Cahoot at it again

Rafter

Unfortunately these interest rates are way off the 'extortionate' levels that a court would consider unreasonable.

Those customers still with cahoot are also victims of the diminishing quality of the loan book:

As the good customers transfer away as rates rise, what is left is poorer quality customers, or those like some of the above who do not have transfer options.

So those who have no option, end up subsidising those poor quality customers who default on their loan repayments.

With hindsight, 6.9% was probably too low on Cahoots part. With hindsight, taking out variable loans was a mistake when the credit crunch hit and other loan options disappeared.

There are a lot of people with secured loans in the same boat.

All those customers are effectively subsidising all those low rate fixed mortgages that now look incredible value, and it will take several years before they have all repriced.

R.

Neillgb

dhassen wrote: »

I'm on the flexi loan and got the email of doom yesterday. I got the loan in June 06 - the rate was 11.5...... they raised it to 12.9, then 14.9, then 19.9 and now it's on 21.9!!!

I'm going to ring them up to ask why..... almost double the rates in 2 years is a bit much! I found it interesting that last month I payed off 6K of the loan, and now they put the rate up. Thought it might be just for me but looks like it's not

Abbey stink

Maybe they need to raise more funds to buy the Alliance and Leicester

Looks like their policy is to try and raise interest up as much as possible without pushing people over the top and defaulting judging by this post. By that i mean they are afraid to push people that are too close to their limit.

I have a Virgin card with 0% period up in feb. Hopefully i will have enough credit on that to sort mine out.

It would be interesting to see what they said if somebody actually called them and said they could not afford more than 15% and would be unable to pay if they did not reduce rate. I recently got them to cancel a £25 fee(as a result of their 2 to 5 day period to credit account from post office) by giving them grief on the phone.

I also got the Abbey loan scam last year which just happened to be 19.9%!! Same as the Flexi loan strangely!!!

chambta

I guess when taking these loans out many people didn't consider the likelihood of rates being raised in such a manner.

This was always the only ace up Cahoot's sleeve and they're playing it. Sadly those customers with better credit ratings or savings will repay, leaving those struggling customers to bear the brunt of it.

dhassen

Yea... thankfully I'm in a good position now..... if they had done this a year and a half ago though I'd be totally screwed. They can shove their 'un-profitable product' and all their other products as far as I'm concerned! lol

Rafter

For anyone caught out by Cahoots policies it might be worth trying to pursue a 'treating customers fairly' claim.

Although not fully in force yet, I think the financial ombudsman might look favourably if you make a claim that funding costs for Cahoot have not increased dramatically and that you have a good payment record and therefore increasing the premium on your loan about 5 times above base rate as when you took it out is unfair.

R.

minimike2

Not really im afraid.

The terms and conditions set out that it is a variable rate loan and it doesnt state that they cant increase it beyond a certain point or for no reason.

_Andy_

Whilst it's not ideal for the consumers involved, I fail to see what's 'unfair' about a company varying the rate on a variable rate loan product.

dhassen

It may not be legally 'unfair'........ but doubleing interest rates in two years is slightly extreme....... it's a rip-off......

Some people would be crippled by these increases.

_Andy_

Extreme or not, there was always the option to take a fixed rate loan - most unsecured loan products are.
If you're going to take the risk of a variable rate product then it's no good complaining afterwards when the rate changes.

dhassen

Strangley, some people can't get a fixed rate loan, or if they can will only get a very high rate, meaning they are either stuck with the current product or stuck with a different, expensive product.

Somtimes it is good complaining. CC companies put their interest rates up occasionaly and put them down again when you complain.

If your mortgage rates doubled, or payments on a car or your gas bill doubled, I'm sure you'd complain too.