Rule of 78 query re First Plus
Options
veridian
Posts: 5 Forumite
My first post...
Hi folks – I’ll give as much info as I can! – Yes its good old First Plus or UK Lending as I see they call themselves now – (like Guantanamo Bay re-branding itself as Cuban Secluded Sunshine Resorts!)
Anyway, I took out a FP loan for £60,000 in Dec 2003. They tried to sell me PPI, but I was astute enough at the time to realise that 14.6k insurance (plus int!) on a 60k loan was a total stitch up so I didn’t take it up. Just a shame I didnt ditch the whole thing.. hindsight yadda yadda yadda.
In June 07, I obtained a settlement figure of £62,091 but didn’t take it up, however we are now moving house and want to be rid of this loan. A settlement figure for Nov 09 is now £60,064. I rang them to ask how on earth this could be and was fobbed off with its a difficult arithmetic equation known as the Rule of 78. Having now done some research I see this has now been outlawed for all loans from 31/5/2010. However there seems to be a grey area as to whether because my loan is above 25k that this should be used at all!.
Indeed my original agreement says ‘You may settle this Agreement in full at any time in accordance with the Consumer Credit Act 1974, notwithstanding that this Agreement is not regulated by the Act.’
It then goes on to say I can settle in line with the ‘Consumer Credit (Rebate in Early Settlement) Regulations 1983 to which I am entitled’.
Interestingly I note my June 07 settlement letter actually includes a paragraph saying that The rebate as been calculated iaw the CC(RES) Regulations 1983, yet the one I received this week now only says the figure as been calculated iaw the terms and conditions in my loan agreement. It makes no mention of the particular acts. It’s disgusting that FP continue to operate in this manner despite this Rule of 78 calculation being in its death throws.
My question is:- Can I challenge the calculation method used on the basis that either a) My loan was never covered by the CCA 1974?
or perhaps b) that the Rule of 78 has been abolished and they should do the decent thing and recalculate it - Happy to hear any other suggestions you may have.
Further Info – Ive never been late with any payment. Im paying 10.8% - DAYLIGHT ROBBERY!. My current balance is apparently around 55,300 – yet their ‘total amount payable under agreement’ is approx 79,300 minus a 19,300 ‘rebate’ – meaning I still owe more than the original value of the loan some 6 years after taking it out Grrrrrr.:mad:
Thanks in advance!
Hi folks – I’ll give as much info as I can! – Yes its good old First Plus or UK Lending as I see they call themselves now – (like Guantanamo Bay re-branding itself as Cuban Secluded Sunshine Resorts!)
Anyway, I took out a FP loan for £60,000 in Dec 2003. They tried to sell me PPI, but I was astute enough at the time to realise that 14.6k insurance (plus int!) on a 60k loan was a total stitch up so I didn’t take it up. Just a shame I didnt ditch the whole thing.. hindsight yadda yadda yadda.
In June 07, I obtained a settlement figure of £62,091 but didn’t take it up, however we are now moving house and want to be rid of this loan. A settlement figure for Nov 09 is now £60,064. I rang them to ask how on earth this could be and was fobbed off with its a difficult arithmetic equation known as the Rule of 78. Having now done some research I see this has now been outlawed for all loans from 31/5/2010. However there seems to be a grey area as to whether because my loan is above 25k that this should be used at all!.
Indeed my original agreement says ‘You may settle this Agreement in full at any time in accordance with the Consumer Credit Act 1974, notwithstanding that this Agreement is not regulated by the Act.’
It then goes on to say I can settle in line with the ‘Consumer Credit (Rebate in Early Settlement) Regulations 1983 to which I am entitled’.
Interestingly I note my June 07 settlement letter actually includes a paragraph saying that The rebate as been calculated iaw the CC(RES) Regulations 1983, yet the one I received this week now only says the figure as been calculated iaw the terms and conditions in my loan agreement. It makes no mention of the particular acts. It’s disgusting that FP continue to operate in this manner despite this Rule of 78 calculation being in its death throws.
My question is:- Can I challenge the calculation method used on the basis that either a) My loan was never covered by the CCA 1974?
or perhaps b) that the Rule of 78 has been abolished and they should do the decent thing and recalculate it - Happy to hear any other suggestions you may have.
Further Info – Ive never been late with any payment. Im paying 10.8% - DAYLIGHT ROBBERY!. My current balance is apparently around 55,300 – yet their ‘total amount payable under agreement’ is approx 79,300 minus a 19,300 ‘rebate’ – meaning I still owe more than the original value of the loan some 6 years after taking it out Grrrrrr.:mad:
Thanks in advance!
0
Comments
-
Yes I believe that you are able to challenge First Plus in connection with the manner in which they have chosen to use the Rue of 78 to calculate your redemption figure. Interestingly, I have put a small group together to test this whole topic and believe that if you argue on the said on the basis of fairness plus look at the way your agreement has been worded you will have a strong case which will likely be up held. Moreover it is my further belief that the Ombudsman is now looking favourably on such cases which are being referred to them. Happy to include you in the group if you wish.0
-
veridian, our situation is almost identical to yours and I am currently trying to resolve it. Please let me know how you are getting on and I will do the same.0
-
Hi, I am new to this forum and have joined specificaly to seek advice on First Plus. We settled our account when we re-mortgaged a couple of years ago. We obtained a settlement figure, however when it came to getting an up to date figure for our solicitor to send off our payment they took an additional £3k, we did challenge this and received a long complicated letter stating they were legally entitled to, we are not simpletons but had no experience of dealing with such things and took their word for it, it is however reading through this forum that we realise we just may have been incorrectly charged. We had also taken out the Insurance with a cash back sum after 5 years if no claims had been made, has anyone else done this and again is this something we could look at claiming back although we did receive a a lump sum - not sure now ifthis was all we were entitled to.0
-
It can be challanged via section 140 of the CCA "unfair credit relationship", I believe and think there are other ways.
pragmatically anyone in your position may find it easier to wait untill May 2010 when it will be abolished completly0 -
I succumb to First Plus in 2004, for a loan of £55,000. As with previous posts I declined the offer of PPI. Over the past 5years now I have paid back £31,788 and yet a settlement figure I received last months says I still owe them £58,717. Details of the settlement below.
Total Amount payable under agreement £88,149.88
Less our rebate on early settlement £29,582.01
Admin Charge £150.00
I have enlisted the help of Cartel Client Review to look into the terms & conditions of the loan to see if its legal, this case has been going on for over 12months now & I was wondering if anyone had dealings or knew if others were successful?
Other things I have noticed with FP, I have never received an annual statement since having the loan. Is this right?
The interest rates are a joke and do not rise & fall with the BOE base rate, in fact the rates haven't changed for quite a while now & my payments went up in October and are roughly the same as they were 2 years ago before the credit crunch and all time low interest rates. Is this allowed???
Can I or should I be looking into all this more?0 -
Just found another source on this subject for any First Plus customers:
first plus complaints dot co dot uk
(new user so not allowed to post links).0 -
Signing in.....
I took out a 50k loan in May 2004 and repaid 52k in March 2007.
Total amount payable under the agreement: £81,423.01
Less our rebate on early settlement: £29,539.59
Plus admin charge: £150.00
Total amount payable by you to settle@ £52,033.42
I would like to claim the difference between a fair settlement fig and the one I paid, plus 8% interest from March 2007.
Currently looking for info...0 -
Wrote to FirstPlus asking them to refund the difference between the settlement figure I paid already, and what I deemed it to be, calculated using the acturial method. Letter sent.0
-
Firstplus replied, dimissing my claim. I have now sent an LBA.0
-
I am disputing the rule of 78 use due to timing and fairness. I have asked for clarification and let you all know - my solicitor has written to them today as they are completely ridiculous and unhelpful on the phone.0
This discussion has been closed.
Categories
- All Categories
- 343.7K Banking & Borrowing
- 250.2K Reduce Debt & Boost Income
- 450K Spending & Discounts
- 235.9K Work, Benefits & Business
- 608.9K Mortgages, Homes & Bills
- 173.3K Life & Family
- 248.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards