Double Glazing Nightmare for Elderly Parents

little_miss_thrifty

H, i'll try to make this as clear as poss. Thanks in advance for any help/suggestions.

My parents who are both now retired had some double glazing fitted in 1998. The loan was through First Direct, with a loan amount of 6848.00 plus 102.72 administration fee. The interest rate was 20%apr. The monthly payment was £160.79 and it states on the credit agreement that "the number of monthly payments is not fixed but the usual number is 120".

My parents paid by Direct Debit and have never missed a payment.

Fast forward to now and my dad requested a settlement statement, to see how much he had left to pay and was astounded to read that the amount now required to settle the account is now £8336.17.

He is absolutely beside his-self with worry, thinking that for the last 9 years he has paid out way more than the original £6800 for the windows, and now he has got to pay it all again. I can't see a way of the payments ever stopping!

Is there anything we can do?
Many thanks, LMT

CLAPTON

the loan would probably have been under the rule 78 system.
however, the figures dont seem correct.
can you check

a. was the interest rate fixed?
b. was PPI added?

little_miss_thrifty

CLAPTON wrote: »

the loan would probably have been under the rule 78 system.
however, the figures dont seem correct.
can you check

a. was the interest rate fixed?
b. was PPI added?

Hi, thanks for reading - as far as the agreement reads "PHI-Variable Rate" and "Interest rate 1.5% per month (or as varied) APR 20.0%. which is calculated on the basis that there will be no change in the Interest Rate.... We may, for commercial reasons, vary the interest rate at any time... We will give you at least 7 days written notice..."

They have not received yearly statements as previously promised, but it looks as though they have paid a constant 160.79 per month. The insurance premium has been £47.41 and then interest of £115.43 (albeit the pence varying) totalling £160.79.

The PPI box has been ticked, probably as my parents were working at the time, but I will assume they didnt totally know what it entailed.

P.S what is the rule 78 system?

CLAPTON

i cna't work out how the settlement gigure can be that high but what can you do

a. you need to establish how long the loan will take to pay off with the current rate of repayments

b. ask them to supply a statement of the account showing how the current balance was arrived at.

little_miss_thrifty

Thanks for replying Clapton - have requested a breakdown of the account, but going through it last night, it seems as though although they have paid a fixed monthly amount (£160), the premuims and insurance they were paying actually added up to £162, then a few months later they increased to £163, then £164, slowly but surely the odd few pence increased. My parents have presumed that the written monthly amount would pay off their loan, whereas in fact it hasn't even touched it.

I phoned Consumer Direct this morning and relayed the story and a representative of theirs is coming to see me on Monday morning to look at all the paperwork. Fingers crossed he finds something to help us.

WendyA

Have a look at this thread http://forums.moneysavingexpert.com/showthread.html?t=117175 as retired people are rarely covered for PPI so they may not need it any more and may even be able to get some money back.

little_miss_thrifty

WendyA wrote: »

Have a look at this thread http://forums.moneysavingexpert.com/showthread.html?t=117175 as retired people are rarely covered for PPI so they may not need it any more and may even be able to get some money back.

Hi, thanks for reading the thread - i have just spent the last 2 hours reading the above thread, which has provided some very useful info. Tomorrow i shall go to my parents and call HFC Bank from there. As HFC are under HSBC, i may have to complain to them. I'll try with a phone call in the first instance!

Many thanks.

little_miss_thrifty

*Update*
Phoned HFC bank and asked for an up to date settlement figure (which is now at £8500!) - he couldn't tell me whether PPI was included or not. I asked him to find out and recalculate on the basis that from the date of this phone call i want it cancelled - he said i have to write in a request (stall, stall). I also asked as the PPI had never been used, were my parents likely to get it refunded; he said well no because you haven't claimed it, you just had to pay it. I asked him why is it then that why would my father take out an insurance and not claim on it if he knew he had it? He had to take early retirement 4 years ago because of ill health, why would he not have claimed on it then? I am presuming therefore he did not know he had it and has therefore been mis-sold it.

'Oh' he said. 'Well thats a different matter and we would have to investigate that'

Small, but cautious progress perhaps???

margaretclare

We had a loan from First Direct about 5 years ago, this was to get the kitchen re-done (Magnet Kitchens).

I was given to understand at the time that it's a type of loan which is considered 'convenient' for older people, with a 'manageable' repayment over 10 years.

The monthly payments were £85 over 120 months, started in December 1999 and settled in May 2002, so we repaid it in 2 1/2 years instead of 10. The kitchen cost about £4,500 (from memory). The rest of the details are on my Experian credit report. However, the crucial point is this - if we'd paid this off over 10 years, £85 x 120 months is £10,200!

And no, there was no insurance on this. Retired people don't lose their income through redundancy etc, so the providers of this type of loan are on to a winner. We could have gone on 'conveniently' paying off the 'manageable' £85 a month and we might never have noticed that we were paying a huge amount, over time, of interest.

It's the old 'buyer beware' again! Just because you're 'elderly parents' doesn't remove the responsibility of checking all these details carefully and reading the small print. MY DH, aged 72, was recently offered an £8,000 loan from Barclays (he hadn't asked for one) to be repaid over 3 years, and the letter did state that the total repayment would be £11,000. He laughed, shredded the letter and said 'Do they think we're all that stupid, born yesterday?'

Margaret

little_miss_thrifty

margaretclare wrote: »

The monthly payments were £85 over 120 months, started in December 1999 and settled in May 2002, so we repaid it in 2 1/2 years instead of 10. The kitchen cost about £4,500 (from memory). The rest of the details are on my Experian credit report. However, the crucial point is this - if we'd paid this off over 10 years, £85 x 120 months is £10,200!

And no, there was no insurance on this. Retired people don't lose their income through redundancy etc, so the providers of this type of loan are on to a winner. We could have gone on 'conveniently' paying off the 'manageable' £85 a month and we might never have noticed that we were paying a huge amount, over time, of interest.

It's the old 'buyer beware' again! Just because you're 'elderly parents' doesn't remove the responsibility of checking all these details carefully and reading the small print. MY DH, aged 72, was recently offered an £8,000 loan from Barclays (he hadn't asked for one) to be repaid over 3 years, and the letter did state that the total repayment would be £11,000. He laughed, shredded the letter and said 'Do they think we're all that stupid, born yesterday?'

Margaret

Good for you being of such an age and never falling foul to such deeds!:T
Have you spent the day telling people who are overweight that it is all their own silly fault too?

This website is here for people who unfortunately have got themselves into some big or small trouble and all they ask for is some POSITIVE advice, not to be lectured on 'you should have read the small print'

If you have nothing constructive to say, please don't say it

jonesMUFCforever

Sorry I disagree.

If people did take a few minutes to actually read what they are signing then a lot of the problems on these boards would not exist.

I think a lot of people are afraid to say to the lenders 'sorry I don't understand this can you please explain' for the fear of looking stupid.