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Close Brothers: missed a payment om insurance 'loan' now got a default

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Hi - not sure which forum this belongs to so will try here.

 

Firstly (I say this first to make the situation clear)

 

I deliberately did NOT sign a contract with these guys because I didn't agree with the terms.

 

I was sent reminders to sign all the way up to the date of the first DD..

 

and then they duly took the first and subsequent DD payments without the agreement signed.

(What is this type of contract called where some basic terms are implied by the exchange of money? "Implied Contract"?)

 

this is for car insurance.

 

My favoured insurance broker uses Close Premium Finance for payment installments via a credit agreement

- they get the money upfront, you pay 5 monthly installments to the creditor.

 

My final instalment of £47.51 didn't go through as I didn't have the funds.

This was on 16th October.

 

On 18th October I receive a default notice dated 17th now claiming £77.51

because of an added £30 fine as per the "agreeement" (which I didn't sign).

 

Several days later they tried to take this from my account by adjusting the Direct Debit amount.

 

I should say here also that I did not sign a Direct Debit agreement either with Close Brothers

but only gave my bank details to the insurance broker for this purpose as part of the data

they needed to enable payment by installment on their system.

 

The default notice gave me until 6th November to pay this increased amount (the total called "arrears")

or they would terminate the "agreement" (which I didn't sign..) .

 

I still didn't have the money until this week

- am self-employed and had a backlog of invoices to send out and be paid -

and also busy so made no contact or payment.

 

Today I received in the post a letter saying they have terminated the "agreement"

and are threatening to demand the remaining six months' insurance premium from the insurance broker

and pay themselves the arrears, now increased by a further £15 to £92.

 

If they do this,

they will both cancel my insurance,

get £150 odd back from the insurer

and take their £92 (and return £58 to me from what I understand).

 

Yet I'm only £47.51 short of the full amount (£315 I think total - some £70 odd was paid direct to the broker upfront).

 

I'm at a loss as what to do as I don't know where I stand!

 

I have a few questions:

 

- I did not sign the agreement deliberately so as not to be held to the penalties (they call them "fees" of course")

so can they even default me at all and does the Consumer Credit Act come into force for ANY loan,

whether you sign a contract with mention of it or not?

 

- Can a creditor default someone after just one day and without sending a notice of arrears first?

 

- By me allowing them to take the payments as scheduled and by them acting to take the money,

do we have a contract at all and if so what are the terms?

 

Can they automatically include their full terms or is it only a simple implied agreement of supplying the basic credit in exchange for the scheduled payments?

 

- Have they violated Direct Debit rules by both not getting me to sign a mandate explicitly

and by then changing the amount from the schedule that was set out?

At no point had I agreed to or been informed of a variable Direct Debit.

 

- What steps can I take to prevent them from taking the remaining premium and paying themselves the fees?

 

Or better still stop them from cancelling my insurance with the broker? (although they've stated they've cancelled the loan?)

 

Any help would be much appreciated as I've no idea as to my rights here or what steps to take

(I realise thought the amounts may be trivial compared to some other's difficulties!).

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the 'penalty fees' are unlawful and can be reclaimed.

 

if they did not write to you BEFORE they took the varied amount

then you can use the DD guarantee [with your bank] to get your payments back..

 

however where this leaves your insurance policy is another kettle of fish!!

 

I think you'll have a hardtime fighting the 'default'

 

unless the dn was faulty.

 

many are mind

they must give you a date 14 days in advance of the date of the letter

 

in the format of DD/MM/yy

 

if not its not a compliant DN

 

dx

 

 

 

dx


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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Maybe they will argue that as you have been driving your vehicle with their insurance,you have accepted their terms (or accepted the terms of the contract).

If you had an accident,would you have claimed off this company.They might have said the policy is void,as no contract had been signed.But they still had taken money from you.

As DX has implied,it leaves your policy on very thin ice.

 

Regards,John.

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So you left a direct debit order in force and allowed them to take money from you for four months without complaint and now you are claiming you didn't sign anything ??

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I quite literally did not sign anything! This is not a claim but an indisputable fact!

 

Just because you allow a service to be provided in exchange for payment DOES NOT automatically mean you are bound by every term in a contract they'd like you to sign but don't agree with.

 

Just because someone or some company suggests some terms they'd like thrown in does not mean they must be accepted - this kind of thinking is what puts many consumers in an unnecessary bind and I'm surprised to read a user of CAG thinking this way..

 

Even when a contract HAS been signed, quite often many terms deemed to be unfair (e.g. as dx suggests) are not binding.. but you're suggesting they are all binding when a contract has not been signed??

 

What we have in place is some kind of implied contract of basic terms, a simple contract made by continuing action. There's a regular term for it but can't think what it is..

 

Maybe they will argue that as you have been driving your vehicle with their insurance,you have accepted their terms (or accepted the terms of the contract).

If you had an accident,would you have claimed off this company.They might have said the policy is void,as no contract had been signed.But they still had taken money from you.

As DX has implied,it leaves your policy on very thin ice.

 

Regards,John.

 

Sorry, you have the wrong end of the stick - I probably didn't explain it clearly.

 

I have no issue with the insurer nor the insurance.

 

Part of the insurance (about 3/4) was paid for by a loan from Close Premium Finance (a company of Close Brothers).

 

It is the loan payments I didn't keep up by missing the final payment.

 

Now they have said they've cancelled the WHOLE loan on the basis of one missing payment - not just asking me for the arrears but saying they will take the whole loan back - not sure exactly how they would do this but that's what is implied.

 

Any normal loan would just chase for arrears hence it's a confusing and opaque situation. I'm sure part of the contract terms would give them my authority to cancel my insurance with the insurer on my behalf ... but again, I didn't agree to that specific term so they would NOT have my authority to do so and so if they know they don't have my authority but claim they do, that would be fraudulent.. however they may believe they do and so would be simply mistaken.

 

I would have paid the arrears and sorted it out but they charged a fee on to arrears immediately and that is a violation of the Consumer Credit Act - a company is not allowed to add to the arrears a cost incurred because of the arrears itself, only for chasing the arrears or a consequence of the arrears, it's written plainly in the Act Section 86? 88? one of the two I think.

 

But does the Consumer Credit Act apply if its only an implied contract?

 

the 'penalty fees' are unlawful and can be reclaimed.

 

if they did not write to you BEFORE they took the varied amount

then you can use the DD guarantee [with your bank] to get your payments back..

 

however where this leaves your insurance policy is another kettle of fish!!

 

I think you'll have a hardtime fighting the 'default'

 

unless the dn was faulty.

 

many are mind

they must give you a date 14 days in advance of the date of the letter

 

in the format of DD/MM/yy

 

if not its not a compliant DN

 

dx

 

Do you mean the date to pay the arrears must be 14 days after the default notice?

 

 

That they kind of did but the "arrears" was not just the arrears but arrears + a fee,

a fee I didn't agree to and as you say would have been an unlawful anyway.

 

Or did you mean that they must give you notice of being in arrears 14 days prior to a default notice?

This they did not do.

 

 

The very first letter was a default letter,

sent just one day after the DD failed.

 

 

And I thought that many DDS were re-presented 3 days after failure anyway.

.. yet they appear not to want the payment but instead looking for an opportunity to add a fee first and foremost!

 

As I say above, they most definitely have violated the Consumer Credit Act by adding the fee as part of the arrears amount.

 

And aren't they required to tell you how to remedy the arrears after two issued payments before issuing a default?

 

 

This default was instant the first day into arrears and then only by one issued payment..

 

I guess I'll try to speak to the insurer and see if the loan company can really claim the loan back 5 months later

- problem is you just get lay people on the phone who don't know consumer rights and just tell you what they do,

not what they SHOULD do, no matter how legally incorrect those actions might be

 

 

.. the insurer doesn't want to end a beneficial arrangement with the finance company over consumer rights issues of a minority.

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right lets nail things down as your terminology is getting me worried.

 

 

did they send you a default notice under section 87

and it must state that explicitly

 

 

or was it just a letter mentioning the word default simply informing you?


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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I quite literally did not sign anything! This is not a claim but an indisputable fact!

 

Just because you allow a service to be provided in exchange for payment DOES NOT automatically mean you are bound by every term in a contract they'd like you to sign but don't agree with.

 

Just because someone or some company suggests some terms they'd like thrown in does not mean they must be accepted - this kind of thinking is what puts many consumers in an unnecessary bind and I'm surprised to read a user of CAG thinking this way..

 

Even when a contract HAS been signed, quite often many terms deemed to be unfair (e.g. as dx suggests) are not binding.. but you're suggesting they are all binding when a contract has not been signed??

 

What we have in place is some kind of implied contract of basic terms, a simple contract made by continuing action. There's a regular term for it but can't think what it is..

 

 

Sorry, that was poorly written. I accept you didn't sign anything, but to make payments unchallenged I think you will have no hope of saying you didn't want it especially as you also used the product.

You can't have it both ways.

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I did want it which is why I allowed the payments to go through.

 

However, that is completely different to those payments signifying you agree to every single clause in a contract you haven't signed - all it means is you agree to a basic exchange (you allow them the money, they provide the credit with their profit making fee which was about 15% on the remainder of the premium).

 

It's like a verbal agreement when a contract hasn't been drawn up. If the company will only do bussiness if ALL the small print is agreed to, then it must wait for the contract to be signed before they take the money.

 

Think of it the other way around - they are taking my money without a contract and agreeing to provide me with credit without the terms being agreed to by myself. Therefore they are demonstrating they are completely fine about that.

 

In a contract, the two parties are of equal standing - they agree to take my money and provide the credit without the signature, I agree to pay them the money in exchange for the credit without agreeing to other,s finer terms.

 

What you seem to be portraying is that one should automatically assume and agree to an unequal and unfair bussiness relationship whereby you must meet all their terms and assume they're entitled to ignore your rejection of their terms? That they can do what they want even when you don't sign a contract? That's the wrong mindset for consumer rights and advice in my opinion and teaching the opposite is kind of what consumer advice should be all about.

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right lets nail things down as your terminology is getting me worried.

 

 

did they send you a default notice under section 87

and it must state that explicitly

 

 

or was it just a letter mentioning the word default simply informing you?

 

This might be redundant now but thanks for the question (which I didn't get around to answering sooner..). Annoyingly I can't find that default letter at the moment but it did mention a default under the consumer credit act but might not have specifically said section 87.

 

Anyway, the reason the question is redundant in my personal case (although might be interesting more generally) is that I received a letter from the insurance broker themselves telling me I could pay the missing final payment to them directly, bypassing Close Brothers completely. This I did.

 

So with no penalty fee paid at all and ignoring Close Brother's demands, since paying the broker directly I've heard nothing AT ALL from them..

 

In essence their threats and demands for payment of the penalty was all BS and essentially harassment. I'm going to follow up on reclaiming the bounced direct debit charge from my bank (£6) due to the breach of the Direct Debit Guarantee.

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Premium credit pull this stunt too

 

 

I phoned and questioned them.

 

 

they backed down as soon as I said the default notice was non compliant

and the FCA did not 'give them permission'

to charge any fee as they claimed on the phone.

 

 

dx


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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Gah, charlatans..

 

It's a real shame that nice brokers (like Peter Best Insurance who I use - well, I've only had good experience with them but have never had to make a claim) use companies like this. Perhaps it's the only available solution for small brokers to provide payment by installments?

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I bet your email wasn't checked. I also think you don't use internet banking. The document in which stipulates the terms of your agreement were probably sent via email, there is such thing as digitally signing as well. And DD's and whole host of other things can be dealt with quite easily via internet banking.

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Old thread now


please don't hit Quote...just type we know what we said earlier..

 

if everyone stopped blindly paying DCA's tomorrow

the biggest financial industry in the UK, the whole DCA industry would collapse overnight.

 

 

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