Cahoot Rip Off (merged)

mrke

Abbey the owners of Cahoot have withdrawn it from the loans market and I guess they want everyone to leave so that Cahoot can be closed down.

happyformonths

Egg do a flexible loan. You can overpay, and *request* more money - though it's certainly not as easy as using Cahoot, at least they guarantee a fixed rate of interest! In my case, that's 7.7%, by the way. When I applied to Egg, I checked and checked with them that the interest rate wouldn't rise, having been stung by Cahoot in the same way. And they promised...

I haven't yet established to my satisfaction that paying off chunks of the Egg loan early will save exactly the same amount of interest that you would expect after being used to using Cahoot (they say there are no early payment penalties of any kind, but I'm not 100% sure they don't recalculate what you owe in a slippery way, or front-load the interest). Similarly, I haven't asked Egg for a "top-up" as they call it, although anecdotal evidence from this site suggests to me that they are fairly free 'n' easy with it when you want it. If you were doing it regularly it might get to be a bit of a pain for you though - having to ask every time.

I'm afraid I don't know whether you'll get anything as easy to use as Cahoot's flexible loan, unless you manage to persuade your bank to give you a large overdraft facility, explaining what you need it for (which seems perfectly reasonable to me, but then, I don't run a bank).

Good luck.

HFM

pinkwitch_2

Got me worried now, mine must be going up in april.
Need to find another loan now!!

happy_chick_3

I know when I posted here yesterday about cahoot I was in a bit of a strop about it but this has actually been a very good thing!!

I finally talked to my mum about my money problems and she has loaned me the money to pay off the loan - interest free!! It was only £3,500 which I know isn't that huge compared to what a lot of people here are facing, but has been getting me down because I've been allowing it to spiral out of control. I have a good job and should be able to save about £300 a month minimum but I have been living the London lifestyle and spending way more than I earn for the last few years - in fact, I have managed to blow my entire trust fund so it was doubly hard to admit this to my mum!

Everythings starting to get on track and I've listed loads of books and DVD's on amazon to sell the junk and get the debt paid off - in fact, the first one sold today which is great!!

Just want to say a big thank you to everyone on this board posting positive comments and giving encouargement to all, no matter what their situation - reading those has given me the confidence to face my problems and change my lifestyle. good luck to everyone else out there doing the same - keep up the fantastic work!!:j

ScoobyZ

Ive just got that email, glad I dont use my cahoot flexi loan. It was a good product once with a low APR. Now such a rip off.

TheFlyingGerbil

I don't have a cahoot loan but I wanted to say your second post was very inspiring, it's nice to hear that peoples lives are turning around and people here (maybe even sometimes me - but I know not in this case!) are helping each other. It makes me feel all warm inside, especially as I've just had a mince pie I just made from a recipe on here too!

mrke wrote:

Abbey the owners of Cahoot have withdrawn it from the loans market and I guess they want everyone to leave so that Cahoot can be closed down.

Abbey want to close cahoot?! Or just the loans, I was looking to open a cahoot/smile account, and if this is true it will certainly help me make my mind up between the two!

Joe

Roblthomas64

Yeh just received email advising of increase to over 14%, so just closed the account as luckily no monies outstanding on the loan. I'll be ditching the Cahoot credit card as no use to me either, they seem to have a dispute with paypal at the moment so no use to paying for goods on ebay !!

They seem to be going the way of egg - good rates to start then rip off everyone, i reckon abbey are looking to close them down in the near future !!

I must close my First direct account soon as only opened it to make my £35 !!

People need to vote with their feet and move elsewhere!!

enjoyincubus

I had the same email too today. I have a couple of grand on there and have been using the flexi account for a couple of years.

From looking aroung at Cahoot I have noticed they no longer do loans, so as mrke suggested above it looks like Abbey have stopped doing loans through Cahoot.

There is no money to be made from low rate internet loans unfortunately these days. The only way banks can make these loans profitable is to raise the typical APRs or sell to the existing current account/mortgage customers (who are more likely to take out insurance, will be more likely to not move the loan elsewhere after a short period of time and will be prepared to pay slightly less competitive APRs due to the convenience and trust factor from the existing relationship). Price sensitive customers tend to shop around for the best rate, move on to different lenders more frequently and do not take out insurance. This is not the best situation when profit margins are tight!

My guess is Cahoot have taken the decision to get rid of their loans business and most of the existing customer base by virtually doubling the APR's for all customers. Those who are not happy will move elsewhere. However there are groups of customers who do not have as easy access to other sources of credit so will be forced to pay the higher rates and stay with Cahoot. I believe marketeers call this "milking a cash cow". My guess is in a year or so the customers who are still left will be sold on to a different lender to deal with as the ongoing costs will be too large for Cahoot to justify. Also all of the easy profits will have already been "milked dry" and Cahoot will just be left with a back book of bad performing debt.

I am seeing the current APR at 14.9% annoying because it is way over the 6.1% I got when I opened the account. However it is the same rate as my credit card, so as a short term solution it is no worse than carrying the same level of debt on my credit card. Also a "flexi-loan" is more akin to a credit card anyway (I wouldn't be suprised if the Cahoot flexi-loan is managed through the same systems as the Cahoot/Abbey credit cards).

P.S Here is an article confirming Abbey had pulled out of the loans business through Cahoot:

http://www.thisismoney.co.uk/credit-and-loans/article.html?in_article_id=415203&in_page_id=9

Becles

I'm furious with Cahoot :mad:

I only opened the loan account in October and borrow some money for home improvements. I've only made one monthly payment and they've told me the rate is going up from 9.1% to 14.9%.

I'm voting with my feet and will be closing the account and moving my borrowing elsewhere.

h4nym

I'm quite shocked too! Apparently, according to the email, "the rate you pay depends upon a credit assessment conducted by Abbey of your individual circumstances" - funny how everyone is suddenly being moved to 14.9%. That means my rate has doubled over the past year - lucky I'm in a position to pay it off!

I am, however, more than welcome to move my loan to a fixed rate with Abbey... you think I'd ever do business with Abbey or Cahoot again?

Apparently, this is a business decision made by Cahoot. Well, Cahoot - we customers can also make decisions about our business!

This has totally infuriated me - oh well - Abbey joins Amex on my 'never again' list.