Charges On Exisiting Loan For Phone Calls And Letters Sent Out

missc_3

I have a loan that has come to the end (October 2006) however in the middle of this loan i had a problem with payments but spoke to the company and done reduced payments for 6 months - i then went on to pay double payments to catch up with myself.
in this time they rang me (charging me between £5 and £10 per call!!! and £10.00 everytime they sent a letter out)

I have a statement off them and it says i still ow £435.00 (sorry £445.00 as they put on end that they were charging me £10 for letter)

My original Loan was for £2500.00!! (of which to pay back was £146.16 x 36 payments = £5261.76) at the time i was desperate and this was only company i could get a loan with (WELCOME FINANCE)

I have checked MY STATEMENT AND I HAVE PAID BACK EXACTLY £5261.76 - all be it a month late (nov 2006) - however they say i still owe them over £400.00

is there anything i can do? so far i am refusing to communicate with them however i dont want it to go to point of bailiffs - can i fight them and if so am i likely to win?

HELP PLEASE AS IM GETTING SICK OF THEM RINGING ETC

Rafter

missc,

Under contract law and the agreement you signed, they can charge you their reasonable administration costs for your breach of contract, including the costs of calls and letters.

In the case of an automated letter, £10 is probably unreasonable. If someone has had to investigate your file and draft a letter then it probably is. Similarly maintaining a call centre, someone having to investigate your account before calling you etc could well cost £5-£10.

Regardless of what you finally paid, you were effectively borrowing more money during the 6 month period you were behind on your loan, and it would be perfectly reasonable for them to charge you more.

Looking at your payment, you must have been paying for Payment Protection insurance on this loan. Why didn't you claim on this if your income was reduced for 6 months?

The OFT have indicated on Credit Card penalties that they cannot see how the charge could be more than £12 and there may be a similar ruling on bank charges.

My suggestion would be to write them a letter, stating that you think their penalty charges may exceed their reasonable costs.

Say you are prepared to pay 50% of what they are claiming from you or to provide you with a full breakdown of their costs (not charges) that make up the £445.

If they refuse to do that it is up to you whether you decide to go to court or whether they would go that far. You might well rack up court costs in excess of what you might win though.

Otherwise put it down to experience and cough up, despite the bad taste in your mouth that that might leave.

R.

missc_3

thanks for your help on this matter.

I think they know its excessive there charges as ive not communicated with them now since Nov 2006 and have had NO letters saying its went to debt collector etc - i think there trying it on

gonna stick it out another month and then if they still persist do what you say and offer them 50% of payment