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Littlewoods Buy Now Pay Later Running Credit Account or Fixed Term Agreement

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Hi all

I'm after some advice before I send my complaint to Littlewoods/Very/Shop Direct (I think they're all the same.

 

Basically I have a Buy Now Pay Later product. The interest became payable in September 2012 after the 12 months interest free period in which I had the option to pay it off in full.

 

In 2010 the same thing occurred whereas the interest became payable, however on that occasion I managed to get an Early Settlement Figure.

 

What the Catalogue seem to have done since, was that in the past there would be 2 balances on a Statement: Account Balance and Credit Balance. Now the Credit Balance has simply been merged into the Account Balance. In my opinion nothing has changed in the terms and conditions other than how they display the balance.

 

In January 2013 I requested a Settlement Balance, that I will not be offered a settlement figure, as apparently that the account that I hold is a Running Credit Account and not a Fixed Term Credit Account.

 

I found this extract form the following website:

http://www.tradingstandards.gov.uk/cgi-bin/glos/con1item.cgi?file=*ADV0030-1011.txt

The law provides that borrowers can settle their agreements early, provided certain conditions are met. The conditions are as follows:

The agreement is regulated by the Consumer Credit Act 1974 and Consumer Credit Act 2006. The vast majority of credit agreements are regulated. Check the agreement - it should tell you whether it is regulated or not.

The credit is repayable at, or after, a fixed period. For example, after three years or if the whole amount falls due on a specified date.

The borrower pays before the agreement is due to end. The borrower gives notice of early or partial settlement. You must notify the creditor that you wish to settle early in part or in full. The rebate does not apply to charges paid before the settlement date. This will include arrangement fees and broker's fees, etc.

The agreement is not for running-account credit. Credit card and store card accounts can only be ended by paying the full balance outstanding, there will be no reduction of the interest owing because this is added on an ongoing basis and includes no charges for future use.

The borrower has not 'terminated' the agreement. This applies only to hire purchase and conditional sale agreements. The Act has special provisions for these contracts if the consumer terminates rather than settles early. See our leaflet 'Credit terminology - what does it mean?' to see if you have one of these contracts.

The payment of credit was not in instalments - in other words, it is repayable in a lump sum. This means that if your credit was advanced in instalments, but you have to pay it all at the end, you do not qualify for a rebate.

How do I get a settlement figure?

Under Section 97 of the Consumer Credit Act 1974, the borrower is entitled to know how much they have to pay in order to clear the debt. The request may be oral or in writing. There is no specified format or wording that should be used. The borrower should give the creditor enough details to enable them to identify the agreement, including the agreement number. If notice is given in writing it should be headed 'Request for early settlement figure'. If you are up-to-date with your payments, some companies will provide a settlement figure over the telephone.

What if I don't receive a settlement figure?

The Consumer Credit Act 1974 requires the information to be provided within 12 working days from receipt of your request. If the creditor fails to provide the information requested, they cannot enforce the agreement against you until they do and if they do not send you the information for more than a month, the creditor commits an offence. If this happens to you, contact the Citizens Advice consumer service (see below for contact details)

I feel that they are wrong and I want to take it further. I am drawing up a complaint to the FOS but not until I give the company one last chance. I feel this looks good on my behalf.

 

I would really appreciate your comments/suggestions before I send it off.

With regards to the early settlement issue. I wish to inform you that I am going to raise a complaint with the financial Ombudsman and will use this email and any other correspondence of my choosing, in my defence. I will give you one last opportunity to look into this again. My reasons are set out below.

1) Shop Direct's own Buy Now Pay Later Terms & Conditions state:

"You have the right to pay the balance of this credit agreement in full or in part under Section 94 of the Consumer Credit Act 1974. If you wish to do this you must give notice to us before payment is made by contacting us on; telephone number 0844 822 8000, e-mail creditagreements@shopdirect.com or in writing to Shop Direct Finance Company Limited, Customer Support Team, Sandringham House, Sandringham Avenue, Chelmsford, CM92 1LE."

2) You mentioned in your letter that I will not be offered a settlement figure, as according to you, my account that I hold with you is a Running Credit Account and not a Fixed Term Credit Account.

You went on to correctly state the following:

"Consumer Credit Act (Early Settlement) Regulations 2004 clearly state

Early Settlement cannot be requested for Running Credit accounts. Basically Credit card and Store card accounts can only be ended by paying the full balance outstanding, there will be no reduction of interest owing because this is added on an ongoing basis and includes no charges for future use."

My Response:

In Sept 2011 I ordered an Hotpoint Washing Machine (item No:PE2743Y) from Littlewoods on a Buy Now Pay Later terms. The terms clearly stated that I can pay the cash price of £319.00 in full by the 28th September 2012 and avoid paying interest. If I did not pay by this date, then I could pay in installments over 156 weeks the Cash Price of £319 And interest of £318.19 interest (Total £637.19) 32.9% . This is in no way a case of "interest being added on an ongoing basis".

The reason for the Term Running Account Credit and Early Settlement not being offered on accounts such as Credit Card and Store Card accounts is because if I were to pay my Credit Card or Store Card accounts in full on any given day, I would only be charged interest up to that given day. In my case interest has already been applied up to Sep 2015. This does not conform to the definition of a Running Credit Account. I therefore suggest this is a "Fixed Term Credit Agreement.

I have previously been given an Early Settlement Figure in writing. This was in 2010 when I had purchased products on the same Buy Now Pay Later Terms. Since this time I have not signed or agreed to any changes to the terms of my account.

It seems from a layman's point of view that I can pay in full if I so wish, however I would be charged interest for a further 2 and a half years. I would like to think that anyone would deem this as unfair terms of contract.

If you still maintain that I am not going to get an Early Settlement quote, I will have no other option but to take this further.

I hope to hear from you within 28 days. If I hear nothing I will take whatever course of action I decide without further notice

 

What do you think. Have I got a case?

 

Thanks for looking

Edited by mahharg

Knowledge is Power

Go get em!

Have I been of any help to you? if so please click my scales to the left to enhance my reputation. Thank you. If not PM me.

 

Nationwide - won claim 

Advice & opinions of mahharg are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.

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Hi all

I'm after some advice before I send my complaint to Littlewoods/Very/Shop Direct (I think they're all the same.

 

Basically I have a Buy Now Pay Later product. The interest became payable in September 2012 after the 12 months interest free period in which I had the option to pay it off in full.

 

In 2010 the same thing occurred whereas the interest became payable, however on that occasion I managed to get an Early Settlement Figure.

 

What the Catalogue seem to have done since, was that in the past there would be 2 balances on a Statement: Account Balance and Credit Balance. Now the Credit Balance has simply been merged into the Account Balance. In my opinion nothing has changed in the terms and conditions other than how they display the balance.

 

In January 2013 I requested a Settlement Balance, that I will not be offered a settlement figure, as apparently that the account that I hold is a Running Credit Account and not a Fixed Term Credit Account.

 

I found this extract form the following website:

http://www.tradingstandards.gov.uk/cgi-bin/glos/con1item.cgi?file=*ADV0030-1011.txt

I feel that they are wrong and I want to take it further. I am drawing up a complaint to the FOS but not until I give the company one last chance. I feel this looks good on my behalf.

 

I would really appreciate your comments/suggestions before I send it off.

 

What do you think. Have I got a case?

 

Thanks for looking

 

 

Did you get anywhere with your BNPl early settlement/refund of interest query that you posted a question about in 2013?

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No I didn't get anywhere. I put a complaint to the FOS thinking that I would win. However the FOS somehow deemed it to be a running credit account.

 

How the heck can it be a running credit account if interest is NOT added to the outstanding on a daily basis like a credit card, store card or overdraft, but is added in advance to the proposed date of settlement, Just like a loan .

 

The thing was that once Littlewoods found out that I was putting a complaint through to the FOS an offer of early settlement came through but it including absolutely everything including my interest free buys. I couldn't afford that so I had to wait for the FOS verdict.

 

It really is annoying when you feel that it is blatantly obvious that it is wrong but even the powers that be can't seem to see this.


Knowledge is Power

Go get em!

Have I been of any help to you? if so please click my scales to the left to enhance my reputation. Thank you. If not PM me.

 

Nationwide - won claim 

Advice & opinions of mahharg are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.

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