!! It's a good start so the emails together with the CPA cancellation should keep you pretty safe. Where there any other lenders or issues? Keep us posted if you need any more help.

[Gav Kasso]

I'm interested will the capping of payday loans affect people on payment plans. Anybody here know?