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

Denza

kenny_straw wrote: »

Done ! Wonder will it fall on deaf ears....

I would be prudent to assume so as this would be in line with the selective deafness as featured at Cahoot, Abbey National, Santander, the Financial Ombudsman Service, the Office of (ahem) Fair Trading and Advice Guide from 2006 onwards.

Oh yes, I am very bitter!

Even ignoring the usurious APR increases for a moment, the morphing of the flexible (unlimited* withdrawals, unlimited deposits, online account management) product into the current inflexible version (+20% APR fixed rate loan, zero online account management, unlimited deposits) without recompense is staggering, not least that the FOS to date see no issues in this area.

* to pre-approved credit limit

There is an open caveat in all T&Cs that I have seen that allows changes but I have never before known those changes to comprise an actual core product change.

I mean what level of T&C changes would actually provoke a regulatory response? They could change "Loan" to "Cow" and then demand repayment in livestock presumably.... as long as they give borrowers 30 days notice of course.

OK, bitter and facetious.

kenny_straw

...What the Ombudsman says is final...
http://www.financial-ombudsman.org.uk/faq/businesses/answers/service_a3.html

Come on Martin Lewis, get this on Watchdog and help us out!

VanGoghsEarhere

Denza wrote: »

I would be prudent to assume so as this would be in line with the selective deafness as featured at Cahoot, Abbey National, Santander, the Financial Ombudsman Service, the Office of (ahem) Fair Trading and Advice Guide from 2006 onwards.

Oh yes, I am very bitter!

Even ignoring the usurious APR increases for a moment, the morphing of the flexible (unlimited* withdrawals, unlimited deposits, online account management) product into the current inflexible version (+20% APR fixed rate loan, zero online account management, unlimited deposits) without recompense is staggering, not least that the FOS to date see no issues in this area.

* to pre-approved credit limit

There is an open caveat in all T&Cs that I have seen that allows changes but I have never before known those changes to comprise an actual core product change.

I mean what level of T&C changes would actually provoke a regulatory response? They could change "Loan" to "Cow" and then demand repayment in livestock presumably.... as long as they give borrowers 30 days notice of course.

OK, bitter and facetious.

Thanks for the laugh anyway Denza. And yes, I agree wholeheartedly. I'm still at a loss as to why the change doesn't constitute a brand new CCA. Also Santander never informed anyone, as far as I am aware, of what their new APR would be before the change took place. If I had known that it would still be the same as the flexiloan I'd have told them to shove it sideways to where the sun don't shine. I know that the APR cited on my monthly statement (which makes for cheery reading ) is at least 1% below what I'm actually being charged. Surely this is an infringement as well??

Denza

In addition to the general unfair terms in consumer contracts regulations (UTCCR) there are some other notable aspects of current OFT guidelines which I feel are relevant to those customers who enjoy or have enjoyed the Cahoot "Flexible" Loan product:

Irresponsible Lending

http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft1107.pdf

"disclosure of key contract terms and conditions (including rates and charges), ensuring terms and conditions are fair (including ensuring that they are not unfairly balanced in favour of the creditor), clear and intelligible, so as to be understandable by borrowers"

Unfair Relationships

http://www.oft.gov.uk/shared_oft/business_leaflets/enterprise_act/oft854Rev.pdf

Section 140A of the Act provides that the court may determine11 that the relationship12 between a creditor and a borrower arising out of a credit agreement (or the agreement taken together with any related agreement13) is unfair14 to the borrower because of:

a) any of the terms of the credit agreement or any related agreement

b) the way in which the creditor has exercised or enforced any of its rights under the agreement or any related agreement, or

c) any other thing done (or not done) by or on behalf of the creditor either before or after the making of the agreement or any related agreement.

3.17 The interest rate under a credit agreement, or other charges falling within the total charge for credit, would normally be core terms and so, if clearly expressed, would not themselves be subject to an assessment of fairness under the UTCCRs.30 This would not, however, preclude the court from taking such terms into account in deciding whether the
relationship is unfair to the borrower.31 Equally, the OFT or another enforcer would be entitled to have regard to such terms in deciding whether to take Part 8 action.

3.18 A term providing for variations in the interest rate would not, in the OFT's view, constitute a core term within the meaning of the UTCCRs as it does not relate to the adequacy of the initial price. A variation term which confers excessive discretion on the creditor either to vary rates and charges, or not to vary them, in line with changes in the market, may be considered unfair under the UTCCRs and may also be a relevant
factor in considering whether there is an unfair relationship.

3.19 The unfair relationships test in section 140A of the Act does not refer expressly to rates or payments, in contrast to the previous extortionate credit bargains provisions. Section 138 of the Act provided that, amongst other things, a credit bargain was extortionate if it required the borrower to make payments which were grossly exorbitant, having regard to interest rates and other relevant considerations.

3.21 For example, the rate of interest charged under a credit agreement, or the rate or amount of other fees or charges, may be so much higher than those applicable generally in the particular market sector, or payable by borrowers in similar situations, as to make the relationship as a whole unfair to the borrower. They may also, in the particular circumstances, be oppressive or exploitative of the individual borrower33 even if they are in line with rates prevailing in the particular sector.

3.22 In some cases, excessive prices may be accompanied by other unfair terms or practices which may contribute to an unfair relationship as well as being susceptible to possible Part 8 action in their own right. For example, the borrower may be unaware that a fee would be charged in a particular case, or of the level of the fee, or how this might impact on the debt. He may also be unaware that rates might increase in particular circumstances, or were unlikely to reduce in line with changes in the market. The creditor (or a broker or other intermediary) may have failed to disclose relevant information,34 or may have done so in a false or misleading manner, misrepresenting key elements.35 The information may have been unclear or ambiguous, and so may not have been readily comprehensible.

The above is fuel for the fire should litigation prove the only option at a later date, that is assuming the FOS and/or OFT don't act definitively beforehand.

Which seems unlikely.

farmer1971

As part as my 'last stand' I did quote two case numbers that the FOS had upheld in favour of the consumer. The Ombudsman replied with the following:

"Finally, Mr and Mrs XXX say that they understand that the ombudsman service has upheld similar complaints to theirs in the past. It is correct that we have dealt with some complaints about the flexible loan in the past and that some had successful outcomes for the consumer, largely because Cahoot had not at that time provided us with a sufficient level of detail about the reasons for the interest rate changes."

The FOS like to issue adjudications etc by email on a Friday followed by a hard copy in the post on the following Tuesday, so I'm sure some will receive an adjudication very soon!

For the record my adjudicator was Ms Sarita Taylor and the Ombudsman was Mr Michael Ingram.

Cell

All very quiet...

UncleDennis

Yeah things do seem to have died down a little. I honestly can't believe that my complaint has been being 'looked into' by the FOS since May! Gutted to hear about Farmers decision as well. When you read all the posts about Santander here, and on other forums, it really makes you wonder how they have any satisfied customers at all!

Keep on fighting the good fight people!

Denza

A well earned thanks for your wonderful avatar UncleDennis!

UncleDennis

Haha! Cheers Denza! It's childish I know, but it makes me feel better!

newcook

ive still not heard anything back yet either - dont want to chase it just yet in case Im tempting fate!!