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

[Surfer01]

send Carol Vordaman an email, guilty by association!

Does sound strange that they have not responded, would of thought they would want their money.

Agree not paying installments would get their attention, soon hear from then!!!

 

I wish it did work that way. It would make these celebrities very wary of what they promote!

[Surfer01]

We were foolish enough to listen to Vordeman and took out a Firstplus (FP) loan for £53300 in 2004.

 

No PPI was involved.

 

After several months of paying nearly £600 per month, we realised that we would have been better off if we had not taken the loan.

 

We put the house on the market in June2005 and had a confirmed buyer by August.

FP then dragged their heels for about 5 months regarding the charge and the deficit and the house was eventually transferred on 22/02/2006

leaving us with a deficit of £5700 outstanding as they used Rule 78 for the calculation.

If they had used the current formula as recommended by OFT the deficit would have been a lot lower.

 

They refused to allow us to shorten the term and we have continue to pay £70 per month ever since.

In essence we have paid them about £4900, but still owe about £4300 with the term still to run another 7 years until I am 70 years old.

 

We never receive statements from FP unless you do a SAR costing £10.

 

At the moment I am on Pension Credit with the wife on ESA and likely to go onto Pension credit within the next few moths as she turns 60.

As this is an unregulated agreement I believe that they are not obliged to send statements.

 

We do not want to be paying FP for the next 7 years as we feel we have more than paid back the original £53,300 borrowed and that they have been very unfair in their dealings.

 

When the base aret went up they increased their interest rate, but when the base rate dropped they never dropped their interest rate.

Also not using the current formula as recommended by OFT in 2006 as put us at an disadvantage.

 

If we try and pay more into the account by increasing the payments, a few months later they send us a cheque for all the additional payments.

 

We are not sure of the best way to tackle this problem.

 

I have been thinking of raising a dispute regarding the interest rate,

the Rule 78 calculation plus it being irresponsible of them to allow a loan to run until I am 70 and the wife 65.

 

Also stopping monthly payment and hoping it will end up in court,

but we are scared of losing and then being lumbered with costs plus interest for the term we have not been paying.

Any suggestions please? Thanks.

[rebel11]

Hi Surfer

 

I'm sure they have to send you a statement regularly, it states that in the CCA 1974 (amended). Hopefully you've got evidence of you requesting statements and them ignoring your request.

[Surfer01]

I cannot find anything that states statements have to be sent out annually as the loan agreement is unregulated. The only thing I have been referred to is the Banking code which carries no status in a court of law. I thinmk I stand a reasonable chance of getting something out of them if I pursue it using Unfair Terms in Consumer Contracts Regulations stating that using Rule 78 was unfair and not been able to pay the loan off sooner is unfair etc.

[rebel11]

Heres some info: http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft140.pdf

[Surfer01]

When we sold our house there was a shortfall of about £5007 which we have been paying off at about £70 per month since May 2006.

 

However I am on Pension credit due to low income and disability with the wife on ESA higher rate and the £70 is getting a bit of a pain to pay.

 

We also feel that FP stitched us up by using the old style calculation when working at the original settlement amount in 2006.

If they had used the current method the shortfall would have been less than £3500.

Currently we still owe about £4200 with another 7 years to run.

 

Ideally we would like to drop the payment down to about £30, but are concerned about interest and still paying after 2019 when the current contract us due to finish.

 

I am 62 at present and wife retires in 3 years time in April 2014.

Surely it was very irresponsible under the Unfair Terms Act etc for them to authorise a contract knowing that we would both be retiring in 2014 although the repayment contract ran until 2019?

 

When we were able to pay extra, FP would refund the balance back to us to keep us locked into the 180 month contract interest rate.

even if we could FP will not reduce the length of the contract.

 

BTW last year we asked for a settlement figure and they have consistently refused or not to supplied one.

 

Do we have any grounds for challenging their decision under the Unfair Terms regarding the length of the contract

and when it is finishing plus them using the old style of calculation for the settlement figure back in 2006?

 

In addition, they increased the interest rate with BoE but then never reduced it.

 

The original figure borrowed was £53,300 and they have had this back plus a huge chunk of interest.

At the moment it seems we are paying mostly interest with very little coming off the capital amount of the £5007.

 

To date just on the £5007 we have paid close to £4700!

 

At the rate we are going by 2019 we will have paid back nearly £11,400 on the £5007 debt more than 100%!

 

What if we just stopped paying and allowed it to go to court.

 

My wife may be getting a small inheritance and we don't want to give most of it to FP especially after their treatment to us!

[Surfer01]

Pity no answer on any of my questions above. FP still have not supplied a settlement figure even though it was requested in writing twice.

[assisted blonde]

I am sure that they do have to provide you with a settlement figure I am not a mortgage expert but i assume you are paying compund interest? I would never tell anyone to stop paying but I think a visit to CAB could be of use to you or if you have one a visit to a soliocitor who gives pro bone advice at certain times.

It does seem a shame that noone has more usful info for you prehaps a different sub forum might help ask the site team.

[Surfer01]

I have told them that I am withholding, not refusing, payments until they supply an up to date statement and a settlement figure. Seems to be the only way to get their attention. After all I have sent two letters to them in the past couple of months but no reply!

[Surfer01]

We have a non-regulated loan with Firstplus and are in a position to pay it off however FP are playing hardboil and are not supplying this figure.

 

We requested it twice in the latter part of 2010 and when it was not received it was escalated to FOS who then contacted FP.

We received a letter from FP stating that we would receive the settlement figure within a week. This never materialise.

 

Unfortunately due to circumstances I never chased it up and let it lapse however we continued to make monthly payments of £70. The outstanding balance is £4500.

 

Recently I emailed them and advised that we would be withholding this month's payment until we had received a statement as we had not had one for over 2 years.

In addition, we also requested a settlement figure and until this was received no payment.

Our concern is accumulation of interest as on the £70 we pay each month, the interest is over £39 a month! I think the APS is about 10.5% per month.

 

In initially after selling our home the balance was £5500 in February 2006 as FP used the old method Rule 78 to get a settlement figure which we felt was unfair.

 

From June 2006 we have been making regular payments of approximately £70 per month.

In total we have made payments of approximately £4900 up to date.

All we want to do is get rid of this debt!

There is still just over 7 years to run on it!

Can any one offer any advice?

[citizenB]

You should revisit your complaint with the FOS. You will have to start a new complaint, but refer to the previous FOS reference.

 

It is pretty clear that they are making a lot of profit in respect of the interest and is the reason they dont want to give you a settlement figure.

 

This would almost certainly be classed as "not treating you fairly"

 

Perhaps before you contact the FOS, make one more attempt at getting FP to treat you with a little less contempt.

 

Give them 14 days to respond to your complaint (or provide you with a final response letter) .. bullet point the actions you have taken so far and advise that if they continue to refuse to provide a settlement figure then you will be asking the FOS to look at having FP refund the interest that you would NOT have had to pay had they let you settle earlier.

[citizenB]

Further to above, whether you email or write - you should send either to the CEO or his deputy.. or both ?

[Surfer01]

Further to above, whether you email or write - you should send either to the CEO or his deputy.. or both ?

 

No idea who the CEO or his deputy is, buy they probably will not be in good mood after yesterday's shareholders meeting!

[Surfer01]

On 03/11/2004 we took out a joint loan with Firstplus for £53300 with repayments of £527.74. APR at the time was 8.9% with monthly interest rate of 0.716.

Estimated term was 180 months.

 

On 01/02/2006 account stood at £52764.02.

 

As we had sold the home on 20/02/2006 Rule 78 was used to calculate the settlement figure.

Interest of £27332.85 was added bringing the total to £80096.87 less part settlement rebate of £25971.44.

For this we were charged a fee of £60 leaving a balance of 54185.43.

 

The transfer went ahead and £48411.79 was paid leaving a balance of £5773.64 still to be paid.

 

However on the 01/03/2006 they added on interest of £237.16 bringing the amount up to £6010.80.

 

Apparently this interest was for part month of February

however the puzzling part is that normally when getting a settlement figure it is valid for a month.

 

As we were in financial difficulties we were unable to continue to make payments until 31/03/2006.

We then made a payment of £100 in June 2006 but by this time the interest had increased the amount to £6004.28.

 

On 01/01/2007 account stood at £6129.04 as we had made a few payments amounting to 379.76 but interest for those months was £438.42

 

From 01/01/2007 we have been able to make regular payments each month of £70.

 

Since the 20/02/2006 we have made payments in total of £4975.43.

At present the statement balance is showing as £4549.11!

 

In November 2010 we asked FP for a settlement figure and this was never supplied.

 

In April 2012 we requested a statement and settlement figure as we had not received a statement for over 2 years.

 

Initially we were supplied with only a statement but then later a settlement figure.

 

The settlement figure was calculated as follows;

Total amount payable under the agreement £6693.73

Less our rebate on early settlement -£2064.60

Plus administration charge £150

Total amount payable by you to settle as at 30/05/2012 £4779.13

 

Surely the above settlement figure is incorrect as the current statement balance shows at £4549.11.

We have no idea where they got the figure £6693.73 as the original agreement was for £53300 less the Part settlement figure

and other incidentals which then left a balance of £5773.64 on 20/02/2006,

 

Firstplus have been up to now very obstructive with supplying a settlement figure

and previously the FOS had to intervene to get them to supply a settlement figure in November 2010

and Firsplus still never supplied the settlement figure.

 

To avoid escalating interest costs we carried on paying

 

however last month, we advised that we will be withholding payment until we had received a statement and a settlement figure.

 

We have now received this but are gobsmacked at the high settlement amount.

 

All we want to do is to get rid of this debt but without being ripped off!

Do you think the settlement figure is correct and fair?

[ims21]

Hi

 

Have you sent a SAR or do you have ALL of the statements for the account?

 

ims

[Surfer01]

I have done a SAR and now have all the statements. I have copied the lot onto a Excel spreadsheet and on doing various calculations determined how much we had paid and when etc. I was under the impression that a settlement amount should be derived from the current outstanding balance and not a fictional figure grasped out of nowhere or a figure relating to the original loan. The settlement figure just does not make sense!

[ims21]

Hi

 

Forgive the questions but it is a bit tricky without the actual paperwork in front of me.

 

During the period where you were paying about £70 per month, what was the monthly interest amount being added to the loan?

 

ims

[Surfer01]

Approximately £40! Interest rate or APR is supposed to be about 10.5% per annum. How can the settlement figure be nearly £200 higher than the current balance at 01/04/2012?

[ims21]

Hi

 

Well the best I can do is to suggest that the settlement figure is calculated as the current balance of £4,549.11 plus their admin fee of £150 plus two months interest at (as you said) approx £40 pm.

 

This totals to £4,779.11.

 

How they have presented the figure to you would appear to be to project the total payable on the shortfall amount right up to the end date of the agreement including interest (should it run its full distance) and then rebate the interest which hasn't accrued yet (less two months interest at approx £40 per month).

 

ims

[Surfer01]

I was under the impression that a settlement was worked out on the balance less the rebate and not the original loan amount. As it is they specifically state;

The amount required to repay your existing loan is as follows:

 

"Total amount payable under the agreement £6693.73"

 

The original loan was for £53,300, but it is my guess that if they use this figure the debt may disappear. Surely you cannot select a random a figure and then decide that the figure is the figure to use.

In February 2010 the settlement figure was £5689.97 and now it is £4779.13 as all they have done is add on the £150 to the current balance. Paying £70 for just over 5 years will equate to the current balance on the account. Although I am not an accountant the settlement figure does not look right.

[ims21]

Hi

 

Well we know that the balance on the account is £4,549 as is evidenced by the statements which show the £70 payments made and the £40 odd interest charged each month.

 

What I am suggesting is that to settle that balance they are adding the £150 admin charge and two months interest.

 

In view of the large reduction you made, the amount payable under the original agreement is far less than was originally planned and I reckon they have have projected forward the reduced amount (following the large reduction) to the end of the agreement, shown you what would be payable on the reduced amount had the loan run its full term and then shown you the interest that has not yet accrued which is described as the rebate.

 

They won't base the settlement figure on the original amount borrowed in view of the large reduction made to the account.

 

Whichever way, the settlement figure comes out to about the £4,700 mark.

 

The only way to get a detailed breakdown as to how they present their figure is to ask them for it but the way I see it is there is a balance on the account as of now (which can be properly accounted for i.e. balance plus interest less repayments) and then there is an admin fee of £150 and what looks like two months interest to take you up to the end of May 2012.

 

ims

[Surfer01]

In November 2004 we took out a loan for £53300. We sold in February 2006 and repaid £48411. There was still an outstanding balance of £5773. We have been paying approximately £70 per month since then to pay off the balance. Adding up our all our credits to date shows we have paid a staggering £87887. That is Eighty seven thousand and eight hundred and eighty seven pounds! We still owe about £4400 to settle the account! On the outstanding balance alone we have paid £5168!

I wish there was some way we could get rid of this debt. The last payment is due in November 2019 6 years after we are on state pension! Surely some mis-selling going on because as pensioners how would be have been able to afford a repayment of nearly £600 per month?

Edited March 15, 2013 by Surfer01

[Happyhippy1959]

Nothing surprises me with Barclays First plus, there is the clue in the name, BARCLAYS, now with the LIBOR fixing [problem] this company is going to get hammered, keep your eyes peeled have a look on the First plus forum this is disgruntled First plus borrowers they are looking into legal action against Barclays for the fixing scheme.

 

I had a first plus loan, but after my marriage breakdown I just handed the keys back to the 1st chargee and walked, told First Plus they could whistle for there money, I have my BR money saved and have never been so well off in a way, I have paid my unsecured creditors who managed to supply a valid CCA and kept the account a small sum, ( not many could comply ) so from spending £1,130 on a house and £640 + outgoings on debt and working everyday God sent I am now down to a nice rent and £40 payment towards the few creditors who could comply. I have me two days off and my health is much improved. NEVER AGAIN WILL I GO INTO DEBT FOR ANYTHING. I am in my mid-fifties now and yes I was silly, took massive debt on mainly for my self employed business I had. I have been since 2012 such a happy bunny now, not rich at all but at least I have food money and utility money without having to rob some other. I push bike to work.

 

I would certainly take a long hard look at your contract and if it were me I would tell FP to jog on, but that is entirely up to you.

[rdm2006]

I would SAR them to see if they have added any late payment fees or other charges you could claim back

[Surfer01]

I would SAR them to see if they have added any late payment fees or other charges you could claim back

There are 3 bounced DD charges amounting to about £75 but hey ho that is my money!