Secured Loans & Variable Interest Rates

adtheblue

One of the reasons FirstPlus no longer take new loan applications is because they were being investigated by the FSA in respect of their selling practises for PPI. Most people who have taken out a PPI policy with Firstplus will be entitled to a full PPI rebate.

You need to write to Firstplus and when then refuse to refund you, write to the Financial Ombusman Service who will force FirstPlus to pay you compensation.

The initial rates they gave customers used to be subsidised by extortionately high PPI premiums. Now that they cant sell anymore PPI policies, they are making up the lost income by putting their rates up.

Unfortunately, they can do this as it says in their Credit Agreements you signed.

Make sure you get your money back on your mis-sold PPI, this should help to cover the increase in repayments.

Good Luck

himnme

Have a peep at http://firstplus-loansharks.ning.com/ - I've put up a link to the Which? PPI Reclaim service. It's free and it generates a letter for you to send to Barclays Firstplus to get either the entire PPI refunded and interest rebated or just claim the interest you have been and will be charged for the policy for the entirety of your loan if you are fortunate enough to have had the "Cashback" element of these worse than useless policies.

Reddh_Legend

Thankfully we now possess more relevant information regarding our situation. I was invited on to the BBC Moneybox programme to raise the issue and their compliance expert has been looking at the FP ts and cs re interest rates. The conclusion is that the nature of the bargain is so one sided in terms of FP and they have proven it by their actions, that in fact the term should be deemed unfair under UCCT regs. As it stands the term could deem the loan unenforceable. These are the words of legal experts not me.

Do we have the evidence..of course, just look at their accounts. Historically they have maintained a £40 - £50m difference between their interest income ( that they get from us) and interest expense ( that they pay to Barclays on their own loan which is linked to bank of england base). Their funding costs have dipped but they have decided not to pass these reductions on which means that to Dec 08 ( and remember rates did not dip to 0.5% until Feb so the gap now is even larger) they had increased this gap to some £94m. THIS IS THE REASON WE HAVE HAD NO DECREASES NOT THE EXCUSES THEY PUT OUT RE HOUSE PRICES ETC.

They are no longer in receipt of huge commission incomes from the sale of PPI products (this dropped from £94m in 2007 to some £20m in 2008) and clearly they have tried to recoup these costs from somewhere. As may be pointed out their terms are not illegal but Unfair Contract Clauses are about fairness and not legality.

To quote from my dialogue with the FSA

With regards to the Unfair Contract Terms guidance you pointed me
to, the first point that jumps out, underlines all of the above completely,

"A standard term is unfair 'if, contrary to the requirement of good faith,
it causes a significant imbalance in the parties' rights and obligations
arising under the contract, to the detriment of the consumer'- Regulation
5(1). Unfair terms are not enforceable against the consumer. The requirement
of 'good' faith embodies a general 'principle of fair and open dealing'.1 It
means that terms should be expressed fully, clearly and legibly and that
terms that might disadvantage the consumer should be given appropriate
prominence - see below. However transparency is not enough on its own, as
good faith relates to the substance of terms as well as the way they are
expressed and used. It requires a supplier not to take advantage of
consumers' weaker bargaining position, or lack of experience, in deciding
what their rights and obligations shall be. Contracts should be drawn up in
a way that respects consumers' legitimate interests. In assessing fairness,
we take note of how a term could be used. A term is open to challenge if it
is drafted so widely that it could cause consumer detriment."

It also states,

"10.4 A term which merely says that variations will only be 'reasonable' or
will only be made 'reasonably', is unlikely to be any fairer than one which
contains no such qualification, unless there can be little doubt in a
reasonable consumer's mind as to what sort of variation, broadly speaking,
such wording allows, and in what circumstances. Where the criteria of
reasonableness are vague, or clearly meant to include the best commercial
interests of the business, there will be scope for the supplier to change
the bargain unfairly to the detriment of consumers, simply on the basis that
he needs to protect his profit margins."



The latter point is one that FP can now no longer refute. Their lack of desire to debate this on air speaks volumes.

The FSA are now passing my case to the OFT where I am lead to believe I am not alone in complaining about this interest rate term (which seems strangely similar across the secured loan arena).

The firstpluscomplaints website is growing in numbers, we are pressing regulators, we are pressing FP and with the media interest in our cause growing, feel as though we can now start to apply serious pressure to the lender in question.

No matter what anyone's opinion is on loan be they secured or unsecured, it does not fundamentally matter. This clause allows a one sided bargain and has been evidenced in formal actions which has lead to the position we now find ourselves in. I have looked for evidence to support the stance of FP and take a balanced view but their accounts show they are now classified as a GOING CONCERN by the auditors, Barclays have had to give written confirmation of support for another 12 months. Barclays have put £9m in to keep liquidity levels solvent and the accounts for the first time make reference to the commissions it has received formally as a business, commissions regarded as "secret" and litigation is under way. This is a business in trouble whose only recourse to additional income is through those customers tied into them by contract and thus teh breach of UCCT regs is clear and will be proven.

halifax71

A year on (and a day) from my original query and i'm still fighting. As a refresher my complaint is Firstplus' ability to pass on all rate increases but not decreases. This has resulted in an 80% reduction in costs to Firstplus and a 20% increase in my APR - so far.

Got ongoing complaints with the Financial Ombudsman and the OFT.

The FOS finally gave me their adjudication (rejection obviously) and i have sent a long detailed reply requesting referral to the Ombudsman. Copy on FirstPlusComplaints website.

The FOS are basically toothless but i was really surprised when the adjudicator wrote "we would not consider whether the terms and conditions of your account were or were not unfair"

What is the point in the FOS then?

The OFT are the ones that need to rule and i have finally got their acceptance that it is their responsibility despite their initial insistance that it wasn't. Anyone unsure here should refer to the concordat between the FSA and the OFT.

As a reminder i would urge all secured loan customers to take on board my warning that if your terms are as one sided as FirstPlus' and as a result you have not benefitted from the recent interest rate reductions then be prepared from rate increases when interest rates increase over the next year or so.

My calculations are that once rates return to the same level as when i took out my loan, i.e. FHBR of 5% then i will have an 18% APR as opposed to 8.4%.

Any FirstPlus customers need to seriously check the status of their account.

jonesMUFCforever

The FOS is independent of the lender and its customers.
You have taken your grievance to them and they have found against you - so now you change stance to say what is the point of the FOS and how it is toothless - does sound to me like sour grapes!

I did say in my original post what you should have done is move the loan to another provider.

halifax71

And i've asked you not to bother replying to any of my posts. Please refrain from doing so.

For the sake of others i have not changed my stance. I complained that the terms of my loan are unfair and in breach of the Unfair Terms in Consumer Contract Regulations. The FOS have now said they won't look at that. If i had known that 8 months ago i wouldn't have even bothered complaining to them.

The same complaint is with the OFT who are now charged with deciding if they are in breach. The evidence against them is, in my opinion irrefutable.

shafted_fpc

jonesMUFCforever wrote: »

The FOS is independent of the lender and its customers.
You have taken your grievance to them and they have found against you - so now you change stance to say what is the point of the FOS and how it is toothless - does sound to me like sour grapes!

I did say in my original post what you should have done is move the loan to another provider.

I originally posted this on the first plus rip of thread:-
Firstplus loans

let me put is simply Barclays Firstplus are a bunch of liars, and fraudsters, this is not opinion it is fact and it is stated as fact in the full and certain knowledge of its truth. Further more it is stated as such in knowledge of all disclaimers on this Website re liability, and that if BFP were to sue it would be me they sued.

I can say this with absolute confidence that there will be no effective action against me.

Why because I know they lied

for example in the Key facts doc they supplied with the loan re PPI they said “ no fee”
yet they took 70% commission, how do I know this because they had to pay the Taxman after first using an Eire based company to handle the sale of PPI in order to pay less tax.

The sale of insurance is meant to be done in utmost good faith they didn't sell in good faith and therefore apart from any claim re misrepresentation act 1967 in common law this is Fraud

They mis sold polices and 99% of complaints are upheld,

The contract terms where written in such a way as to maximise their earnings and hide the true cost to the customer, that is clause 12 re further advances, the use of rule of 78, and clause 7 re interest rates.

At the same time the loan was sold as affordable, reducing monthly payments etc, at best this was a half truth the clause re interest rates was always designed to ratchet up interest rates over the life of the loan, the use of rule 78n was always there to trap people in and the further advance clause was always there to rip people of on further lending which they would market to people, to the extent of doing it within the loan agreement.




dont know why my previous post was deleted the problem with switching to another lender however is that BFP use the outdated and punitive rule of 78, this is unfair.

the point re the terms are in my opinion valid, in the opinion of some complince managers valid as born out by the BBC radio show money box.

BFP sold PPI fraudulently that is a factthey sold on the basis of "no FEE" yet took a FEE or commission of between 40-80% this is born out by the key facts and their response to the competition commission.

I know that in my case they took commission of 70% on the sale of PPI

so I can say without fear of any effective legal action that they cheated me
I can say without fear of any effective legal action that they defrauded me.

In my opinion the terms are unfair, that I think is true and once someone challenges them or regulators actually regulate it will be shown to be true. BFP are really in my opinion using their muscle to bully people, trapping them with unfair terms and exploring the fact that they BFP have all the cash in the world to fight the claims thro the courts. the regulators know this and to an extent I believe this was a factor in the fairness issues re PPI being effectively sidelined by the narrower remit of the competition commission, in any case these issues are still unaddressed and I take my hat of to all those ready to address them, to all those willing to fight the bank that can take on the regulators, and whom the regulators seem to find to hot to handle.

shafted_fpc

Welshdresser wrote: »

WOW has anyone seen the new Firstplus customers website - it is awesome!!!
http://www.firstpluscomplaints.co.uk
Check it out and sign up TODAY

the site now has over 800 members
members are taking BFP to court
there is a Super complaint re interest rates been produced and put in
the site has helped people reclaim PPI
has kept people in there homes
has got a no10 e petition with over 500 sig
is in fact as you put it awesome
:T :T :T :T :T :T :T :T :T :T :T :T

shafted_fpc

I SAID
FIRSTPLUS = FRAUDSTERS

IT WAS EDITED OUT, I POST AGAIN MY REASONS and IT ISNT EDITED OUT
NOW MAYBE THAT IS COZ IT WAS IN BIG WRITING MAYBE NOT BUT HERE I SAY IT YET AGAIN.

shafted_fpc wrote: »

I originally posted this on the first plus rip of thread:-
Firstplus loans

let me put is simply Barclays Firstplus are a bunch of liars, and fraudsters, this is not opinion it is fact and it is stated as fact in the full and certain knowledge of its truth. Further more it is stated as such in knowledge of all disclaimers on this Website re liability, and that if BFP were to sue it would be me they sued.

I can say this with absolute confidence that there will be no effective action against me.

Why because I know they lied

for example in the Key facts doc they supplied with the loan re PPI they said “ no fee”
yet they took 70% commission, how do I know this because they had to pay the Taxman after first using an Eire based company to handle the sale of PPI in order to pay less tax.

The sale of insurance is meant to be done in utmost good faith they didn't sell in good faith and therefore apart from any claim re misrepresentation act 1967 in common law this is Fraud

They mis sold polices and 99% of complaints are upheld,

The contract terms where written in such a way as to maximise their earnings and hide the true cost to the customer, that is clause 12 re further advances, the use of rule of 78, and clause 7 re interest rates.

At the same time the loan was sold as affordable, reducing monthly payments etc, at best this was a half truth the clause re interest rates was always designed to ratchet up interest rates over the life of the loan, the use of rule 78n was always there to trap people in and the further advance clause was always there to rip people of on further lending which they would market to people, to the extent of doing it within the loan agreement.




dont know why my previous post was deleted the problem with switching to another lender however is that BFP use the outdated and punitive rule of 78, this is unfair.

the point re the terms are in my opinion valid, in the opinion of some complince managers valid as born out by the BBC radio show money box.

BFP sold PPI fraudulently that is a factthey sold on the basis of "no FEE" yet took a FEE or commission of between 40-80% this is born out by the key facts and their response to the competition commission.

I know that in my case they took commission of 70% on the sale of PPI

so I can say without fear of any effective legal action that they cheated me
I can say without fear of any effective legal action that they defrauded me.

In my opinion the terms are unfair, that I think is true and once someone challenges them or regulators actually regulate it will be shown to be true. BFP are really in my opinion using their muscle to bully people, trapping them with unfair terms and exploring the fact that they BFP have all the cash in the world to fight the claims thro the courts. the regulators know this and to an extent I believe this was a factor in the fairness issues re PPI being effectively sidelined by the narrower remit of the competition commission, in any case these issues are still unaddressed and I take my hat of to all those ready to address them, to all those willing to fight the bank that can take on the regulators, and whom the regulators seem to find to hot to handle.

jonesMUFCforever

Shame the Ombudsman does not agree with you - your only recourse now is to take legal action - do you have as a minimium £20-£30k cash available to guarantee your legal team's fees?
If you don't I think no legal firm would touch you.

And do stop deleting my posts - if you can't stand other people's opinions leave and close the door behind you.