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

bagpuss27

I'm still awaiting my "thanks but no thanks" letter which I think is inevitable, but I am wondering whether this is causing problems with my credit rating? I have tried to to borrow some money to "consolidate" (dirty word I know) various items, with a view to pay back over a maximum of 4 and a half years, with a totally affordable repayment, even if they gave me a high interest rate and I have been knocked back by my bank and their brokers. I wasn't asked at all about outgoings etc, obviously one of the things I wanted to clear was this stupid loan, which I will be repaying forever even with monthly over payments. I really do feel like I am banging my head against a brick wall over the whole thing, and want to know if any one has any advise?

VanGoghsEarhere

bagpuss27 wrote: »

I'm still awaiting my "thanks but no thanks" letter which I think is inevitable, but I am wondering whether this is causing problems with my credit rating? I have tried to to borrow some money to "consolidate" (dirty word I know) various items, with a view to pay back over a maximum of 4 and a half years, with a totally affordable repayment, even if they gave me a high interest rate and I have been knocked back by my bank and their brokers. I wasn't asked at all about outgoings etc, obviously one of the things I wanted to clear was this stupid loan, which I will be repaying forever even with monthly over payments. I really do feel like I am banging my head against a brick wall over the whole thing, and want to know if any one has any advise?

Hi bagpuss27

I would suggest, in the first instance, that you check your credit file by contacting the 3 main CRA's - Experian, Call Credit & Equifax and ensuring that there is no incorrect information on these. They charge £2 for a statement, so £6 a worthwhile investment. You can use Noddle (basic info is free, and it will indicate your credit-worthiness) for a general overview of your credit history. However, the £2 statements are more detailed and I usually get these annually just to review the credit status / information. Under the Data Protection Act (DPA) you are entitled to amend any incorrect information on these reports.
If you have a long standing relationship with your bank, and have never defaulted on repayments to them I would also be aggrieved that they wouldn't provide a loan. I'd point this out to them and ask for an explanation of why the loan has been refused.
It sounds like your loan application may have been 'an automated decision' even if you were speaking to a person. Basically they've let the computer run a credit check on you and based their decision solely on the information that it has gathered (Little Britain's "Computer Says 'NO'" ring a bell?). Your salary may well have increased but they've obviously not accounted for this as they didn't ask. Under DPA you have the right to appeal this decision and ask that the process isn't done 'automatically' (see http://www.ico.gov.uk/for_organisations/data_protection/the_guide/principle_6/automated_decision_taking.aspx

The obvious danger is if you appeal and it isn't successful this may leave another footprint on your credit file and too many in a short space of time has a detrimental effect. If you bank locally, I'd suggest you arrange a meeting with the manager or loans supervisor and explain everything face-to-face in the hope that they have a 'change of heart'

DJTASK

The cahoots flexible loan is a running account credit agreement rather than the fixed loan agreement as the monthly payment changes as the balance changes.

Therefor under the consumer credit act we should get monthly account statements that comply with schedule 2 of the act.

As I've posted above, mine don't. Specifically para 4 which refers to allocation of payments and the order of charges. The act is very specific about the wording required. Also I have end dates abd other dates stated as 00-00-0000, which are also non compliant.

If Santander argue its a fixed loan, then they are also breaking the act as they have not sent annual statements!

bagpuss27

Thank you VanGoghsEarhere, I didnt realise that you could question their decision, which was almost certainly a "computer says no" situation. I had all the figures ready for them but was never asked, therefore I will try and put forward my more detailed case - incidentally, how many "footprints in quick succession" or in the course of the year do they consider an issue? I did have a look at my credit report, and I didnt really understand what the negative points were all about really... oh well

MCSAVE

DJTASK wrote: »

The cahoots flexible loan is a running account credit agreement rather than the fixed loan agreement as the monthly payment changes as the balance changes.

Therefore under the consumer credit act 1974 we should get monthly account statements that comply with schedule 2 of the act.

As I've posted above, mine don't. Specifically para 4 which refers to allocation of payments and the order of charges. The act is very specific about the wording required. Also I have end dates abd other dates stated as 00-00-0000, which are also non compliant.

If Santander argue its a fixed loan, then they are also breaking the act as they have not sent annual statements!

I agree with you to some extent, although when the ability to draw further funds was removed this loan became a fixed loan and they did not put the original sum borrowed on the statements, that happened in 2010. It was a running account credit agreement when we first signed up, but then changed. I would encourage everybody to add a new complaint, specifically relating to the lack of required detail in your statements for fixed sum loans since 2010 as that was when the ability to draw funds was removed, quoting the Northern Rock case. To clarify your statements needed to have 1) The opening balance (For that period) 2) The closing balance 3) The original sum borrowed, to comply with the consumer credit act 1974. Does anybody know how to ask the MSE team to look in to this further? PS I've had my rejection letter from the adjudicator and it was as expected.

DJTASK

I'm pretty sure it has remained as a running credit account despite not being allowed to draw further borrowing. Our credit agreement has not actually changed as such, and they could reinstate the borrowing facility if they wanted. Also, with a fixed scheme your payments stay the same, ours don't as we have to pay either 2% or £50 as a minimum.

Basically our monthly statements should look like a credit card bill and have the same words. Mine has most but not all.

It's better for us if its a running credit agreement since our online statements were non compliant as well. If it is assumed that it became a fixed scheme then we can only claim interest back to the removal of the borrowing facility, and not back further!

Potatofrisky

I have just spoken to Santander and requested the APR on the cahoot flexi loan. They stated that its currently 23.21% but on my statement I received 7 days ago its shows a rate of 21.0800%! I mentioned this to the adjudicator and the reply is as follows:

All of the information contained in these e-mails has been added to the case for an ombudsman's consideration.

I am unable to confirm why you are given a different rate verbally when telephoning to enquire about this and I do not have sufficient evidence to confirm this is the case. However, the information and rates contained in my letter dated 7 December 2012 were based on the account statements that Santander has provided as evidence of this. The reason no new agreement was required was because the terms and conditions of the account allowed for this, as detailed in my previous letter.

However, I have progressed the case to an ombudsman for consideration for you and you will receive postal correspondence confirming this shortly.

What utter rubbish, the FOS are just not inetersted and they will believe the banks over what I have provided them in my letter and emails. Why don't they call Santander and ask for the recording of my conversation? I think this whole think stinks and the sooner I pay all my debts off and have nothing to do with banks the better! I personally believe they should let the banks fail and not hand out tax payers money to support them! - rant over, I feel better now. I think the legal way is the only way and maybe we should include the FOS for the way they have handled the whole case! Why hasn't MSE followed this up also? Keep on fighting, I am sure we will get some justice. Anyway, why were they refunding out of Goodwill early last year, because they knew they were in the wrong obviously!

MCSAVE

A running credit account is classed by the CCA as "a facility under a consumer credit agreement whereby the debtor is enabled to receive from time to time (whether in his own person, or by another person) from the creditor or a third party cash, goods and services (or any of them) to an amount or value such that, taking into account payments made by or to the credit of the debtor, the credit limit (if any) is not at any time exceeded."
A fixed sum credit agreement is "any other facility under a consumer credit agreement whereby the debtor is enabled to receive credit (whether in one amount or by instalments)."
So there is no mention of fixed monthly payment amounts, the main difference being that running credit has a limit you can borrow up to and a fixed account borrows an agreed amount of credit, but there is no ability to borrow up to a "limit" in other words it's just one pre agreed debt not rolling credit like a credit card. After 2010 I was not allowed to borrow "up to a limit" as described in the running credit account definition as the limit was taken away, even the adjudicator agreed that the limit was removed as he made Santander rectify my credit file to show that there was no limit as there had been when I first took my loan out and he detailed that in his decision to me. If there were breaches of running account credit rules prior to 2010 in your statement then great, but I can't see how it can still be that type of account now, as it doesn't fit the definition, which is why I'm claiming that they shouldn't have charged me interest since 2010,due to the errors in my statements, as per my last post.

bagpuss27

... and my letter arrives today, pretty much as described by others received.....:mad:

DJTASK

MCSAVE, its not my intention to disagree with you. I'm no expert on financial matters and hence its very likely that I could be wrong !!!

The reason I had concluded that the flexi-loan was still classed as running account credit were:

1) It used to be prior to removal of the borrowing facility
2) Our credit agreement had not changed at this point. I'm sure for such a major change they would have needed to formally do so.
3) Technically, Santander had enacted a clause in our agreement allowing them to withdraw the facility, this did not change the agreement in other ways
4) They could at any point reinstate the facility
5) When you refuse an interest rate increase on a credit card, the same thing happens i.e. your borrowing is withdrawn, but the rest of the agreement remains.
6) We get monthly statements
7) We don't get annual statements
8) Santander includes the requirements in their monthly statements of para's 1 and 2 of Schedule 2 of the act. This is not required for a fixed scheme.
9) Santander still describe it as a flexi-loan on the monthly statements

However, your points are most valid as well and could easily see the product now classed as a fixed sum agreement

To be honest it makes little difference as Santander are not compliant with the CC act either way round. If its fixed sums, then they have never sent annual statements - a clear breach. It its rolling credit, then there is no statement as required in para 4 Sch 2, again a clear breach.

If fixed sum breach, then we should be able to claim interest back to the withdrawal of the borrowing facility in Dec 2010. If rolling credit, assuming the online statements were not compliant either, then we should be able to claim interest back to the start of the recent changes to the act i.e. Oct 2008, otherwise Dec 2010.

My primary concern is to prove that Santander have done us wrong. I don't care how, but they deserve to be made to pay for their abuse of us customers.

A question to finish. This "new" complaint of breach of the CCA. I've included it in my response to the FOS as part of the original complaint. Should I however raise it as a new complaint, in which case do I complain to Santander first or just go straight to FOS?