Miss sold Loan

essex21

I have recently found out that a loan company sold me their loan when they knew that they were going to change terms as the loan was not profitable for them. I was sold the loan under old terms and not advised that these terms would be changing. Have I been miss sold the loan?
If I have been miss sold (also discussing with Ombudsman) what does that mean? Should I be able to carry out the loan under the terms it was sold to me with? Am I entitled to compensation for financial hardship the new terms have caused me?
(Ombudsman taking ages to respond)
Thanks for any comments.

Hanky_Panky

What do the terms and conditions of the loan you signed say. If you agreed to the changes by signing you haven't been mis-sold anything.

Tixy

What terms changed and in what way and from when did those changes apply to your loan?

Gaz83

Just as importantly, how do you know that they knew their terms would be changing?

essex21

Trying to keep this short and not complicated.......
I applied for the loan 2003 but did not draw any money. In 2006 the loan company sent me a letter questioning if I could make use of the money it had offered in 2003 under the same terms and interest rate (10% variable) I was considering some home improvements so took the loan. I have recently found out that the product that I took in 2006 was no longer being sold to new customers and had be taken off the market. It appears that they were targeting people who had not gone through with the loan initially so they did not have to disclose the changes they were about to make to the loan. The Obudsman has confirmed that they could not legally sell this failing loan to new customers. My argument is, can I really be considered an existing customer as I had never used the loan facility? In 2006 I had other options for my home improvement loan. If the loan company had told me in 2006 they had withdrawn the product because they were having problems with it I would not have taken the money from them and got it elsewhere.
They started to increase interest rates after one month of me taking the money. I was not notified of the increases. They continued to take the same amounts by direct debit so my bank statements did not alert me to the rises that were happening. Apparently I was supposed to log in to an online facility which would have shown me notifications of the increases. The terms I signed and that were in place when I took the loan do not mention that they would only notify me online of increase.
In 2010 I contacted the loan company as I wanted to know a settlement figure. When they gave me the amount I asked how that could be as I had been paying the loan for 4 years so it should almost be clear. It was at that time they mentioned my interest rate was now 20%!! After a short conversation it was agreed that I would write to them and they would send me statements of my account showing the interest rate rises since 2006. The loan was then taken over by another company and many emails, letters, phone conversations later…….. (2 years later) I got the statements.
I have sent my case to the Ombudsman asking that the loan should be calculated at the original interest rate of 10% as I was not notified of the rises. I have also requested that as it took 2 years for the loan company to send statements that interest during the 2 years should be 0%. It is from initial correspondence from the Ombudsman that I found out that the loan had been withdrawn from the market in 2006 when I was sold the loan, that is why I am wondering if that is miss selling and what I should expect as an outcome of miss selling? If they were not able to sell to new customers why could they sell it to me?
Thanks in advance of any comments

essex21

They have disclosed this information to the Ombudsman during the initial enquiries

Tixy

I think the fact that the loan product had been withdrawn to new customers is not relevant to your possible case. You were happy with the terms at the point you signed the loan agreement and received the money. You knew it was a variable loan.
A different loan product, if you were approved for it may have had a higher APR (in fact presumably it would have done if the company were finding that the previous product was not financially viable for them).

However it is possible you may have a case that you should have been informed of the rate rises by more than an online account (assuming the terms don't specifically state this is how you would be informed).
If they didn't then I would certainly try to argue that the loan should be recalculated based on the original interest rate up to the date you were informed by letter of the new interest rate.

I can't imagine you would get anywhere with the suggestion that the no interest be charged for the first 2 years. You knew interest was being charged, and whilst they should have sent a statement at the end of the first year the fact that they didn't shouldn't mean you don't pay interest.

essex21

Tixy wrote: »

I think the fact that the loan product had been withdrawn to new customers is not relevant to your possible case. You were happy with the terms at the point you signed the loan agreement and received the money. You knew it was a variable loan.

However it is possible you may have a case that you should have been informed of the rate rises by more than an online account (assuming the terms don't specifically state this is how you would be informed).
If they didn't then I would certainly try to argue that the loan should be recalculated based on the original interest rate up to the date you were informed by letter of the new interest rate.

I can't imagine you would get anywhere with the suggestion that the no interest be charged for the first 2 years. You knew interest was being charged, and whilst they should have sent a statement at the end of the first year the fact that they didn't shouldn't mean you don't pay interest.

You have miss understood. I am asking that 0% should be applied as they failed to send me information for 2 years after I first requested it. This information was asked for in 2010 and I did not receive it until 2012. I stopped paying them in 2010 as they were not providing information, statements etc. I do not feel I should pay interest for the 2 years they failed to supply basic information, or for the time of my complaint with them. Is there a law on how long loan companies can take to respond and keep adding interest?Thanks for your comments, very helpful

dealer_wins

essex21 wrote: »

You have miss understood. I am asking that 0% should be applied as they failed to send me information for 2 years after I first requested it. This information was asked for in 2010 and I did not receive it until 2012. I stopped paying them in 2010 as they were not providing information, statements etc. I do not feel I should pay interest for the 2 years they failed to supply basic information, or for the time of my complaint with them. Is there a law on how long loan companies can take to respond and keep adding interest?Thanks for your comments, very helpful

Until its repaid?

Tixy

Lenders should send annual statements.

They should have responded to your written request for historical information on rates rises and statements etc, but I do not believe there is specific legislation that gives a timescale for replying to a letter.
If they hadn't replied to you I wouldn't have waited 2 years for it but would have requested via a subject access request under the data protection act. This would have meant they were required to supply the information in 40days and so would have given them a specific timeframe that they needed to adhere to.

I still don't think the argument that no interest should be chargeable during that 2 years holds any water, but could understand an argument that keeps the rate at the previously advised rate for that 2 year time frame.

Caz3121

essex21 wrote: »

The loan was then taken over by another company and many emails, letters, phone conversations later…….. (2 years later) I got the statements.

essex21 wrote: »

I stopped paying them in 2010 as they were not providing information, statements etc. I do not feel I should pay interest for the 2 years they failed to supply basic information, or for the time of my complaint with them.

Was the loan taken over by another company when you stopped paying them (did they pass it to a debt collector?) Had they agreed to cease payments whilst you were in dispute. I would imagine that this would be a default and fees for missed payments and additional interest.
What do your credit files show?
Did you start repayments when you received the statements?