Firstplus Loan - Help needed please!!!

Chriswt

TypeR wrote: »

What was the seventy five thousand pounds spent on?

You know what? There are lots of things I would love in life and one of them is my own roof over my head, but you know what? I can't afford one. You see, I don't buy things I can't afford.

So ....The money, what did you spend it on?

I may be missing the point but WHY does anyone need to know what the money was spent on?

Other, of course, than confirming whether they have any assets which could be sold to lessen the debt then its none of anyones business.

The £75k loan was taken out when Teen could afford the repayments and did not foresee redundancy so why does she have to justify anything to anyone.

Home improvements, repairs, holiday, car repairs/servicing, school fees all cost a lot of money but you have nothing to sell at the end of it so to all you geeky and over opinionated 'money saving experts' give her a break!!!

amersall

PeterJF wrote: »

Well I am in much the same situation regarding the loan from First Plus and was looking to see if anyone has found a way out of it. For my case the interest rate is the same as yours but it has never come down despite interest rates falling about five percent. I rang them to ask them why and they said something about it being individually assessed. However, I noted that from when I first took it out in 2005 it went up each time interest rates went up. So I think they are not being fair with the interest rate. I therefore wondered if this could be challenged. There was the Cartel Client Review that turned out to be disappointing in that they said we could get loans cancelled but then they were closed down. It seems no-one has risen to take their place so either they were talking rubbish and taking our money in the process, or they were right and there is still a case to be answered. They did say that my First Plus loan could be challenged together with some mortgages I had got as well as credit card balances. Maybe this is some option, like to challenge the validity of the loan, but I am not sure who would take such a case up now since Cartel Client Review have ceased to operate (whether they would have been successful if they hadn't been closed down is still up for debate I suppose though).

Peter

FP have had their hands slapped by the oft for interest rate rises that were not valid. Look on the oft website.This was thanks to "someone "who shall be nameless.I believe if you have debts they should be paid and not "got out of", i have a FP loan and am just glad to have the rate rises stopped, as it was "prudent for their business", and they now have to have justification for doing this and run it by the oft first. I won mis sell ppi and that reduced my monthly payment by £185 a month. For both of these actions, i am ever grateful.

BAILEYS6904

OP, I would seriously advise heading over to the debt free wannabe board and posting up a SOA (statement of Affairs). It gives everyone (including yourself, its a real eye opener sometimes!) an overview of what you have coming in, and what you have going out, what the shortfall is etc. People can also advise on a way to get you on an easier path.

HTH xx

halifax71

See https://forums.moneysavingexpert.com/discussion/2862766

halifax71

To save clicking link

halifax71 wrote: »

Not sure what to make of this;

http://www.oft.gov.uk/shared_oft/consumer-credit/first-plus.pdf

They won't make the requirements public - why not? :mad:

halifax71 wrote: »

I suppose ultimately it depends whether you deem it acceptable for a bank to increase it's income at the expense of its customers.

If base rates has remained at 5% then my APR would be same as it is now, it couldn't increase. Now base rates have hit rock bottom they have the right to double any future increase.

In the last 5 years they have tracked all base rate / FHBR increase and ignored all decreases. Now that is allowable within the terms under the auspices of prudence and efficiency, but the question here is whether it is "fair" when you judge it against regulatory guidance which I have highlighted above.

Thing is we're talking big money here. Firstplus (owned by Barclays) have increased their net income by over £300m in 2 1/2 years since base rates fell. Without rates falling they couldn't have made that £300m. They have made this money out of their existing customers who are captive due to early redemption penalties and the price of new loans increasing. I'm paying £2000 a year more than I think I should be. Extrapolating that across the 50,000 customers and you see where the £100m+ extra a year is derived. This is evidenced in their accounts.

No one in their right mind would have believed it was possible for Firsplus to double the APR on the loan without a corresponding increase in base rates. We all know what variable means - well we thought we did.

To use simply prudence and efficiency as the reason fails, in my opinion, to satisfy regulatory guidance - examples below. This is a complicated area which the FOS and OFT have been pondering over for 2 years now. The problem is if there was a ruling in our favour it would be bigger than the PPI scandal and probably break the bank unless Barclays come to the rescue.


UTCCR 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.

UTCCR 12.2 Any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable. That applies particularly to terms allowing the supplier to charge a price on delivery of goods that is not what was quoted to the consumer when the order was placed. It also applies to rights to increase payments under continuing contracts where consumers are 'captive' – that is, they have no penalty-free right to cancel.

OFT Second Charge Guidance 3.6 There should be transparency about the circumstances in which rates or charges may change, in particular where they may be varied at the discretion of the lender or by reference to some particular factor, for instance as a result of an increase in the lender's input costs. If rates are stated to be variable but do not vary in line with Bank of England base rate, this should be made clear, and if a particular rate is tracked, this rate should be stated.

OFT Second Charge guidance 4.4 If rates or charges are variable, this should be made clear. The potential implications of such variations should be explained, including the impact on the periodic instalments and / or the amount payable. Rates should only be increased on a loan to recover genuine increases in costs which
have an effect on that loan and should not be misused, for example, to take advantage of a borrower's lack of ability to end the agreement. Clear explanations should be given to borrowers prior to rates or charges changing.

halifax71 wrote: »

To be honest I still think this will have to go to court.

This is clearly a victory as it has been shown that the OFT agree that Barclays Firstplus' use of the term is not acceptable. Now we need to ascertain what exactly has been agreed so we can decide if it suits our needs.

Anthing less than an agreement to track at the FHBR / BoE Variance as at loan inception and a retrospective realignment then the fight continues. I think this is why there has been no public statement - they financial implications of doing this are huge - £300m + with Firstplus alone.


As it transpires I've had my FOS Ombudsman Review decision this week. Now I was expecting a rejection as it is clear that they are toothless, and the only reason I held out for it was so I could show to the court that i'd exhausted the supposed alternate resolution schemes. However the decision has astonished me. As well as ignoring the majority of my arguments under the UTCCR, Second Charge Lending Guidance etc, the main reason for rejection was: -

'Taking into account the way in which the Interest Rate has been administered with increases broadly following changes in rates' -

HOW THE HELL HAVE RATES DROPPED 80% THEN, AND MY RATE HAS INCREASED?

Clearly my understanding of the English language is not the same as the FOS Ombudsman. :rotfl:

The saga continues - but it was good to get some indication that our arguments are valid.

Teen_the_Drama_Queen

If I remember correctly, some went to clear outstanding debts and some on a new kitchen (cos old one was falling to bits) and 3 and a half grand for new fence around garden (the joys of being end of terrace eh?) to stop low lifes getting into our garden and stealing things out of our shed.

Still don't know why I have to justify myself to you lot, but you are right, I started the thread!

mrs_skint

Teen ignore the prats and go over to the DFW x

vlad_the_impaler

Chriswt wrote: »

I may be missing the point but WHY does anyone need to know what the money was spent on?

Other, of course, than confirming whether they have any assets which could be sold to lessen the debt then its none of anyones business.

The £75k loan was taken out when Teen could afford the repayments and did not foresee redundancy so why does she have to justify anything to anyone.

Home improvements, repairs, holiday, car repairs/servicing, school fees all cost a lot of money but you have nothing to sell at the end of it so to all you geeky and over opinionated 'money saving experts' give her a break!!!

See, that is exactly the point! If people had not and still are borrowing completely recklessly to finance their lifestyle, then we would not be in the mess we are in. Why are prices going up and up? Because we still pay anyway. Even if we can't afford it, we still pay anyway by borrowing, because it seems to be just figures on a page. Then we can't afford to repay, and boom....

Multiply that by thousands, and you you have too much 'created' money acting as the inflationary force on prices. This is one of the oldest economic principles in existance, yet we never learn. Weimar, Zimbabwe..... If people did not buy these inflated goods and services, then guess what; the prices drop until they start selling again. Throwing made up/borrowed money at the markets only has one result; inflation. If I gave everyone £1million tomorrow, how much would a loaf of bread be the day after?

It is up to all of us to behave collectively and responsibly to curb inflation. Reckless borrowing affects all of us and our society, so yes, the question about where the money went is valid.

With that rant over; perhaps the best advice for Teen would be:

1) Go bankrupt having saved enough for a rental deposit first. Walk away and start again; this is the quickest route out of your situation and the least painful.

2) LEARN YOUR LESSON.......

cavework

Not all people borrowed 'recklessly'.
An awful lot of people borrowed money fully intending on paying it back with interest.
At the time jobs were secure, house prices were stable and the Banks were more than willing to lend based on the financial situation people were THEN in.
As for greatly inflated prices?
Surely that was based on what people were earning and could afford to pay. This was linked to job security and a decent wage.
Cut throat prices.. equal lower wages.. equal redundancies .. that is a lesson that is repeated time and time again.
Manufacturing is dead in this country .. we are now a country of service providers and even that is being sent abroad.
We need to get back to manufacturing .
Just look at the increase in foreign imports compared to this countries exports since WW2.
Also
Those oh so 'sensible' investors who's money was being used to finance these 'reckless' borrowers were more than happy to get the benefit when times were good.

Chriswt

cavework wrote: »

Not all people borrowed 'recklessly'.
An awful lot of people borrowed money fully intending on paying it back with interest.
At the time jobs were secure, house prices were stable and the Banks were more than willing to lend based on the financial situation people were THEN in.
As for greatly inflated prices?
Surely that was based on what people were earning and could afford to pay. This was linked to job security and a decent wage.
Cut throat prices.. equal lower wages.. equal redundancies .. that is a lesson that is repeated time and time again.
Manufacturing is dead in this country .. we are now a country of service providers and even that is being sent abroad.
We need to get back to manufacturing .
Just look at the increase in foreign imports compared to this countries exports since WW2.
Also
Those oh so 'sensible' investors who's money was being used to finance these 'reckless' borrowers were more than happy to get the benefit when times were good.

Excellently put.

It's so sad that a lot of people on this forum want to lecture others about their spending habits and gloat about their own debt free lifestyle rather than offer sound advice to those who ask for it.