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Loan issues

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Hi.

 

Over the past few years I have had some problems with a loan I took out with an online provider (an offshoot of one of the major retail banks). I'm trying to decide whether its just me being paranoid and whether the bank are being reasonable, but I feel aggrieved by how I've been treated - any views would be gratefully appreciated. At the end of the day I ran into problems paying the loan - which is down to me - and I am fully committed to pay back what I owe. I have always wanted to pay everything back and have struggled to do so over many years - we are nearly clear of these historic issues but I'm still trying to clear up some remnants of the mess we made for ourselves. I just want to make sure that I am being treated reasonably from the other side....

 

We took out a 25k loan in 2005 and unfortunately had trouble making the repayments. In 2007 we were issued with a default notice and then, about 9 months later (we had been keeping up reasonably against a payment schedule, but had been late a couple of times) we got a court writ (we are in Scotland, so under Scottish law). I panicked a bit at the time and didn't really check the values etc they were claiming and simply headed off into a 'time to pay' order and started making regular payments to them under that. We struggled but as the house was under threat we managed to keep up full repayments on this for the last 5 years or so. The bank had been sending us an annual statement showing our payments and I was pleased to see that we were approaching paying this off (currently a balance of about 1.5 - 2k on the original £25k debt).

 

As it mentioned on the statement that we needed to contact them for an exact settlement figure I gave them a ring to find out exactly where we were and were shocked to discover that the actual settlement balance was 4.5 - 5k greater than on the statement - i.e. we currently still owe close to 7k to pay this off - at least another year and a half of payments more than I had anticipated - this was depressing as we had struggled to get to this point. This came as a bit of a shock and I was annoyed that the statements i had been getting seemed to be misleading (although they did document all the payments we had made correctly).

 

After a Subject Access Request and some digging on my part the basic issue that I hadn't understood was that when the bank took us to court they sued us for the amount of the original default notice (which is clearly higher than the 'current balance') and also did not take off the CCA rebate quoted on the notice. They told me that they always sue for the full amount outstanding on the total agreement and not the amount outstanding less any rebate as the rebate only applies to early repayment... This figure was about 4.5k higher than the balance now reporting on the statements I have been receiving.

 

The two questions / concerns I have are as follows :

 

1. Should the bank have sued for the entire outstanding balance of the loan and not taken into account any settlement rebate? I can see both sides of this argument and don't understand what 'accepted' practice would be??

 

2. Is it reasonable to be sent regular annual statements of our indebtedness and for this to be £4.5 to £5k different (on a current balance on the statement now of only 1.7k. Apologies for simply bandying around 'treating customers fairly' as a term without fully understanding the requirements on the bank, but I would have thought that under 'providing information' it should be made clear if such as large difference exists between what they say on the statement and what is needed to settle the debt? Again, any thoughts, experience or advice would be appreciated?

 

On the flip side, but of concern, is the fact that in the original judgement the bank asked for and were granted 8% interest on the outstanding debt. This appears to have never been applied by the bank. As such I am worried about making too much of a scene about the other items in case they decide to now apply this - which would take what was outstanding up much higher than the current balance.

 

I would prefer an honest answer on this rather than just encouragement to 'have a go' at the bank. After all I do owe the money and accept that. I just want to know whether what they have done is accepted practice and reasonable and, if so, would accept that. I'm having trouble getting the right advice though...

 

Thanks for your help on this.

 

FCAJT

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Hi welcome to CAG, I don't think you can expect to get a'' settlement'' rebate on an account that is in arrears/defaulted as it does not apply so the full outstanding balance remais due.

 

The annual statements would be showing what the normal running of the account without any ''problems'' would be, as they said rebate is for early repayment.


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Thanks - I appreciate the feedback. I think I just need to accept that there's another couple of years of this to run :-(

 

FCAJT

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Thanks - I appreciate the feedback. I think I just need to accept that there's another couple of years of this to run :-(

 

FCAJT

 

Sorry not to have been able to give ''encouragement'' but that would not have been genuine advice!!


Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

Please Consider making a donation to keep this site running!

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