Firstplus £52k secured loan , paid after house sale but £5k extra charges added? - reclaiming?

[Surfer01]

Okay I have just checked my SAR again. In the T & Cs of the contract with Firstplus it clearly states the following;

 

We may from time to time vary our interest rate. We may increase or reduce our interest rate for one or more of the following reasons, namely to reflect a change which has occurred or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently efficiently and competitively.

 

On or about the 5th December 2006 we received a letter advising us that our interest rate will be increasing from 8.9% to 9.4% due to an increase in interest rates by Bank of England. This is clearly stated on the letter.

On or about the 14th April 2007 we received a letter advising us that our interest rate will be increasing from 9.7% to 10.2% due to an increase in interest rates by Bank of England. This is clearly stated on the letter. However not sure where the extra .3% came from?

On or about the 17th July 200 we received a letter advising us that our interest rate will be increasing from 10.2% to 10.5% due to an increase in interest rates by Bank of England. This is clearly stated on the letter.

During August 2008 we received an undated letter advising us that our interest rate will be increasing by 0.3% 10.5% as from 13/08/2008 but there is no mention of due to a change in interest rates by Bank of England. Later the same month we received a later advising us that due to the change to 10.5% our new monthly may will decrease from £68.78 to £69.63!

Up to now they have used the BOE as an excuse to raise interest rates as per what we were told when we took out the loan. suddenly when BOE rates fall the reason given is "increased underlying costs associated with borrowing and prevailing market conditions".

It seems that there is a very strong case under Unfair Terms in Consumer Contracts for us to pursue this in addition to yourselves as FP may have misled us regarding the interest rate and we are paying over the top. We also have the missing 0.3% increase that we were never informed about.

The loan was initially for £53000, but we paid off a large chunk however still owe about £4000. When we paid it off a large amount in Feb 2006 we were left with o/s balance of £5700.

The increases were all after Feb 2006 when we made the large payment and we would be claiming for the difference between 10.5% and what we feel the increase rate should be i.e if it went up from 8.9% to 10.5% based on BOE interest rates, correspondingly it should have fallen by the same rate.

Currently we are paying £70 per month regular as clockwork, but still have another 76 payments of £70 due or £5320 to pay. If we can reduce or even get rid of it, we would be very happy!

With regards to the UTCCR Regulations and guidance, the first point that stands out, underlines all of the above completely, "A standard term is unfair 'if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer'

 

Regulation 5

 

(1) Unfair terms are not enforceable against the consumer. The requirement of 'good' faith embodies a general 'principle of fair and open dealing'. It means that terms should be expressed fully, clearly and legibly and that terms that might disadvantage the consumer should be given appropriate prominence - see below.

However transparency is not enough on its own, as good faith relates to the substance of terms as well as the way they are expressed and used. It requires a supplier not to take advantage of consumers' weaker bargaining position, or lack of experience, in deciding what their rights and obligations shall be.

Contracts should be drawn up in a way that respects consumers' legitimate interests. In assessing fairness, we take note of how a term could be used. A term is open to challenge if it is drafted so widely that it could cause consumer detriment."

It also states

Regulation 7

(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.

(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12.

Regulation 10.4

“A term which merely says that variations will only be 'reasonable' or will only be made 'reasonably', is unlikely to be any fairer than one which contains no such qualification, unless there can be little doubt in a reasonable consumer's mind as to what sort of variation, broadly speaking, such wording allows, and in what circumstances. Where the criteria of reasonableness are vague, or clearly meant to include the best commercial interests of the business, there will be scope for the supplier to change the bargain unfairly to the detriment of consumers, simply on the basis that he needs to protect his profit margins."

 

Using UTCC do you think we would we be able to claim for the difference in interest rates in a small claims court?

[Surfer01]

To cut a long story short.

 

In Nov 2004 we took a consolidated loan for £53,000 with Firstplus over a period of 15 years

as at the time I was fit, working and aged 55 years. Wife was 52 years old. Repayments were about £600 per month.

 

This meant the loan would finish in 2019.

 

We have paid off the majority of the loan as we had to sell up,

but there is still £4000 outstanding which is being paid off at £70 per month and will run until 2019.

 

However both the wife and myself would have been "officially" retiring on state pension next year,

however at moment due to disabilities we are on Pension Credit and the £70 payment is a PITA.

 

If we were fit and well and retired in 2014 as originally planned,

surely FP should have been aware of this when they offered us the loan

and would have known that there is no way we would have been able to afford paying

in nearly £600 per month out of a state pension payments?

 

Could this be regarded as irresponsible lending and

 

is there anything we could do as we have more than paid back the debt as it is only interest we are paying?

[BRIGADIER2JCS]

Hi,my guess is that the terms/conditions of this loan would be that the signatories had to be under retirement age at the inception of the loan.

[Surfer01]

Hi,my guess is that the terms/conditions of this loan would be that the signatories had to be under retirement age at the inception of the loan.

 

Thanks. It seems that with many loan applications, if you are aged between 60 and 65 and the loan term runs into your "retirement" age, the loan will not be granted. We have excellent credit history, but cannot get a loan to pay off the debt earlier. The £70 is a PITA however we would rather pay £130 off the account over 3 years to get rid of it.

We tried doing this with FP, but after a couple of months they send you a cheque for the additional that you have paid in! We were hoping that irresponsible lending could help us clear the debt without paying in anything more.

[Surfer01]

Every 2 or 3 months we get a refund cheque from Firstplus for amounts varying between £30 and £80 because we have over paid the account. This very annoying as we are trying to reduce the interest on the account which ahs another 3 years to run. We are paying every 4 weeks £70 as after a settlement payment we were left with a £5900 outstanding in 2006.

How can we get around this as it is very annoying as we would like to be paying at least £140 or more a month. We tried this previously, but gave up as they would simply refund us. I am not sure if the money would stay in the account if we did not cash the cheque and the interest reduced accordingly or how they manage the account.

Can any one offer any advice? Thanks.

[estellyn]

Have you checked your terms as some mortgages don't allow overpayments.

[Surfer01]

It was a secured loan. We sold the home in 2006. I have emailed them for a settlement figure and the reply was that it will take up to 7 working days!

[estellyn]

It was a secured loan. We sold the home in 2006. I have emailed them for a settlement figure and the reply was that it will take up to 7 working days!

 

Yes, some secured loans state that they don't allow overpayments.

[Surfer01]

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