Right to refund of interest - please help

grastaff

Hi
can anyone advise me please, what rights do I have to expect a refund on interest applied to goods bought through Littlewoods catalogue on buy now pay later once the entire interest has been added to the total.

I want to pay early (although after the buy now pay later period) and in the past Littlewoods have provided an early settlement figure that included a refund of interest calculated up until an agreed payment date - seemed reasonable. However now they are backtracking and saying that once the interest has been applied it cannot be refunded and I will have to pay the full amount even if I pay early. This means I will be paying more in interest than the original cost of the item. What are my rights?:eek:

fluffnutter

What do their T&Cs say?

Elle7

grastaff wrote: »

Hi
can anyone advise me please, what rights do I have to expect a refund on interest applied to goods bought through Littlewoods catalogue on buy now pay later once the entire interest has been added to the total.

I want to pay early (although after the buy now pay later period) and in the past Littlewoods have provided an early settlement figure that included a refund of interest calculated up until an agreed payment date - seemed reasonable. However now they are backtracking and saying that once the interest has been applied it cannot be refunded and I will have to pay the full amount even if I pay early. This means I will be paying more in interest than the original cost of the item. What are my rights?:eek:

This makes no sense.

To avoid interest, you need to pay within the buy-now-pay-later period. So, if its 12 months, within the 12 months. If you are outside of the 12 months, they'll apply interest for all of the time within the period. This is all in the T&Cs, and is generally how BNPLs work.

If you are paying outside of the period, you'll have to pay the 12 months interest alongside any interest calculated up to when you do pay, which I should think would be expensive - its how Littlewoods make their money from this type of arrangement.

grastaff

Elle7 wrote: »

This makes no sense.

To avoid interest, you need to pay within the buy-now-pay-later period. So, if its 12 months, within the 12 months. If you are outside of the 12 months, they'll apply interest for all of the time within the period. This is all in the T&Cs, and is generally how BNPLs work.

If you are paying outside of the period, you'll have to pay the 12 months interest alongside any interest calculated up to when you do pay, which I should think would be expensive - its how Littlewoods make their money from this type of arrangement.

Interest calculated after 12 months buy now pay later over the extended term requested i.e. 156 months. Previously when I asked for settlement figure about 6 months into this period they provided me with a figure that calculated the interest only for the period it took me to pay off the debt i.e. 6 months interest. They are now saying that even if I wanted to pay just a month or so into the period (i.e. with say 153 months left on the original agreement) I would have to pay the whole amount of interest i.e. paying interest over 156 months but credit required only for 3 months due to changing circumstance.

This can't be right can it?:(

unholyangel

grastaff wrote: »

Interest calculated after 12 months buy now pay later over the extended term requested i.e. 156 months. Previously when I asked for settlement figure about 6 months into this period they provided me with a figure that calculated the interest only for the period it took me to pay off the debt i.e. 6 months interest. They are now saying that even if I wanted to pay just a month or so into the period (i.e. with say 153 months left on the original agreement) I would have to pay the whole amount of interest i.e. paying interest over 156 months but credit required only for 3 months due to changing circumstance.

This can't be right can it?:(

If you're asking if they're allowed to do this then yes technically they are. You've agreed to take out a credit agreement over x months for x amount. You're effectively wanting to breach/amend that contract by ending it early. Have you received any paperwork for the agreement?

wealdroam

OP, please re-read post #2. It is important.

Elle7

grastaff wrote: »

Interest calculated after 12 months buy now pay later over the extended term requested i.e. 156 months. Previously when I asked for settlement figure about 6 months into this period they provided me with a figure that calculated the interest only for the period it took me to pay off the debt i.e. 6 months interest. They are now saying that even if I wanted to pay just a month or so into the period (i.e. with say 153 months left on the original agreement) I would have to pay the whole amount of interest i.e. paying interest over 156 months but credit required only for 3 months due to changing circumstance.

This can't be right can it?:(

Right, so you had 12 months paying nothing, and then if you hadn't paid it off within that time you were going to pay £xx per month for 156 months, and this was with 30% interest or something?

Looking at the T&Cs, you'll have had 12 months interest added at the end of the BNPL agreement :eek:

Then you've started a new agreement to pay £xx per month, and they way I believe Littlewoods work is that they add this interest up front.

So if you'd bought something for £50, at 30% interest, it would be £93.20 interest or something, and then at 30% for 156 months there would be another £561.60 worth of interest to pay...so £654.80 altogether, and the last figure is what they are asking you to pay, with all the interest?

(The figures may not be great, its for illustration, although I think I've got it right :rotfl:)

In that case, I think they are entitled to do so. Reading through the terms and conditions, it doesn't allow for early repayments, and it does say if you accept the conditions for interest-bearing payments the interest will be added on up front.

Your minimum payment will depend on the period over which you decide to purchase, and for longer payment terms, the interest rate that applies. It will include one fifth of the outstanding balance for your purchases made on 20 week interest free terms. If you buy using our longer interest free terms the minimum payment will also include an amount equal to the cost of the goods divided by the number of statement periods in the selected repayment term.

For instance, for purchases over 52 weeks, it will be the price of the goods divided by 13. For purchases on interest bearing terms, we calculate the full interest which will be payable over the chosen repayment term and add this to the cost of the goods. We then divide this total by the number of statement periods in the chosen term to produce the minimum payment for those purchases.

Was it a high-value item? What type of figures are you talking? It might affect how willing they would be to give you some goodwill here.

Meepster

156 months? That's 13 years!

bod1467

It'll have been 156 weeks - 3 years.

Elle7

bod1467 wrote: »

It'll have been 156 weeks - 3 years.

That might be why the interest seemed so shocking then :rotfl:

I didn't even notice.

Meepster

bod1467 wrote: »

It'll have been 156 weeks - 3 years.

Elle7 wrote: »

That might be why the interest seemed so shocking then :rotfl:

I didn't even notice.

I've just been on the website and had a look. You pay it over 2 or 3 years.

And there was me thinking Littlewoods were giving the payday loan companies a run for their money

(And to be fair, it was the OP who mentioned months, so you aren't cracking up lol)