Help for loan!

robc184

Hi,

I have a mate that is in a bit of trouble. Any advice would be welcome.

He's been out of work for 6 months and he has a loan with Sainsbury's and also loan protection insurance for the loan. He's been having problems with the insurance company (St Andrews Group) as they won't pay out. He's taken this up with the ombudsman and is waiting for their reply as they are being a bit slow.

In the mean time the company, Albion, that controls the loan on behalf of Sainsbury's has been threatening him with notices of impending legal action. He has notified them several times on the situation and the problems with the insurance company but they're not budging. Sainsbury's has also been notified and reduced his payments but that has not been communicated with Albion even after several phone calls and letters.

Anyway, what I would like advice with is what to do now, Albion want £900 and he has paid that on his parents credit card with a one month free interest to get rid of the impending legal action. He has just started a new career in the last two weeks and won't get paid till the end of August. He'll have to pay the current month payments so we've worked out that it'll be three months till he can pay off the £900.

I was thinking that he could get a credit card with interest free for 6 months to at least see him over the next few months for this £900 without the interest. I was hoping that he could do a balance transfer to pay off his parents. Is this a good idea to see him through the next few months until he hears back from the ombudsman?

Many Thanks,
Rob

GeorgeUK

The problem may be that he won't be able to get a credit card - it would also need to be one that allows money transfers as part of the promotion (super balance transfers).

Do you know how long he's had the loan?
Would he get more back if he reclaimed the missold PPI or would he get more out of it if the Ombudsman forced the insurance company to pay out?
(What has he made as the complaint to the ombudsmand for? Not paying out or that PPI was missold?)

I take it he has written letters of complaint, but i woudl send them to the head office rather than the complaints department. I would also point out that under the Office of Fair Trading debt collection guidelines, they should not be pursuing a debt that is in dispute. His debt is in dispute because the insurance should have covered the paments while he was out of work and didn't. While a debt is in dispute, they should not attemt to enforce any part of the debt - including adding interest and requesting payment.

See section 2.8
http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft664.pdf

Hannah_10

They can't take action on a debt that is in dispute! They know this too (the sc-mbags). Get him to have a slow careful read through of the rules the Debt Collection Agency are meant to be following. They are on this page, near the top click the blue bit that says "Dowload Debt Collection Guidance pdf 117kb" http://www.oft.gov.uk/about-the-oft/legal-powers/legal/cca/debt-collection.

In the mean time- no he doesn't have to give them a penny until the dispute is resolved, he should put that in writing to them, sent recorded! They can't take it to court and they know it, but they're still threatening him with illegal threats, they might as well be threatening to send in Ken Dodd to force you into psychological submission with a duster! Albion are only too familiar with these rules and they've decided to totally flout the law! Gah DCA's and thier lying, cheating, stealing ways annoy me! :mad:

robc184

Hi,

Thanks for your replies, we didn't know about the information you have provided.

He's had the loan for about 5 years.

He was told by Albion that he wouldn't get any loans, mortgages, credit cards etc. for at least 10 years as if he didn't pay them it would put his credit rating in such mess which would stop any of these applications.

Is the above a load of rubbish considering that this is in "dispute" from what you have said?

He did mention to Albion that it is in dispute. Especially with the re-arrangement of the payment of the loan with Sainsburys and them not communicating with each other regarding that rearrangement.

Thanks,
Rob

GeorgeUK

If you get a default on your file, this can have a serious impact on your credit rating and will ususally not be removed - it stays on your record for 6 years. As the debt is in dispute, they should not issue a default. I would recommend that he check his credit file to see if they have already done this.

A default is a legal document, but many DCA's just ignore the legislation and inform the Credit Reference Agency that they are issue a default. They are supposed to send you a letter (default notice) informing you that they are issuing a default - this gives you a certain amount of time to pay before the default goes on your credit file. Also if a default has not been issued, they cannot take legal action. This is the legal document required to enable them to take court action.

I would advise your friend to also contact the nationaldebtline to confirm this. The only time this becomes a problem is when the DCA's ignore the legislation and issue defaults when the debt is in dispute or don't even bother issuing default notices. Then you need to pursue them and harass them to get it removed. Either through the Ombudsman or through the court - as this is already with the Ombudsman, it may add some fuel to the fire if they have done this while the invesigation is ongoing.

I would definately check his credit file on experian or equifax (free if you cancel within 30 days).

One thing i would point out if you are not already doing this - ALL communication should be in writing. Do not agree to anything over the phone or even complain over the phone. It should all be done in writing so that you have a paper trail to follow if you do need to take it to court (send everything by recorded delivery).

Hannah_10

The barefaced cheek of it! :eek: What George said is absolutly correct, a default looks bad but it's not a total no-go. It also can only last 6 years on your record. It's not even as bad as a CCJ and you can still get a mortgage with a CCJ (see the "Latest MSE News" box on the right of the screen for a recent article on sub-prime mortgages).

They are out and out liars. :mad: Listen to George instead, he's right and any of the debt charities (National Debtline, CCCS, the CAB or Christians Against Poverty) will confirm it- best he rings and gets it from them. The first rule of DFW is never phone creditors, always write. Sad that in this day and age any company is allowed to lie, manipulate, harrass, intimidate and decieve isn't it, barely believable when you first get these letters and calls that they might be untrue... Don't let years of relatively civilised consumerism con you- the DCA's are a law unto thier bloody selves. :mad:

If he's not a happy bunny then he's well within his rights to complain to the OFT and the FOS. I sooo would. :mad:

Ok, rant over.

robc184

Hi,

Thanks to you both for all the information that you've provided, it's been invaluable. Sounds like they have been cheeky gits!! :mad:

Thanks,
Rob