Capital one Irresponsible lending ?

[Wisey]

Hello, 

 

 

I do apologise if this is in the wrong please. i haven't posted for a while.

 

I have a friend who has a capital one credit card.

When she applied for it she had some basic questions, employment status etc.

She is long term sick on ESA and PIP. 

she made them aware of this by ticking the unemployed box.

They offered her a £200 limit initailly. 

 

She has had the card for around 2 years now and had small increases since having it.

However the latest credit increase is £1,600!

Which is in no way sustainable to pay back, she has almost reached the limit on it and is no worried about repayments.

They have given her a payment holiday due to covid -19 but even still they add interest onto it.

which is defeating the purpose of the payment holiday.

 

I was wondering if irresponsible lending could be considered here, as they were well aware of her financial situation yet had no issues giving her a massive limit. 

 

Any advice on how to go about this is greatly received. 

 

Many thanks. 

 

[dx100uk]

if she has managed to date to pay the required monthly amount....

they will regularly up her credit limit because they have proof she is able to properly manage her credit.

 

don't think she will get far trying to claim IRL here IMHO.

 

she needs to write to them (and all her other creditors?) with our pro rata letter offering a reduced sum as long as they freeze int and not charge unlawful fixed sum penalty fees.

 

dx

 

 

[Wisey]

Hello dx 

 

Thanks for ur reply. 

 

I did wonder. 

The last linit she had was £600. So to wack it up to £1,600 was quite a hyke. 

 

She was maintaining repayments with the smaller limits  but has struggled since even selling things to make a payment or cutting bak on food. 

 

She has 2 snall kids under 10 so she cant really cut back to much. What reduced sum should she offer. 

 

What is worst case scenario on this should she not be able to repay. Shes blind worries about DCAs, courts etc. Iv explained the best i can about it to try calm her but theres only so much reassurance i can give her given her mental health.

 

 

[dx100uk]

its a consumer debt, don't forget dca's have absolutely zero legal powers and are not bailiffs and never  can be.

 

she should not ever be cutting back anything to pay any consumer credit debt.

the original creditors cant do anything really but as they are duty bound and that is too HELP

 

they'll eventually sell the debt on to a DCA<10p=£1.. and they'll try and fleecer her.

 

have a good read in the debt self help forum

you'll get the idea.

 

she must have other debts on her credit file

better to look at the whole picture rather than ONE debt

 

[Wisey]

Apologies for such a long time to reply.

 

So Update.

There is more debts outstanding. 

 

She has applied to her local credit union for a debt consolidation loan.

They went over her income/expenditure etc.

 

Over alot of hmming and harrring they have agreed to the £3,500 applied for to Clear all outstanding creditors, so she can repay at a much better rate with fixed interest instead of mounting interest.

 

I spoke to the lady on the phone and she said that they want proof of the debts being cleared and proof of the accounts being closed.

 

My question really is can they ask her for that information??

I shall be insuring the debts are paid,

i can understand to a degree but account closure? 

 

she has always had 1 credit card in case of emergencies and if she has to close it, it may in the future be detrimental.  

 

Aside from that could she ask capital one for a full and final settlement figure?

balance currently owed is £1592,

she said that she tried to offer them £1400 as full settlement but they didn't seem interested.

She is currently on a payment holiday for 3 months.

 

Other debts owed Vanquis bank £215

Paypal Credit £1475 ( also on a payment holiday)

 

Plans are to clear these in full.

 

[dx100uk]

woe slow down..why is she getting more credit to pay off the existing...?!?!?!?

 

paypal credit, is this just a paypal negative balance or she took out paypal credit itself?

if so I bet that's with paypal EU not a uk creditor so stuff and all they can do to her.

 

vanquis is peanuts at £215 offer then £5PCM

she doesn't need a loan

 

dx

 

 

[Wisey]

Its paypal credit. Like a credit card but an online  credit balance.  

 

Shes opted for that because they wont drop the interest so itl just be piling up.  How would she find out who the paypal credit is with? 

 

She realy didnt know what else to do. 

 

ok it says :

Credit is offered by PayPal (Europe) S.à.r.l et Cie, S.C.A which is duly licensed as a Luxembourg credit institution and is under the prudential supervision of the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier.

[dx100uk]

yep luxy, so not covered by UK laws..

and it doesn't show on UK credit files..

 

so just arrange a small payment to vanquis say £5PCM

and 

one with Cap1

 

use the pro rata letter..

 

please never ever take out credit to pay credit, cause it's always sOOO tempting to run it up again

that's why CU wanted proof of closure.

 

dx

 

[Wisey]

so are u saying not pay paypal?

she hasnt signed for the credit loan yet,

she just thought it was the best idea.

to pay off all debts that kept wacking on fees and then repay them at £40 a week

 

She just looked at her credit file and paypal IS showing on it.

showing as Paypal (europe) Sarl et Cie SCA

[dx100uk]

thank you ....1st time anyone has ever bothered to investigate this EU paypal credit

we know paypal credit card (which is newday a registered UK creditor) showed.

but to date no-one ever question PP credit sarl..

 

is there a FCA number on the agreement at the bottom

or are they showing on the FCA register as a licenced creditor??

 

keep going

dx

 

[Wisey]

Ok i googled https://www.fca.org.uk/firms/consumer-credit-register

 

I put in paypal and it only shows 

PayPal europe services limited. 

 

FS register start date is blank 

Current status is Lasped. 

 

Is this the right one?  No other paypal entries

 

I cant find an FCA number anywhere.

 

https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000Mg3m1AAB

 

 

Well ... nuts...

It says EEA registered.  

[dx100uk]

so do the same with them

offer them a pro rata payment.

 

there is no evidence anywhere that PP SARL have ever issued a court claim, though i'm pretty sure paypal credit has not been around long.

 

she should be fearful of additional charges.

penalty fees for being late/not paid/overlimit are unlawful.

and can be challenged.

 

if you read the pro-rata letter you can also see they are duty bound to help, which inc's refraining from charging interest and penalty charges going fwd.

 

dx

 

[Wisey]

I assume that middle part 

 

" she should be fearful of additional charges.

penalty fees for being late/not paid/overlimit are unlawful.

and can be challenged. "

 

I guess u mean shouldn't not should? And is a typo? 

[dx100uk]

hehe one of my favourite mistypes too..

 

dx

 

[Wisey]

 

Haha XD 

 

Earlier in the thread i asked about if the credit union could ask proof of the closure of the accounts. 

 

I have been in the union with her today to have an informal chat with the rep. 

 

We have read over the credit agreement 

Which only states that they are or would loaning her money for the purposes of paying the creditors listed ; x;y;x ... 

 

And then a secton that says i (name) promise to pay the sum etc of £x per week on x date for the next x amount of weeks until final selttlement date of x/22. 

 

Now nowhere on the agreement was anything about needing to send in proof of closure of the accounts. (I read it twice, im very thorough.)

 

She has requested extra time to think about it ( i have passed on your above info) but sadly i cannot force her to action it. 

She has since asked me as she has 2 dependents  under 10 would they frown upon her should she accept the loan  BUT close all but ONE of the credit accounts just in case of emergencies. 

 

---For example if she is paid monday but its friday and hasnt anything left and she needs to put fuel in the car to get somewhere such as a hospital/Dr or to merely  buy milk. Worst case. ---

 

 

She asked me if she thought if she kept the one with the least credit limit amount ( vanquis limit £250.) The others are £1500 and £1600.  Would they be funny about it. Or what could they do if she did do this.

 

My opinion is that the choice is ultimately hers but since their is no legally binding clause on the agreement that states she has to close them is there anything they could do? So long as they are getting their repayments? 

 

- Wisey 

[dx100uk]

Credit unions view themselves as a cross between a responsible lender and a debt management company.

 

That stance is an oxymoron and conflicting at best.

 

but both would agree that paying off high int credit with a lower int source..saves money, however, latterly running up the very cause of the need of the loan, would be financial suicide.

 

can they enforce that, ..of course not

 

but why do anything in the 1st place?

Use the prorata route and that results in no int whatsoever! As the creditor MUST be seen to help under fca rules..freeze int...stop penalty charges.

 

Much cheaper!!!

 

DX

 

[Wisey]

So in short no they cant make her close it. 

 

I wil do my best to convince her to do that Dx but of corse like all things i cant force her only advise.

 

[dx100uk]

but they don't need any reason to void a loan made under the consumer credit act..

which hers will be...

 

she is already protected by the act, why sign another agreement 

[Wisey]

You understand this. i understand this. but others not always that way inclined.  void a loan?? sorry i dont follow.

[dx100uk]

cancel then..