British Gas 10 year Boiler Loan - Mis-sold to Non-English speaking Parents?

tw0tw1nz

Hi guys I need some serious help here, please read.

Just to fill you in with some background details, my parents are Chinese and their English is very poor. My brother and I were born here so naturally we speak the English language. At the time (2005) when this "agreement took place, we were not at home as we were attending university. My parents are now Pensioners on pension credit guarantee.

So it was in 2005 when we needed a boiler replacement and contacted British Gas. A representative attended the property and sold a boiler to my parents which costed £3344.06. They were told they could pay this on monthly instalments and were quoted £59.23 p/m (I'm reading it off the agreement form). They thought it was really cheap at the time without realising the term of the agreement was for 10 years and were so shocked when I told them this. They believed it was a 5 year agreement or so.

Even on the agreement form itself, it does not explicitly state the cost of borrowing this amount of credit. It was a 19.5% APR agreement, with a £55 acceptance fee at the start, followed by 120 monthly payments of £59.23. This works out to be £7,162.60 which is absolutely crazy. This means that cost of the credit is a staggering £3,818.54 which is more than the boiler is worth in itself!! :mad: There was no way my parents would have accepted this agreement if they had known this in the first place

Their English is so poor (even today in 2010) that there was no way, 5 years ago, that they could have possibly understood the terms of the agreement. They were clearly vulnerable customers and the sales representative should have acknowledged this at the time and perhaps should have made a further appointment with the presence of a translator or something.

This loan came to light about 2 years ago when I called up to enquire about the outstanding balance. To my absolute disgust, I found out that, 3 years into the loan, the outstanding balance was MORE (yes more) than the initial credit borrowed (apparently due to charges for missed Direct Debits). At the time, I didn't know who to turn to or what we could do about it because my parents had signed the agreement. I was so shocked that I'd even asked the lady on the phone what we could do about it and I recall her saying something along the lines of "just overpay more monthly to reduce it". I thought that there was nothing more we could do and so we'd left it.

That was until recently a friend recommended MSE website and told me about similar stories about other loans being mis-sold etc. and thought I'd post up and ask for some advice.

I want to know if a loan agreement was taken out when my parents could not possibly have clearly understood the terms of it, does it make the agreement void? If so, do we return the boiler and perhaps be entitled to a refund of all payments since the agreement is invalid? I really don't know. What are my options here guys? Clearly I feel like I have been ripped off! I really hope you guys can help me please.:(

[Deleted User]

The reason the cost for credit was so high is that it was for 10 years,I`m not sure what you expect really,you seem to think it was mis-sold and that BG should have gone back when someone else was present,but maybe your parents should have had someone look into the agreement before they signed it?they seem to have had enough understanding to get in touch with BG to supply a new boiler...
Anyway you have 2 options,they can as they have been told overpay each month to pay off quicker and save some interest,or they could request a settlement figure and pay it off in one.
What you cant do is return the(well used)boiler and expect a refund of all payments made.

tw0tw1nz

Thanks for your reply Woodbine.

I don't remember how we got in touch with BG, but it was certainly not my parents who did. With regards to your point about they should "have had someone look into the agreement before they signed", think about if it was you who had no hot water and in a country where you didnt speak the language very well...would you wait longer, or would you accept the boiler to be fitted ASAP with seemingly "reasonable" monthly payments at the time?

Anyways, that's sidetracking a little. So our only options are to carry on with the agreement basically?

CLAPTON

your parents' children could help their parents pay the loan off early; this would avoid a lot of interest.

Clive_Woody

I would also suggest they try and make sure their direct debits are paid on time in future to avoid further costs.

With your parents both retired I doubt they would be able to get a loan at a lower APR to repay the loan that way. Overpayments seems to be about their best option.

tw0tw1nz

Clapton - So this is how you boost up your post count? By posting something we don't already know? Must take note of that.

Thanks Clive Woody.

CLAPTON

tw0tw1nz wrote: »

Clapton - So this is how you boost up your post count? By posting something we don't already know? Must take note of that.

Thanks Clive Woody.

I didn't know you already knew about the CCA rules for early settlement .. your previous post seemed to indicate you didn't but there you go.

Dick_Van_Dyke

The OP's parents spoke enough english to get british gas out, discuss the options with them, purchase a new boiler, decide to make it on credit , make payments until now etc etc

The only time there english is suddenly of concern is when the son wants a lower rate and the rate is probably fair given what the OP has posted.

Clive_Woody

!!!!!!_Van_Dyke wrote: »

The only time there english is suddenly of concern is when the son wants a lower rate and the rate is probably fair given what the OP has posted.

Fair because they do not speak English?

If I found my parents had been sold a deal like this I would be equally outraged. British Gas are well know for overpricing their goods and services and in particular targetting people who aren't savy enought to shop around (have a look on the Quotes boards if you do not believe me).

The APR isn't exactly that surprising, but a 10 year term for paying for a new bolier seems particularly long.

ALIBOBSY

Well I would start with a written complaint, they were vunerable and given BG's tactics in the past with other people (both cases seen online, on tv and friends and family) it is highly likely they were both taken advantage of and ripped off by the original salesman.

I would start with a written complaint, stick to the facts and point out that they were vunerable.
Given the fact that they are a few years into the "loan" BG will have more than covered any costs and likely have made a profit off them already.

I would do a written complaint and await their response, but in the meanwhile keep up with the payments to avoid further damage to the credit report.
You could also look into requesting the original agreement to see how valid it was in itself, but I feel from the sounds of it the ombudsman would not be very happy with the original "sale" anyway.

Part of the conditions of having a credit licence involves protection of the vunerable and ensuring any borrower understands fully the agreement they are entering into - the oft guidelines are very explicit (many companies flout this and have been repeatedly wrapped on the knuckles and fined by the FOS over these issues).

Good luck
ali x

System

So op was born in uk is at university and even after 20 ish years parents cant speak english ?