Fixed APR has been changed???

pigsmightfly

Hi!

I had a loan with Cahoot which I took up in 2005.

As I'm sure you are aware, Cahoot was taken over by Santander who I have had nothing but problems with since it was moved to them.

However, I'm currently just getting myself up-to-date with exactly where I am at with my "debt paying off" which is going very well but when looking through my documents for this loan I have noticed something which I am not happy about but would like advice from someone who knows what they are talking about before I complain in case I just don't understand it correctly

When I took my original loan out with Cahoot, it says on my loan agreement that the APR is 9.7% fixed.

However when looking at the loan summary statement I received from Santander in July last year (which I have only just noticed now ) it says the APR is 11.9% but the interest rate is 9.29%???

By my understanding the APR should still be 9.7% as agreed with Cahoot when I signed for my loan and Santander can't change the terms but what is the separate interest rate figure they have put?

Thanks to anyone who can explain before I complain to them. :mad:

opinions4u

9.29% divided by 12 and capitalised monthly comes to 9.7% APR.

So where does the 11.9% come in to it? Probably a printing error.

But you need to give those nice Santander owned people a ring to clarify what's going on. And ask them to compensate you for your time and effort and to put it in writing that it's fixed at the agreed rate.

zppp

OP, I wonder if you are looking at the flat rate and not the APR?

pigsmightfly

opinions4u wrote: »

9.29% divided by 12 and capitalised monthly comes to 9.7% APR.

So where does the 11.9% come in to it? Probably a printing error.

But you need to give those nice Santander owned people a ring to clarify what's going on. And ask them to compensate you for your time and effort and to put it in writing that it's fixed at the agreed rate.

Thanks for that. I got a statement from them quoting both these figures which is what has confused me but as I can never get in touch with them or get them to reply to me or allow me to use online, I'm stuck and just wanted to check before I wrote yet another complaint letter to them

pigsmightfly

Hi!

Ok so I sent off an official complaint about this asking for a full explanation etc.:

Here is the reply I got:

"Thank you.....etc.etc.........

I understand that you are unhappy that the APR on your loan is 11.9%. Your loan agreement says that the interest rate is fixed at 9.7%.

Under the terms and conditions of your Flexi Loan we were required to provide you with 30 days notice of any changes to the product. On 12 January 2010 we provided all Cahoot Flexi loan customer's with a notice of Variation to the product terms and conditions and notifications of the removal of the available funds, both of these issues being effective as of 12 February 2010.

Regarding the matter of the APR being changed, the APR on the Cahoot Flexi Loans was variable as detailed within the product Terms and Conditions. This was effective prior to the Cahoot Flexi Loans being transferred to Santander's systems, tgherefore the APR that your loan is currently on is correct and was subject to change. However the APR is now fixed at 11.9% nd will not be reviewed.

Further to this on 24 January 2010 further communications were sent to all Cahoot Loan customers advising them that their loan account was to be migrated to Santander's systems in no less than 30 days. All communications were sent to the Cahoot Loan customers using their registered email address therefore you would have received these communications if your details had been maintained correctly.

I hope you feel I have offered a fair resolution.....etc.etc"

I am livid about this. :mad:

Firstly my loan never has been a Flexi Loan, it was fixed and I have the original paperwork from Cahoot still when I took this up daying so and saying the APR was fixed.

Secondly, ragardless of whether they have my account set up as the wrong type of loan or not, I did not receive any communications, via email or otherwise, stating the APR was changing as I would have queried this at the time, not just now when I've only realised.

I am also unhappy with their attitude of implying my email address was not correct and that must be why I didn't receive anything as I haven't changed my email address!!!

Can anyone advise/help me on what I can do here. If they've changed my APR over a year ago then I can only presume less payments are coming off my loan total and going to interest instead! If anyone can think of any good wording etc I can put into a letter I would be grateful.

Thank you
:mad:

jonjamie1970

Nasty, I would suggest you might want to challenge this and again ask them the same question, send a copy of your original documentation and send a copy to the OFT or financial ombudsman as well. Have a read again of the small print on the original loan as they may have put in a note to say they can change the "fixed rate" at any time. Which in my mind is false selling and quite serious.

As you say, from para 2 onwards it seems this is a standard letter referring to flexi loan, which you say yours is not.

I would also ask them to refund all the additional interest you have paid during this change.

pigsmightfly

jonjamie1970 wrote: »

Nasty, I would suggest you might want to challenge this and again ask them the same question, send a copy of your original documentation and send a copy to the OFT or financial ombudsman as well. Have a read again of the small print on the original loan as they may have put in a note to say they can change the "fixed rate" at any time. Which in my mind is false selling and quite serious.

As you say, from para 2 onwards it seems this is a standard letter referring to flexi loan, which you say yours is not.

I would also ask them to refund all the additional interest you have paid during this change.

Thanks, will do that, they've just got me so angry. Had nothing but problems with this account since it got sent over to Santander, don't know how they have customers! :mad:

pigsmightfly

Hi,

Just wondered if anyone else could help/advise on some good wording for my letter?

Can I ask for proof of what information they were sent from Cahoot etc at the time of the takeover or not as I have checked my paperwork and it was fixed and there is nothing to say it could be changed from this?

Thanks

paddyrg

I would be short and to the point-

Dear x,
Thank you for your response dated x. Please take a fresh look at the attached copy of my loan agreement which staates the contracted terms of the loan including para x.x which states the duration is fixed and term x.x which states the APR is fixed at x%. I did not receive your communications, but regardless of that or Santander buying out my lender, I assert that my contracted APR is x%. Please revise your records and refund the mischarged interest charged by (date). From now on, I wish to communicate solely by post at address x, please send your responses to me there.

Something like that, sent recorded delivery (74p extra) helps keep everything very clear and straight. That would be my approach, see their written response, and then refer to ombudsman if they don't apologise and grovel!

pigsmightfly

paddyrg wrote: »

I would be short and to the point-

Dear x,
Thank you for your response dated x. Please take a fresh look at the attached copy of my loan agreement which staates the contracted terms of the loan including para x.x which states the duration is fixed and term x.x which states the APR is fixed at x%. I did not receive your communications, but regardless of that or Santander buying out my lender, I assert that my contracted APR is x%. Please revise your records and refund the mischarged interest charged by (date). From now on, I wish to communicate solely by post at address x, please send your responses to me there.

Something like that, sent recorded delivery (74p extra) helps keep everything very clear and straight. That would be my approach, see their written response, and then refer to ombudsman if they don't apologise and grovel!

Thats great, thanks for your help

Fiddlestick

My my, a genuine bank error as opposed to a borrower error - I've seen it all on MSE now

Joking aside I hope you get it sorted out soon and have a nice refund to look forward to.

From what you have said, it seems pretty open and shut and there is no way they can contest it if you still have the original paperwork.

Proof if ever it was needed that it always pays to keep your paperwork handy

Best of luck!