Is this legal??

kcfitz

My 21 yr old daughter was really pleased with herself when she made her final payment to a finance company for her first car last month - until, that was, she received the letter telling her she had to make a closure payment of over £300 (as stated in the small print of her finance agreement!). Her monthly payments had been £150 which she could manage and was proud to be purchasing her own little car. In essence this additional payment bumps up the actual interest she's had to pay considerably! Is this legal and does she have to pay this extra payment?:(

ILW

Chances are that the final payment was included in the APR quoted.

aka_shortie

If its in the small print and she's signed it, then Yes!

michael1983l

How long ago did she take the agreement out, in the last few years the government changed the law so that credit agreements also have to be provided with a simple key facts sheet, this is something that should be on that sheet so if your agreement came within this period you can despute the amount on that basis.

Key facts document

A key facts document is a document given to you by the provider of financial products. It will clearly show you the costs and features of a particular financial product.

Sorry I couldn't find when this came into force. Speak to your CAB they will probably know.

ILW

patsifal wrote: »

Wescotts Financial Services is a financial consultancy firm that sollutions to companies in the areas of strategic business planing and advisory, strategic financial management, financial system design and implementation, tax consultancy and accounting services.

Who cannot even spell solutions.

chanz4

all finance agreements have a setup and final fee which is a lot higher than the monthly payment, its to cover the admin etc of removing from hpi etc

kcfitz

Thanks to everyone for the replies. I'll find out if she got a check sheet and speak to CAB

Malky

kcfitz wrote: »

she received the letter telling her she had to make a closure payment of over £300 (as stated in the small print of her finance agreement)

I dont understand why you need to contact CAB after the above statement.
Why do you think she shouldn't have to pay the £300?

michael1983l

Malky wrote: »

I dont understand why you need to contact CAB after the above statement.
Why do you think she shouldn't have to pay the £300?

Because they payment has to be set out in a clear and uncomplicated format in a Key Facts Sheet as stated by LAW.

That is why.

fozmcfc

Malky wrote: »

I dont understand why you need to contact CAB after the above statement.
Why do you think she shouldn't have to pay the £300?

100% correct :T

michael1983l

fozmcfc wrote: »

100% correct :T

Not under current legislation it isn't!!! Section 55A of the Consumer Credit Act 2010 - However I am not sure if it was present in 2004 so I do not know if this will cover your agreement.


http://www.oft.gov.uk/about-the-oft/legal-powers/legal/cca/agreements/

The regulations require certain information to be set out in the credit agreement. The information must be clear and concise and easily legible, and certain information must be included in the document the borrower signs. There are special rules for overdrafts and pawnbroking.