Secured loan- Discharge Fee

[dori2o]

I am settling a secured loan with GE money, they have sent me a settlement figure, but the figure includes a discharge of security fee, i.e. the discharge of the charge over the property. The fee is £200.

 

I have been on the land registry website, and there is no charge for this service (discharging of a registered charge)

 

Would I be able to claim this back?

[buzby]

Not if it is part of their Price List and you agreed to it. Whilst the Land Registry doesn't charge, the paperwork has to be lodged by a competent legal person, and the LR only record the receipt of the document.

[gizmo111]

I am settling a secured loan with GE money, they have sent me a settlement figure, but the figure includes a discharge of security fee, i.e. the discharge of the charge over the property. The fee is £200.

 

I have been on the land registry website, and there is no charge for this service (discharging of a registered charge)

 

Would I be able to claim this back?

 

 

Not sure on this but I have moved you to mortgages where you will be amongst people in the same situation.

[dori2o]

Not if it is part of their Price List and you agreed to it. Whilst the Land Registry doesn't charge, the paperwork has to be lodged by a competent legal person, and the LR only record the receipt of the document.

Readiong their term and conditions however, there is no mention of it.

It mentions I will have to pay the equivelant on 1 months interest, which they show on the breakdown as being the ERC.

 

However, does it realy cost £200 to sign/stamp a piece of paper and sent it to the LR?

[dori2o]

***bump***

[dori2o]

Right I have my letter ready to send once the loan is settled.

 

I'm not sure if it is right. I'm assuming I will not be able to use the FSA's argument regarding exit fees and will have to rely on the fact that it was not mentioned in the T&C's.

 

Plus the loan amount was for only £10k, so will be governed y the CCA1974.

 

Please amend the letter as needed.

 

All help appreciated.

 

Dear Sirs,

 

Account no 123456789

 

 

Following the settlement of my secured loan, and the FSA’s statement regarding good practice regarding exit fees, I now believe that the exit fee I paid is both unfair and unenforceable.

 

At the time I took out my secured loan on 02 November 2005 I was not informed of any exit fees upon settlement of the agreement.

 

I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. I was informed only of the Early Redemption penalty of 1 months interest, as per section 4 (2) of the “Conditions of the Credit Agreement.”

 

This states:

 

The customer may settle this agreement at any tie giving GEMHF written notice of their intention to do so and by paying the balance outstanding , plus a fee equal to one months interest on the balance outstanding on the day immediately before settlement.

 

However, when I settled my agreement on 03 May 2007 a “discharge fee” was charged of £200.

 

I have not, and have never, received information regarding this “Discharge fee”, either on the application, on the agreement or from the terms and conditions. None of these documents make reference to a “Discharge Fee”

 

I thus require a refund of the Discharge Fee.

 

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

I will give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or you do not respond positively, within this time period, I shall send you a letter before action giving you a further 14 days in which to reflect. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that, there will be no further communication from me and I shall issue a claim at the expiry of the second deadline.

 

Yours faithfully

 

[buzby]

Are you sure it wasn't mentioned? Any time a firm secures its loan (to protect itself) it makes sure you pay for the privilege, and this is so commonplace it invariably is built-in to the price schedule, unless noted as a 'service' charge on their lending tariff - so it might not need to be in their T&Cs, simply mentioned as part of the whole transaction. I asked around and the ballpark figure from a solicitor to serve a notice of amendment on the Land Registry is £120-£200 depending....

[dori2o]

I have copies of all the forms I completed when applying for the loan, have kept everything they ever sent in reference to the loan, and have a copy of the agreement and term and conditions, it is not mentioned anywhere.

[buzby]

In that case, Go for it!

[dori2o]

Any help with this letter appreciated

 

Dear Sirs,

 

Account no 123456789

 

 

Following the settlement of my secured loan, and the FSA’s statement regarding good practice regarding exit fees, I now believe that the exit fee I paid is both unfair and unenforceable.

 

At the time I took out my secured loan on 02 November 2005 I was not informed of any exit fees upon settlement of the agreement.

 

I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. I was informed only of the Early Redemption penalty of 1 months interest, as per section 4 (2) of the “Conditions of the Credit Agreement.”

 

This states:

 

The customer may settle this agreement at any tie giving GEMHF written notice of their intention to do so and by paying the balance outstanding , plus a fee equal to one months interest on the balance outstanding on the day immediately before settlement.

 

However, when I settled my agreement on 03 May 2007 a “discharge fee” was charged of £200.

 

I have not, and have never, received information regarding this “Discharge fee”, either on the application, on the agreement or from the terms and conditions. None of these documents make reference to a “Discharge Fee”

 

I thus require a refund of the Discharge Fee.

 

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

I will give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or you do not respond positively, within this time period, I shall send you a letter before action giving you a further 14 days in which to reflect. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that, there will be no further communication from me and I shall issue a claim at the expiry of the second deadline.

 

Yours faithfully

[bornskint58]

I have the same ongoing issue with this company and you are correct in that this £200 is not mentioned anywhere in their Terms and Conditions.So in actual fact this discharge fee could have been any figure that they felt obliged to charge us.Did they also charge you an Early Repayment Charge.

[dori2o]

yes they charged an ERC, although this was detailed in the t&c's.

 

However looking at the information from your PM, I can see that this may be invalid also.

 

Thanks for the advice.

[dori2o]

One thing i did note from your thread is that your loan was agreed under the 1974 CCA if this is the case then you should not be paying an ERC of 1 months interest have a look at rules 94.95,96,97 and 173 of the act

 

Most residential mortgages are regulated by the FSA, which requires a section in the Key Financial Information given to the customer, and also in the mortgage offer itself, describing whether and when any ERC may be payable, with a least three cash examples showing the range of charges that may apply. For mortgages that are regulated by the Consumer Credit Act (CCA), it is doubtful whether ERCs can be charged at all because of the combining effect of sections 94 and 173(1) CCA.

The last two paragraphs are from an article in the mortgage gazette.

 

This is the advise I have been given, can anyone comment further.

 

I have read the advised sections of the CCA, but don't quite understand it.

 

Sections quoted below.

94 Right to complete payments ahead of time

 

(1) The debtor under a regulated consumer credit agreement is entitled at any time, by notice to the creditor and the payment to the creditor of all amounts payable by the debtor to him under the agreement (less any rebate allowable under section 95), to discharge the debtor's indebtedness under the agreement.

(2) A notice under subsection (1) may embody the exercise by the debtor of any option to purchase goods conferred on him by the agreement, and deal with any other matter arising on, or in relation to, the termination of the agreement.

 

95 Rebate on early settlement

(1) Regulations may provide for the allowance of a rebate of charges for credit to the debtor under a regulated consumer credit agreement where, under section 94, on refinancing, on breach of the agreement, or for any other reason, his indebtedness is discharged or becomes payable before the time fixed by the agreement, or any sum becomes payable by him before the time so fixed.

(2) Regulations under subsection (1) may provide for calculation of the rebate by reference to any sums paid or payable by the debtor or his relative under or in connection with the agreement (whether to the creditor or some other person), including sums under linked transactions and other items in the total charge for credit.

 

96 Effect on linked transactions

 

(1) Where for any reason the indebtedness of the debtor under a regulated consumer credit agreement is discharged before the time fixed by the agreement, he, and any relative of his, shall at the same time be discharged from any liability under a linked transaction, other than a debt which has already become payable.

(2) Subsection (1) does not apply to a linked transaction which is itself an agreement providing the debtor or his relative with credit.

(3) Regulations may exclude linked transactions of the prescribed description from the operation of subsection (1).

 

 

97 Duty to give information

 

(1) The creditor under a regulated consumer credit agreement, within the prescribed period after he has received a request in writing to that effect from the debtor, shall give the debtor a statement in the prescribed form indicating, according to the information to which it is practicable for him to refer, the amount of the payment required to discharge the debtor's indebtedness under the agreement, together with the prescribed particulars showing how the amount is arrived at.

(2) Subsection (1) does not apply to a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

(3) If the creditor fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

 

173 Contracting-out forbidden

 

(1) A term contained in a regulated agreement or linked transaction, or in any other agreement relating to an actual or prospective regulated agreement or linked transaction, is void if, and to the extent that, it is inconsistent with a provision for the protection of the debtor or hirer or his relative or any surety contained in this Act or in any regulation made under this Act.

(2) Where a provision specifies the duty or liability of the debtor or hirer or his relative or any surety in certain circumstances, a term is inconsistent with that provision if it purports to impose, directly or indirectly, an additional duty or liability on him in those circumstances.

(3) Notwithstanding subsection (1), a provision of this Act under which a thing may be done in relation to any person on an order of the court or the [OFT] only shall not be taken to prevent its being done at any time with that person's consent given at that time, but the refusal of such consent shall not give rise to any liability.

[bornskint58]

I think your best bet would be to complain to the Financial Ombudsman as this company is just a waste of time.I have, and am awaiting further details.The way i see it is, if the redemption fee for this Land Registry rubbish of £200 is NOT written in the terms and conditions then they don't have a case.The other issue is that an early repayment (not to be confused with the £200) fee can't be charged if the contract is under the consumer credit act 1974.I know these terms in the act are confusing but it appears that a rebate should be awarded not a type of fine for settling early.

All the best

[dori2o]

Can anyone advise what the limit on a loan is where the CCA no longer comes into force.

[dori2o]

New letter drafted, please look it over and advise if possible.

 

Dear Sirs,

I am writing regarding the fees that have been charged in respect of the early settlement of a secured loan I had with yourselves. The settlement was completed on 22 May 2007.

You have charged me:

a) An Early Settlement fee of £97.51. This is equivalent to one months interest of the outstanding balance of the loan.

b) A discharge of security fee of £200.

The agreement I signed (copy enclosed) was a Fixed-Sum Loan Agreement regulated under the Consumer Credit Act 1974, in the terms and conditions of the agreement it states:

4.(2) The customer may settle this agreement at any tie giving GEMHF written notice of their intention to do so and by paying the balance outstanding , plus a fee equal to one months interest on the balance outstanding on the day immediately before settlement.

It has recently come to my attention that an Early Repayment Charge (ERC) cannot be charged under the Consumer Credit Act 1974, due to the combining effect of sections 94 and 173(1).

s.94 Right to complete payments ahead of time

 

(1) The debtor under a regulated consumer credit agreement is entitled at any time, by notice to the creditor and the payment to the creditor of all amounts payable by the debtor to him under the agreement (less any rebate allowable under section 95), to discharge the debtor's indebtedness under the agreement.

(2) A notice under subsection (1) may embody the exercise by the debtor of any option to purchase goods conferred on him by the agreement, and deal with any other matter arising on, or in relation to, the termination of the agreement.

s.173 Contracting-out forbidden

 

(1) A term contained in a regulated agreement or linked transaction, or in any other agreement relating to an actual or prospective regulated agreement or linked transaction, is void if, and to the extent that, it is inconsistent with a provision for the protection of the debtor or hirer or his relative or any surety contained in this Act or in any regulation made under this Act.

Secondly, we come to the Discharge fee.

This fee is not mentioned in the Terms and Conditions of the agreement. I have not at any time, either before signing the agreement or prior to receiving the settlement figure been made aware that this charge would exist. I have read, and re-read the terms and conditions and this fee is not, at any time mentioned.

I have checked the fees charged by the Land Registry for the Discharging of a Registered charge, and they do not charge a fee for this service.

I feel this fee of £200 is a) unenforceable due to its clear omission from the terms and conditions of the agreement, b) could also be looked upon as a disproportionate charge, where you are charging me for something you effectively receive for free, and therefore does not represent the loss you have suffered in respect of the discharge of the charge that was secured on my property.

I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law.

I am therefore requesting a refund of the total £297.51 that you have taken from me in respect of these fees.

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

I will give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you dispute that I am entitled to a refund of these charges, I request that you forward within the above mentioned time scale, a copy of the Terms and Conditions that were in force at the time my account was opened, and any subsequent amendments to those Terms and Conditions. These are requested under CPR Pre-Action Protocol 4.6©, and failure to provide them will be brought to the attention of the court, should it be necessary to commence a county court action.

 

If you do not respond, or you do not respond positively, within this time period, I shall send you a letter before action giving you a further 7 days in which to reflect. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that, there will be no further communication from me and I shall issue a claim at the expiry of the second deadline.

Yours faithfully

[bornskint58]

Looks very good to me, its a shame you have not got a copy of your original terms and conditions as you can bet they will begin the stalling tactics. I kept my copies for reference and I bet they are the same ie at the time they were First National.Just for your info i think that amounts under £25,000 come under the 1974 CCA.

all the best.

[dori2o]

Here is my POC, can someone please check these out.

 

1 The Claimants had an account with the Defendant which was opened on or around November 2005 and settled on or around 22 May 2007. The account number was 0059019041.

 

2 Upon the settlement of this Account, the Defendant charged to the settlement figure

 

a)a Fee for Discharge of Security, a sum of £200, of which is not mentioned in any part of the Accounts terms and conditions.

 

b)An Early Settlement Fee of £97.51

 

3 The claimant contends that

 

a)As the Discharge Fee is not part of the contacted agreement, the fee is unenforceable, and is not intended to represent or relate to any alleged actual loss. The fee charged by the land Registry for the Discharge of a Registered Charge is £0.00

 

b)The contractual provision that permits the defendant to levy the Eraly Settlement Fee is unenforceable by the virtue of the Consumer Credit Act 1974, by which the Agreement is regulated.

 

4 Accordingly the Claimant claims the return of the amounts debited in respect of charges in the sum of £297.51.

 

I believe that the contents of the particulars of claim are true.

[bornskint58]

I have complained direct to the Financial Ombudsman about this, and they are currently investigating my complaint against GE Money.Even Dick Turpin wore a mask!!!!

 

All the Best

[dori2o]

what did you put in the complaints form to FOS, don't really know where to start.

[bornskint58]

Send in a copy of your original terms and conditions, and of course all the GE MONEY "hard luck your not having it back" letters of which you usually get.In my case the first one from Joe Bloggs, then the next one from Jim Bloggs, and another from Jane Bloggs.All of which are the same,all of which are just stalling tactics just to wind you up.Their complaints department have not got a clue, and were even quoting paragraphs that did not even exist in the Terms and Conditions.The bottom line is if its not written as payable on completion then we should not be charged.

 

All The Best

[dori2o]

OK.

 

It's a while since I updated this thread, but due to other more pressing problems this has had to take a back seat.

 

So I sent a couple of letters to GE in November and got their final response. I have now completed the FOS complaint form and I am ready to send it off.

 

Now, just before I do I want to make sure there is nothing else I need to do.

 

Does it make any difference if this loan was brokered through a third party?

 

Any advice would be helpfull.

[dori2o]

OK, Just thought I'dlet you all know that I got an offer through the FOS this week for the refund of the 'Discharge Fee' as the FOS agree that it was not included in the T&C's therefore is not enforceable. I should receive the £200 soon. The ERC is not refundable according to the FOS.

 

I have decided to accept the decision.

[jimbocw]

I have just made a final payment of a fixed term secured loan with Beneficial Finance, 2 weeks later I have received a letter from a solicitor acting on their behalf looking for a Discharge Fee of £150, there is no mention of this fee on my agreement can anyone help?