Santander are now refunding interest payments on Cahoot flexible loan's

oracleman

jace65 wrote: »

(can I) go straight to the FOS?

Unfortunately, you have to go to Santander first. FOS will only accept a complaint if the company has had a chance of resolving it first. Sadly this delays it further but a required step.

jace65

Thanks Oracleman, I thought as much!!

Email will be sent to Santander tonight!

Duncton

I sent my complaint to Santander on 19th June and was told their reply was sent to me on 9th July.
In anticipation of a kick back, when I read kennystraw's post yesterday I called the FOS and was told that I should send in my complaint to them in the usual way. They wouldn't comment though on whether all complaints were being grouped together.
I'm a bit concerned about farmer1971's comment yesterday that his adjudicator said his was the first complaint since October 2011 - perhaps there are a lot of complaints prior to October!
Anyway, nothing in the post today, so emailed "Executive Complaints Team" and said maybe they could email their resolution. I was surprised when they did and surprise surprise, it is a kick back.
The letter says:

Thank you for taking the time to contact our Executive Office. Your concerns have been passed to me to review.

You have complained about the rate rises you experienced on your Cahoot flexi loan, and in your view these rate rises were unfair. I have looked into your complaint in order to ensure that we acted in the right way in respect of your loan with us.

I will set out briefly below why we believe the rate rises were fair and that we acted reasonably at all times. If, after reviewing these reasons, you disagree with me, you can refer your complaint to the Financial Ombudsman Service. I have enclosed a leaflet that explains how you do this. If you wish to complain you should contact FOS within six months of the date of this letter.

The Cahoot loan you chose was a flexi-loan. It had a variable rate of interest. It offered you the flexibility to draw down more funds without the need for a further credit search. It also gave you the opportunity to repay the full balance at any time, without penalty.

We carry out regular reviews of all our products to ensure that the interest rates charged on our products are appropriate. This is important to ensure we run our business prudently. Regrettably, at the time we felt it necessary to increase the interest rates on the Cahoot flexi-loan to ensure the product, with the flexibility it offered to customers, could continue to be offered.

While we appreciate your concern that these rate rises were significant, the interest rate ultimately charged on your Cahoot loan was in line with other flexible variable rate loans that were available in the market at that time.

I am satisfied that these interest rate rises were made in accordance with the Clause 13 of the terms and conditions of your agreement with Cahoot, a copy of which is included. In reviewing your complaint, I can see that you were given advance notice of these rate rises, both via your web based Cahoot secure messaging facility and in writing via email to your nominated account. I believe we communicated appropriately and entirely in line with the attached terms and conditions of the loan.

With this in mind, we believe that in respect of your loan with us these rate rises were fair and that we acted reasonably at all times. I am therefore unable to uphold your complaint.


I'm surprised that they are giving me the green light to refer to the FOS after their first letter, but at least I know where I am!

Flyboy757

Has anyone elses APR now been fixed? I complained in may 2011 and I was told that the APR is NOW fixed at 17.94% and will NOT be reviewed. There was no notice of this. All check!!
I spoke to Michelle cook in the executive office yesterday. She explained their definition of a flexible loan... It's in 2 parts she said.
1 The ability to draw down funds
2 A variable interest rate with no fixed term.

So on both those counts they have failed. Am I right in assuming that 999 months is actually a fixed term?? Just under 84 years!

I said to her that seeing as we agree on part 1 would she be interested to know that I have a letter stating the interest rate is now fixed! Silence. She said even if I produce that letter they aren't changing their minds!! Their decision is final.
How can they make a fair decision without all the facts!
They know they are in for trouble with this. The whole conversation was 'scripted' hiding behind their terms and conditions!
I really hope we can all break this company.

oracleman

I had dealings with Ms Cook, complete waste of time. Even if you explain and point out in black and white that Santy is wrong you just get the script.. we are right, T&C's etc etc.

The fact the so many people have had refunds as a gesture of good will indicates Santy have got it wrong. Banks never pay out unless they have too. By forcing people to go to the FOS Santy are trying to prevent people getting an automatic refund. Crap company - if they were fair they would accept the previous findings of the FOS, hold their hands up, admit they are wrong and pay out to all.

Forcing people to go down the FOS route might deter some people and save Santy a few bob but it stinks. Will never ever trust these sharks again with a single penny.

sijod_2

Hi everyone, this is the first time i´ve posted on here. Came across this Cahoot loan pay out thread yesterday and emailed the CEO today so fingers crossed. I appreciate I might end up going down the FOS route but I don´t care, I ended up in a lot of difficulty through taking loans and credit cards out and currently I have sent off 6 PPI claims for me and the missus, 1 bank charge claim and now this one. Would be amazing if they all came off!!!

starsky11

Hi

Just to let you know I emailed my complaint to the CEO and had no response whatsoever. It wasn't returned undelivered so definately got it. I ended up having to go through santander site and email a complaint that way.

I got a bog standard reply then that my complaint has been passed to the executive team but nothing since and its coming up to 3 weeks now. I'm surprised its taking so long to get a response if they are just doing the standard text thing.

Having worked for a mortgage complaint team in my experience they do very little investigating when its a large known problem and just send out the standard template response. So don't know why it takes them so long to reply. There hoping were all going to go away and give up.

I'm just waiting for my 8 weeks to be up then I'll go straight to FOS. Just hoping I might get something back for the large amount of interest i've paid them over the years.

james18c

Hi i have just recieved the template rejection letter from santander that everyone else has seems to get back from them. Can any one help me on what i should put in my letter to the FOS or send me a template of there? thanks

happy_bunny_2

james18c wrote: »

Hi i have just recieved the template rejection letter from santander that everyone else has seems to get back from them. Can any one help me on what i should put in my letter to the FOS or send me a template of there? thanks

Hi,

You don't need a letter.

Just fill out the form on here if you have a printer or ring them to post you one if not:
http://www.financial-ombudsman.org.uk/consumer/complaints.htm

Keep the complaint the same as you put in the letter.

Good luck

HB

Flyboy757

All this is what I wrote to ombudsman... Thank you to all the previous posts as I have included some of your points in the letter.

The reasons for my formal complaint against Santander.

I believe that they have acted unfairly, without due diligence and in some cases untruthfully, if not illegally.

Most recently I sent an email (27 June 2012) to a specific email address passed to me by Santander's customer service team. This email address was not ( to my knowledge ) in use prior to November 2011 and I believe it was set up to direct all the complaints on this issue to a specific team. There have been 1000's of complaints all of which are extremely similar to mine and in a good number of cases Santander have offered 'goodwill gestures' amounting sometimes to many £1000s per customer.

The goodwill gestures seemed to stop in late December 2011 and since, the bank has decided to automatically reject any complaints of this nature at the first opportunity.

I hope to show that my case should warrant a substantial 'goodwill gesture' and furthermore, that it was originally raised before any of those 'lucky recipients' received any' gestures of goodwill.

I have made several phone calls and I am hoping that the transcripts to those conversations are available to yourselves as I think you will find them very interesting. The telephone numbers I would have used to contact this company could be any of the following;
The 'standard' response letter that Santander have sent makes me wonder if they even read my email! The response to my email complaint appears to be a generic rejection letter in which they have offered no corroborating evidence to suggest that they have specifically looked into my complaint.

Enclosed with the standard rejection letter was a poorly photocopied copy of the T&Cs dated June 2006. I took my loan out in 2003. They are not the same T&Cs. Amendments have been made. I believe this substantiates my complaint of a generic response and not investigating my claim on an individual basis.

I believe the letter dated 27 June 2012 is actually confirmation that Santander have little interest in dealing fairly with their customers and would rather send out a standard reject letter to try to stop customers' complaints at the earliest opportunity.

The reply to my most recent email complaint neither acknowledges or addresses the issues that I have. I believe the rate increases are not fair or justified. Santander have given no proof of what 'they' call a similar product at the time and completely ignore the fact that they are comparing this to a flexible loan at the time.( there are no examples of a flexi loan APR at the time) What they have missed is precisely this point. It isn't fair because they are comparing this to a completely different product! A ' normal' loan. Not a flexible loan. They took away the flexibility of drawing down funds ( without further credit checks) the whole point of this flexible loan for me. [Santanders definition of a flexi loan is quoted later in this letter]




There has been a series of rate rises where in the space of two years 2006-2007 the APR doubles. These rate rises were not fair.

I have never received any correspondence from Santander (as they claim) to warn me of changes to the original terms and conditions. I would like to see proof that they have sent emails of this type to me and should they, not have been delivered ( which they would know) then they are surely responsible to 'write' to me or telephone me to ensure I have the agreed notice period as set out in their terms and conditions which they so like to quote.

[I have an example of their failure to give prior notice later in this letter.]

The APR that i am currently being charged according to my monthly statements is 16.69%. It is printed on each statement that i have and also states that this is the interest rate I have been charged since August 2008. [copies enclosed]

However, I have been informed today after I had to question this point ( recently found a letter from them stating otherwise) and I was told that actually I am being charged 17.94% this could be seen as a deliberate attempt to misinform customers. You can not state in company correspondence, ie statements that the APR is at one level and then proceed to charge a higher level without informing me, the customer.

I was never offered an alternative replacement when Santander took over because I have never received correspondence from them in this regard.

I actually applied for a Santander loan because I thought it may be a way to reduce the absurd interest rates I am being charged. I explained that I wanted to consolidate the "flexi-loan" and was told that i would need to apply for a loan and an extra £1000.

I was turned down.

A possible cause for this would be credit checks that were possibly made at time of change over to Santander without my knowledge or permission. More importantly my credit file shows this agreement as an outstanding revolving account with a balance of £9000 over 999 months. I do not know how much of a detrimental effect this will make to my score but it may have affected all my applications for credit across the board, over all these years.

The product has changed beyond fair recognition (it is no longer a flexi-loan, you cant draw down funds and the interest rate is NOW FIXED) without seeking my consent via a new agreement.

I know for a fact that Santander have made monetary settlements to many other flexi-loan customers in respect of these interest rate hikes, therefore a precedent has been set.












I would like to add this from a phone call made today, I have tried to describe what was said as accurately as possible but I am hoping you will be able to obtain a transcript of the conversation.




Phone call 10 July 2012 @ 10:27 made from 01625 between myself and Michelle Cook in the executive office.

I was told that every complaint was looked into on an individual basis and that every case is treated on its own merits. I explained that this is not the case. The reply to my email 27 June made no attempt to answer any of my concerns but she was unwilling to comment.

She explained what Santander consider to be a flexible loan- she states that it is made up of just 2 parts

1. the ability to draw down funds
2. a variable interest rate with no loan term.

I said, in reply to point 1, that this was no longer the case so it is only 50% a flexi loan!
In response to 2 I said are we agreed then it is still a flexible loan because you are charging me a variable interest rate. She said yes. And it does have a term as it states 999 months on my credit report.
It becomes interesting for an independent adjudicator when I then inform her that I have in my possession correspondence from Santander (dated 18 may 2011), "however, the APR is now fixed at 17.94% and will not be reviewed". Note: there has been no notification of this rather important change to the terms and conditions. Do we presume that this is the notification that the interest rate is now FIXED! If so i have not had the appropriate notice period. Silence!

[santander's letter dated 18 May 2011 actually states that 'you are unhappy as the flexi features of your loan have been removed' So in may 2011 they agreed that it was no longer a flexible loan. Yet another inconsistency.

Furthermore, their letter dated 27 June 2012 states 'the cahoot loan WAS a flexi-loan.' they then go onto say in that same letter....'regrettably, at the time we felt it necessary to increase the interest rates on the cahoot flexiloan TO ENSURE THE PRODUCT, WITH THE FLEXIBILITY IT OFFERED TO CUSTOMERS, COULD CONTINUE TO BE OFFERED'

So It's not a flexible loan anymore. The justification in that same letter... ' we appreciate your concern that these rate rises were significant, the interest rate ultimately charged on your cahoot loan was in line with other FLEXIBLE VARIABLE RATE LOANS that were available in the market at that time'
So they have justified unfair rate rises by comparison to a completely different product ( on which one may assume people would pay a little extra for the flexibility( as I did in 2003)


She declined to comment further so I asked will it make any difference if I spend the time to write in. She said NO the decision is final.

I asked how she could come to that conclusion if she didn't have all the facts in front of her! The ones I was willing to supply! No response. I asked if this call was being recorded and she said some calls are. It would not surprise me if she then sent an email to request that the call be deleted from their records.



Whilst I realise that this may not be the simplest way to set out my case I do believe that I have been poorly and unfairly treated. I appreciate the time and effort you are putting into these complaints and very much look forward to speaking to you further in due course.

In summary,

-This is no longer a flexible loan. You cannot draw down funds. And the variable interest rate has been fixed.

-Inconsistent information regarding the actual interest rate being charged.

-Interest rate constantly increasing and then fixed at a suitable level to them with no notice.





Kind regards






















Some background information from other sources...

In November 2004 Santander's acquisition of Abbey became effective.
Q. Why did Santander increase interest rates from the period of 2006.
A. Up until 2006 you would probably have experienced interest rate increases tracking the Bank of England Base Rate (BoEBR) these rises fall within clause 13.2(b). From late 2006/early 2007 massive rate increases were introduced on the Cahoot Flexi loan product across the board above the BoEBR these rises fall outside clause 13.2(b). For these changes Santander relied on clause 13.2(a) and 13.2(c). This had nothing to do with your personal financial status or credit scoring. Santander claim the increase was implemented due to the growing number of accounts with arrears of £500 or more. In 2006 this figure stood at between 3.8% and 8.7% depending on the year the account was activated. ie: 2002 - 3.8%, 2003 - 6.5%, 2004 - 5.6% and so on. Unfortunately you were paying for the bad debt of others.

Q. Why was the ability to drawdown funds and online account servicing removed?
A. In March 2010 Santander moved it's Cahoot 'book' onto it's new IT platform (Partenon) They claim the new platform could not support the Cahoot product as it stood.

I hope this answers the two most important concerns many of you have.

Santander claim you could have moved to a fixed rate product with a typical rate of 5.8% APR. Why would the business volunteer to take more loss on the Cahoot product? Was anyone actually successful at refinancing at that rate?

Increasing the interest rates on 'good payers' accounts just because Santander mismanaged/approved loans to bad risks - is that entirely legal or yet again plain unethical? It seems to be a case of we increased interest rates just because we felt like it and then. FIXED them when they wanted to!


"During the period from 2006 and 2008 a number of interest rate rises were applied to your account. Some of these reflected underlying changes in the Bank of England Base Rate, and therefore fell within clause 13.2(b)."

I checked this and between 2006 anfd 2008, the BoE base rate rose from 4.5% to 5.75%, yet me interest rate went from 6.7% to 16.61%. Not a proportional rise is it? Significantly, they neglected to mention that in 2009 the BoE base rate fell to 0.5% and has stayed there ever since. And what happened to my interest rate.?Yes, it fell significantly to ..... 16.61%. You can't have it both ways Santander! If you raise rates based on BoE base rate, then you reduce rates based on BoE base rates
Some of these reflected underlying changes in the Bank of England Base Rate, and therefore fell within clause 13.2(b)."
The other reason was "running the bank prudently" in this particular email. what this means, and which of my interest rate rises is because of BoE base rate and which because of running the bank prudently.

"running the business prudently" is pretty vague and therefore may be deemed unfair under the Unfair Terms in Consumer Contract Reg 1999, purely because it is so vague.