cash generator

sally26_2

Hi,

Some urgent advice needed. I pawned an item there and borrowed 140 gbp which was due to be repaid today, ) I was only going to renew the loan for another 28 days and pay 42 pounds interest).I could not get out of work so phoned them and asked them if they could keep the item until Monday. (I have done this before but at a different shop and they charged me an extra 2 pounds for the service).

Anyway they said they could keep it until Monday but instead of it costing me 42 it would cost double at 84. So basically they are charging double the amount for an extra day. I argued back and forth with them but they insisted this would be the charge even though the shop up the road is only charging 2 pounds for this service. there is nothing in the contract about this.

Should I report this to trading standards and is there any way this could be illegal I need to know before Monday Thanks

nyc_451

All the costs and charges should be mentioned in the contract and you should be informed about it when signing it as well. Unless you signed some documents and didn't get a copy of it, then it's easy to forget what you signed up for. Try to speak to their head office first, they are usually on the customer's side. And it's really easy to waive the charges!

It sound more like a pay day loan to me - 28 days, 30% monthly interest, big charges for being late one day...

UsetheFORCE

sally26 wrote: »

Hi,

Some urgent advice needed. I pawned an item there and borrowed 140 gbp which was due to be repaid today, ) I was only going to renew the loan for another 28 days and pay 42 pounds interest).I could not get out of work so phoned them and asked them if they could keep the item until Monday. (I have done this before but at a different shop and they charged me an extra 2 pounds for the service).

Anyway they said they could keep it until Monday but instead of it costing me 42 it would cost double at 84. So basically they are charging double the amount for an extra day. I argued back and forth with them but they insisted this would be the charge even though the shop up the road is only charging 2 pounds for this service. there is nothing in the contract about this.

Should I report this to trading standards and is there any way this could be illegal I need to know before Monday Thanks

They are charging double because you wish to redeem/renew the item into the next charging period, I doubt they are doing anything wrong but cannot be sure without seeing the terms and conditions.

For the record, if you pawned the item on Day 1 but chose to get it back on Day 2 rather than Day 28, it would still cost you the £42!

In theory, they could say NO and you would lose your item as at close of business today!

sally26_2

Thanks Guys I will phone head office.

I was not going to redeem the item just back it up for another 28 days

[Deleted User]

most branches are franchises that will explain why they do things differently

Thrugelmir

sally26 wrote: »

Should I report this to trading standards and is there any way this could be illegal I need to know before Monday Thanks

Is legal.

If we do refinance, you'll have to pay the loan fee that's due on your original loan date. This allows us to extend your current principle balance until your next available pay date. At that time you'll owe the full principle amount, plus the loan fees for the added time of your finance.

All the information is on their website.

nyc_451

Thrugelmir wrote: »

If we do refinance, you'll have to pay the loan fee that's due on your original loan date. This allows us to extend your current principle balance until your next available pay date. At that time you'll owe the full principle amount, plus the loan fees for the added time of your finance.

And where is it saying in this quote that she would have to pay extra 42 pounds for being late a day? It only says: if you borrow 100 and on due date want to extend it by paying 30 pounds, the next month you still owe 130. Don't even understand why you highlighted that part.

Please explain to me, the fool...

Denning.

blue_mango wrote: »

And where is it saying in this quote that she would have to pay extra 42 pounds for being late a day? It only says: if you borrow 100 and on due date want to extend it by paying 30 pounds, the next month you still owe 130. Don't even understand why you highlighted that part.

Please explain to me, the fool...

Your borrow £100 for March, you pay £100 (principle) + £30 (interest) = £130 on 31st March.

You can't repay that, so you ask to refinance, they extend the loan to 31st April, but you must repay March's interest first. In effect, it is a new loan for April.

March 1st - Borrow £100
March 31st - You pay £30 (March interest)
April 31st - You pay £100 (principle) + £30 (April interest)

nyc_451

Denning. wrote: »

Your borrow £100 for March, you pay £100 (principle) + £30 (interest) = £130 on 31st March.

You can't repay that, so you ask to refinance, they extend the loan to 31st April, but you must repay March's interest first. In effect, it is a new loan for April.

March 1st - Borrow £100
March 31st - You pay £30 (March interest)
April 31st - You pay £100 (principle) + £30 (April interest)

Yes, so that's how pay day loans work in our company as well. I just don't understand why the OP has to pay double amount just for being late one day. She didn't say those extra 42 pounds would cover next month's interest but would only be the charge for being late which doesn't make sense to me, especially because it's a pawnbroking loan.

UsetheFORCE

These companies normally charge a 'fee', which tends to be a percentage of the amount borrowed and for this 'fee', they give you upto X amount of days to redeem or extend the loan.

The 'fee' in this case is £42 for a period of upto 28 days, if you want to extend the loan beyond 28 days then you will be liable to pay a further 'fee' of £42.

This is regardless of whether you redeem it 1 day later or 28 days later.

UsetheFORCE

blue_mango wrote: »

Yes, so that's how pay day loans work in our company as well. I just don't understand why the OP has to pay double amount just for being late one day. She didn't say those extra 42 pounds would cover next month's interest but would only be the charge for being late which doesn't make sense to me, especially because it's a pawnbroking loan.

This isn't a pawnbroker as such, the pawnbroker I use gives me up to 7 months to redeem my item and only charges 8% a month. If you redeem early then they only charge you interest for each part or complete month that has elapsed since you took out the loan.


These companies, Cashconverters, moneytraders etc... charge a fee of around 30% a period for a 28 day/monthly loan.


The loan period is 28 days for a fee of £42, the OP wants to redeem/extend the loan. This is say 30 days (beyond the 28) so another 'fee' is due...£42.

If the OP then wants to extend the loand for another 28 day period then they wiould need to agree to pay yet another £42 fee...