Arrears with Secured Idem Loan

[Gram1]

Hi

 

Sorry in advance this is so long winded.....

 

I have a secured loan with Idem. (originally with Picture Loans, but when they went bust it was bought by Idem several years ago)

 

I have permanent 0% interest on the loan, as agreed originally with Picture when i got into financial hardship with them, and after some initial difficulties with Idem (when they tried to add interest back onto the balance when they took it on), this frozen 0% interest is now carried forward also by Idem. They acknowledge it and the balance now reflects it.

 

My balance owed to Idem is approx £40k and everything i pay each month comes directly off that balance due to the zero interest. So i do have hope, and can see light at the end of the long tunnel in terms of eventually paying this off.

 

I have been making reduced payments for several years due to financial circumstances. The original contractual monthly payment from the Picture days was over £650. When Idem took over the loan i was paying them as little as £120 pm. After 2 years now of regular monthly payments (all agreed with Idem every 3 or 6 months), i am now up to an agreed payment of £500 pm, having gradually been able to increase this over the years. Great progress i believe. Especially as all the payments are coming directly off the balance owed.

 

My main issue surrounds the arrears balance. Because my payments are still under the original £650 contractual payment, my arrears balance has been growing and growing throughout the years of my reduced payments. The arrears balance is now approx £20k. However my query here, is that the interest is permanently frozen, and the contractual payment of £650 was based on the original interest rate of approx 14%. So the original contractual monthly amount now bares no correlation to the monthly amount required to settle the remaining balance on time. eg - I have 8 years term left on the loan, which is £40,000 / 84 months = £476 per month required, to settle the loan on time. So i am basically already at the the monthly level required to settle the loan on time. So surely the £650 pm contractual requirement, is no longer relevant, in terms of my requirements here.

 

If i continue paying £500 pm i will settle this loan early. If i pay what they are asking as the CMP (contractual monhtly payment) then i will settle this loan over 1 yr early. And all the while that i continue to pay the £500, my arrears balance increases. It looks terrible on my credit file.

 

 

I have asked them to wipe the arrears, due to the zero % interest, as they are no longer applicable to the amount owed vs the term remaining. However all they see is a piece of paper with a large amount of arrears on it, and a monthly payment which is less than the CMP on the account. So they will continue to put pressure on me to increase my payments up to £650, and then they will probably ask me to start contributing extra to the arrears. I'm not in a position to do this, or likely to be in the future, however i really don't understand why i should, even if i was.

 

I have asked several times recently about capitalising the arrears, but they refuse point blank, saying they can't as it isnt within their policy, and would basically mean refinancing, which they wont do.

 

So should i just accept that my arrears balance will continually increase, despite my good intentions and work in getting back to where i am now? Even though the loan is likely to be paid off early at the current level. It is very stressful knowing my payments are less than contractual and that i need to renegotiate payment plans every 3 months, each time i do this they mention the level of arrears. I'm worried they take further steps due to this high number. Even though the number really in my opinion, is no longer a relevant aspect of this.

 

My ideal scenario is to be able to have the arrears balance cleared to zero, and agree with them a new monthly payment amount that clears the balance owed in the term remaining. ( i believe this is effectively what capitalisation is??) That would remove the stress of the huge arrears figure, greatly improve my credit file going forward, and give me huge stress relief from knowing the account was under permanent control with no more worry about negotiating new agreements every 3 months or worrying about potential further action on the arrears. Is there anything i can do to make them see sense over this? Or any other options i haven't thought of?

 

Sorry i have rambled on here.

 

Any help, thoughts, or advice is very welcome.

 

Thanks

[The Phantom]

I would have normally suggested to try the FOS route for this, but after my recent experience with Idem and the FOS I'd now say don't bother.

Are you actually getting any annual account statements to make sure your balance is coming down as you think it should ? (Thinking fees and charges etc) so that when you think it is paid off they laugh and present you with a huge -yet to be paid - account balance ?

That is my worry with them.

But as you are not paying any interest , just the capital I can;t see why they cannot accomodate your requests.

Have you tried making a complaint through the FOS by any chance ?

[Gram1]

Hi. No, haven't been via FOS yet. My requests for wiping arrears has all been verbal so far. i suppose i would need to put it in writing and get their rejection in writing before going down the FOS route.

 

I regularly request a balance figure and also you can view it online on their website when you login now, so i can see that it is coming down as expected. I also check this with them every time i speak to them, for piece of mind, and they confirm too.

[The Phantom]

To be fair, you could put a written complaint in to their Customer Service Department and outline what you would like them to do and why.

See how they respond when you do things in writing.

When they eventually provide their final response it should say you can refer it to the Financial Ombudsman Service.

The FOS will only accept it if IDEMs final response letter has that ending or if the complaint hasn't been resolved within 8 weeks from your initial written complaint.

You may find that IDEM intentionally leaves that specific wording off their letters at the end (they did in my case). In that case you have to wait for the 8 week period before you can refer it to the FOS.

I would suggest you are very specific and clear in your own letters as to what the issue is and what you would like IDEM to do to resolve it. It will help later when you send it all to the FOS, the easier it is for the initial adjudicator to understand what the issue is, the better.

To me it appears a lot of them are under a lot of pressure and rush things and do not read complaints properly and just want to close things off as swiftly as possible, so the simpler and shorter you can make it, the better I think.

But try and start a written complaint and see what they say.