FirstPlus interest rates - again

halifax71

Just been reading Financial Ombudsman's site re: Interest Rate complaints. Their basis for complaints is summerised as: -

1. Was all the written or spoken information given to the customer about the interest rate clear and accurate?
2. Is any change in the interest-rate charging structure a fair reflection of a change in the underlying lending risk?
3. If an interest rate has been varied, has the law (and any relevant code of practice) been complied with?
4. If the interest rate was individually set for the customer, is there proper written evidence of how the rate was arrived at?

I have an issue with points 1, 2 & 4.
Point 1 - I was sold a loan at 8.4% APR which at the time was 3.9% above the BoE rate and 4% above LiBOR. My current rate is 10% which is 7% above BoE rate and 6.1% (i think) above LiBOR. The fact that they could charge me inflated rates was not explained.

Point 2 - I haven't missed or been late with a payment hence my risk is probably better than it was at the loan inception. The underlying risk of others defaulting surely can't be used as justification. Presumably some bean counter has worked out that by charging good payers more that more than offsets those that would default anyhow.

Point 4 - This is the most interesting point. I'll be asking FP for the basis to see what's changed.

Anyone else feel they are being taken for a ride?

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/57/57-interest-rate-complaints.htm

marshallka

I have posted the link on the PPI thread and thanks for bringing awareness to people of this..:beer:

steveuk36

Great post!!!
Our situations seem very similar.Same company,rates etc...I have written to First Plus and am waiting for a reply.(not holding my breath).

I was looking for someone/somewhere to complain too...Any suggestions?

halifax71

I'm in the process of drating my letter to First Plus but i'm also a bit busy studying for my ACCA exams this week so it'll probably be the end of next week when i actually finish it.

I started a discussion on this last month - see link

http://forums.moneysavingexpert.com/showthread.html?t=1270125

The limited response was that i didn't have a hope in hell of challenging. The questions posed on the ombudsmans site appears to confirm that there are grounds for complaint - whether a success or not is a different matter, but there do appear to be grounds.

In my mind FP need to: -
Justify the information given at application. I don't believe the current situation was detailed as a possibility.
Explain if my personal lending risk has deteriorated or whether i am being penalised due to others defaulting
And finally, explain the basis of lending me the money at a rate of 8.4% taking into account the market conditions at the time.

In addition i will ask them to reconsider the APR on my loan based on the above information and if they refuse i wil complain to the Ombudsman.

As i said on the other thread FP customers need to be worried as once BoE / LiBOR rates increase our loan APR will increase. They will suddenly start using the BoE rate as a justifiable reason.

ruthie70

When I spoke to the Ombudsman they said that the lack of clarity when applying interest rates by FP may well be grounds for complaint in itself. I am definitely writing to them along the same lines as you have written above - now they are no longer lending money it is worrying - how else will they make their money - yes, charge us astronomical interest!! This company are notorious for mis-selling PPI and all sorts and really need challenged. Let's do it....:j

steveuk36

Have just received my reply from FP. Absolute disgarce. Just what i expected to be honest.

Said they are not passing on the base rate reduction to customers at this time.

Basically told me if i don't like it i can either complain to financial ombudsman or call them to get a settlement figure.:mad:

Reddh_Legend

I agree they are a complete farce.

I have drafted the following having been given the brush off as Steve appears to have had. They are Barclays owned now, so have access to money at their market rates. I have future issues about this loan but know (as well as they do) that the equity and settlement terms mean that I along with most others, am stuck with what i have.

The fairness and the lack of clarity in the term gives me concern and will form the basis of my complaint but I do feel many voices need to be heard.

"
Thank you for your reply to my recent issue. As you state, the response from FirstPlus may not “be the answer I wanted”, however it is almost to the word exactly what I expected and it is this avoidance of the issue that concerns me.

As you state you have sold me a variable rate agreement and in the mortgage world this carries with it a certain meaning and understanding that First Plus know all to well. When you make your confirmations over the phone you do no more than mention that this agreement is variable rate and explain nothing more than that, which I feel mis-sells the agreement and its mechanism. My dialogue with yourself and others has clearly indicated a lack of understanding as I have had FHBR and LIBOR attempted to be thrown at me and a point blank refusal of any link with Bank of England base which has been the clear justification, as witnessed in letters, every time repayments have gone up.

This underlines the misuse of the term variable as the mindset of the public and myself would be that upward movement in Bank base would mean loan repayments increased. When rates move the other way, suddenly Bank base is nowhere to be seen as a measure used. My understanding, along with many I am in contact with, is that you carry a completely different perception of the term “variable”, are 100% understanding of how your rates will change, you know it is different to that of the population, yet do nothing to explain the nature in which your “variable rate” loan affects people. It is this lack of explanation that I feel breaches moral and ethical levels as this should be emphasised verbally at point of sale to make sure people understand. It was not explained to me and I would welcome copy transcripts of my sale process to clarify this. I would add at this stage that your introducing brokers have managed to corrupt their tape of dialogue with me, as confirmed when I challenged them about the mis-selling of my PPI. Be under no illusion that to simply say “you were aware of the terms and conditions when you signed the agreement” will in anyway be an acceptable excuse for, what in practise is proving, a blatantly unfair term.

Whilst you will not disclose the information, my guess is that people are enticed under an attractive APR, then over time are gradually moved into the 12 -14% APR banding and then are left there throughout the course of the agreement. I have yet to speak with anyone in a position where their APR is lower, or even close to where they started, irrespective of when their loan started. Interest rate cycles fluctuate, your business model will accept that, knowing that you have a chance to increase your return over time and hold your position when the cycles move down again, using the funder favouring term in the agreement. LIBOR and Bank base have dropped significantly this last week and what has been the response from First Plus…..I still await confirmation of the significant reduction in rate and payment that would be occurring under a fair agreement. As a Barclays Bank business, it continues to maintain its AA credit rating and you will no doubt benefit accordingly from that, when underlying cost structures are calculated.

The implication is that First Plus do not / did not do enough to explain how a customer will be affected over time through taking a variable rate agreement, as such the type of loan you offer, working in a completely unique manner, you should be obligated to do more to take customers through this not just hiding behind a vague and self supporting term, which is essentially what the reply from First Plus proved.

The clear fact is that First Plus are hiding behind this vague term stating that it can do exactly as it likes, not justify what it has done, not be prepared to evidence why it has behaved as it has done, nor prove the underlying rationale to what it has done and not accept that it offers something under the banner of an industry understood term – “variable”. This is based, as you state, on the fact that it can make any decision based on what it feels (“can reasonably expect to occur”) and increase its profit margin per deal throughout the course of an agreement (“ensure our business is carried on competitively”) thus rendering your term unfair.

As has been stated, First Plus has no further interest in dealing with this matter so copies of this letter and recent correspondence / investigation will be forwarded to FOS.

In the meantime, I welcome any feedback and offer of resolution from First Plus. I will gladly receive notification of significantly reduced interest rates in line with recent market changes, that you are applying across the board if my complaint is to be proven to lack substance and truth. "

I will amend my letter to make reference to the points from halifax 71above. My APR started in the 8s/9s and is now in the 12s with no sign of coming down and from what I hear, only going up!!!

kks

loan with FP, but was not aware could actually challenge that (sucessfully or not is another matter)
Will be starting to write letters from next week and let's see where that gets me..will keep updating:D

emmakirks

Hello,

I am ready to join up with the fight against FP and their interest rates! Had worthless conversation with them today with all financial info thrown at me and all past rate changes etc but still no answer as to wether a drop in rates will be happneing. Am also looking at getting ppi back early from them as think missold. I am not as adept in the language of finance as some here but am sure with a bit of cut and pasteing could put a letter together. Think first call will be to get FP to send me records of rates I have been paying as haven't kept all correspondance (but will from now on!). Not sure I will get anywhere with this, but it will feel good trying and also by reading everyone elses attempts as well.

AMILLIONDOLLARS

I think this information/topic should be given to BBC Watchdog, get some publicity for the cause!!

AMD

marshallka

emmakirks wrote: »

Hello,

I am ready to join up with the fight against FP and their interest rates! Had worthless conversation with them today with all financial info thrown at me and all past rate changes etc but still no answer as to wether a drop in rates will be happneing. Am also looking at getting ppi back early from them as think missold. I am not as adept in the language of finance as some here but am sure with a bit of cut and pasteing could put a letter together. Think first call will be to get FP to send me records of rates I have been paying as haven't kept all correspondance (but will from now on!). Not sure I will get anywhere with this, but it will feel good trying and also by reading everyone elses attempts as well.

For a price of £10 you can get all the information they hold on you in a subject access request. This way they would send out all your statements and also it may be proof of the misselling of the insurance too. They have 40 days to respond to you on this so a bit of a wait but like I say, it may the information you need for your complaints.

A template letter is here...

SAR - SUBJECT ACCESS REQUEST

Dear

Re: Account number:

In the first part under the Data Protection Act 1998:

Under the Data Protection Act 1984 and 1998, and including the right of subject access under these acts, please supply me with a complete list of transactions and charges relating to the above accounts held with you since they were opened.

Additionally where there has been any event in my account history over this period which has required manual intervention by any member of your staff or any other person, I require disclosure of any indication or notes which have either caused or resulted in that manual intervention or other evidence of that manual intervention in relation to my business with you.

If you are unable to supply data relating to manual intervention because there has been no such manual intervention then please be kind as to confirm this in your response to this request.


For the avoidance of any and all doubt, I reiterate:

I hereby request that you supply me with any and all historical data in your possession which, in any way appertains to me, including (but not exhaustively) a copy of the original signed executed agreement; statements of account; duplicate statements and/or print outs of all account transactions; all internal and external correspondence sent or received by you including memo’s, logs, notes, screen prints and transcripts; notes of manual interventions such as telephone attendants' notes, copies of stored telephone conversations, internal and external emails; any other information held on any/all types of media in any relevant filing system (microfiche included).

If you have disclosed any information to a third party (with or without my express permission), will you please include details of this in your reply, along with notes of any legal action passed or pending (to include a true copy of default notices, court orders and the like).

Where any information that you provide includes any charges, for example returned payments, late payment fees, and so forth, would you please advise your breakdown of actual costs (liquidated damages) incurred for each charge, and the Term or Condition on which you rely upon to claim such a charge.





I also require that you forward, within the above mentioned time scale, a true 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.

I enclose the statutory maximum fee of £10.00 to access ALL data held by XXXXX about myself. You should be fully aware of your statutory obligations under the Data Protection Act and that any failure to comply with this request will involve a complaint to the ICO as well as potential legal action.

You have 40 days in which to comply with this request.

This communication has been sent Recorded Delivery so I can ensure compliance on these issues within the legislative timeframes.

Yours Sincerely