DMP & Mutual Support Thread - Part 10

fermi

The FOS can sometimes be very good.

An example:

Ref: DRN4852305

complaint

Mr A complains about a store card account he has with Home Retail Group Card Services
Limited (trading as Argos Card Services). He is on a debt management plan but is unhappy
that interest is still being applied to the account which is equal to almost half of what he
repays each month. He feels that Argos Card Services has not responded sympathetically to
his financial situation.

background

The adjudicator who considered the case recommended it be upheld. He noted that Argos
Card Services had made some concessions by reducing the amount of interest that is
charged on the account and had accepted reduced payments. However, he felt the
concessions were insufficient in this instance and recommended Argos Card Services refund
the interest and charges that had been applied to the account since November 2011; reduce
the interest rate to 0% going forward and pay £250 for the distress and inconvenience
caused.

Argos Card Services did not accept the adjudicator’s findings and believes it has dealt with
Mr A’s circumstances fairly. It is not prepared to refund the interest applied, reduce the
interest to 0% or make a payment for the distress and inconvenience.

The case was reviewed by a second adjudicator who agreed with the overall opinion of the
first adjudicator. He felt however that the proposed payment of £250 was higher than what
an ombudsman might award in the circumstances here and felt a payment in the region of
£150 was more likely.

Mr A was unhappy about this and, in summary, feels the original £250 should be paid.
my findings

I have considered all the available evidence and arguments to decide what is fair and
reasonable in the circumstances of this complaint. Having done so, I have upheld this
complaint.

Argos Card Services believes that it has dealt with Mr A’s financial difficulties fairly by
reducing the interest rate on his account and accepting reduced repayments every month. It
says the interest rate on the account is variable and instead of the 29.9% APR it can reduce
the interest to between 0% and 9.9%. I accept that by agreeing to reduced repayments and
reducing the interest by 20%, so that 9.9% is being charged, is a positive step towards
helping Mr A in his position of financial difficulties. However, Mr A can only afford to repay
£20.45 each month and the interest charges are still approaching half of what he is repaying
each month.

Mr A has been on a debt management plan since November 2011 and having considered
his circumstances and level of outstanding debt it is unlikely that his circumstances will
change considerably in the near future. At the current rate of repayment and level of interest
that is being applied it will take up to ten years to repay the outstanding balance on the
account. Even if no further interest or charges are applied to the account the debt will still
take almost five years to repay.

As Mr A is in financial difficulties Argos Card Services is required to treat him in a positive
and sympathetic manner. Having considered the specific circumstances of this case I agree
with the adjudicator that although concessions have been made, these do not go far enough.
Argos Card Services has accepted it can reduce the interest rate to 0% and that its
measures are designed to be temporary and assist consumers in the short term. Mr A is not
in short term financial difficulties, as demonstrated by the fact that he is still on the debt
management plan almost two years later. Unless he has a significant change of
circumstances it is likely he will still continue experiencing the same financial difficulties for
some considerable time yet.

Having considered the steps that Argos Card Services has taken I think it could and should
have done more to assist Mr A in his position of financial difficulties. I do not think that in the
circumstances here that charging the amount of interest was reasonable and Argos Card
Services should now refund the interest and any charges that have been applied since
November 2011. It should also ensure no further interest is applied to the account.
I agree it is reasonable to periodically review Mr A’s circumstances but unless his
circumstances improve significantly it would be unreasonable to restart applying interest to
the account.

I also agree with the adjudicators that Argos Card Services’ failure to treat him in a positive
and sympathetic way has caused him distress and inconvenience. I have considered what
Mr A has said about the proposed payments by the adjudicators and the other broader
issues that he has referred to in his personal life. Having carefully considered the
circumstances of this specific case I think a payment of £200 to be fair and reasonable and
Argos Card Services should therefore make this additional payment directly to Mr A.
I appreciate Mr A may remain unhappy about the level of this award but I am satisfied it is an
appropriate amount.

my final decision

My final decision is that I uphold this complaint and direct Home Retail Group Card Services
limited (trading as Argos Card Services) to:

• refund all interest and charges that have been applied to this account since November2011;
• ensure no further interest is applied to the account, unless it is clear that Mr A’s circumstances have improved significantly; and,
• pay £200 to Mr A for the distress and inconvenience he has been caused.

Sazzie23

Lighthelamp wrote: »

I recieved my first default notice today from Nationwide along with a letter saying they are accepting my SC payment. This is a good thing, right? I assume I will get one from each company.

Hi Lamp,

Yes it's a good thing, (although it often doesn't feel like it),
You may not get one from each company, I only have 2 defaults out of 6 creditors and to answer Slothy's first question, the accounts are marked as up to date and not AP although I clearly don't make the full payment only the agreed amount.

Quote Slothy88.

'Second (This isn't directly related to DMPs but I figure someone will have some knowledge about this), let's say best case all of my creditors apply a default in month one, and it takes me 3 and a half years to pay off my debts owed, leaving 2 and a half years until my credit file is 'clean' again - if I was to apply for a joint mortgage with my boyfriend who has a completely clean credit file, would we still be more likely to be rejected? We will be looking to buy a house once I'm debt free, and ideally I don't want to have to wait six years plus (dependent on defaults/APs applied) or get a mortgage just in his name/salary, but it would be good to know if anybody has been in a similar situation. '

I dunno if it helps but I had to remortgage this year, 18 months into DMP due to the underpaid endowment section of mortgage. The company I was with allowed me to do this, without questioning, however this was pre- 2014 rules change.
I suspect it will be even more difficult to do this now? Be interesting to see what experiences anyone recently remortgage has had, maybe need to post this on the main board.

Sazzie23

nottoolate wrote: »

can someone help here. to complain about interest and changes. to fos.

know some people have had charges stopped an even refunded by threatening or going to the fos
:cool:
Feel let down by Stepchange. How can I help myself?

Hope info from Ferni and TTFTm helps, I think you make a good point about SC and I'd like to use this to remind everyone, no matter who you are in DMP with, keep track of your balances, check if you are being charged interest or late payment and fight it early if you are.

Don't sit back and just think the balances are going down because the SC statement says so, they only use estimated balances.

(Note to self, update balances on SC for November)

I love my spreadsheets and they help me track the debts month by month.

TimeToDoIt

Ah nice one

I posted last night and it seems you've responded so thank you!

lewpster

Hi everyone

Had a bit of a rubbish month as I've no emergency fund and had to pay £75 for a new windscreen which doesn't seem a lot but it is to me Stressing how I can afford the rest of my Christmas bits so need to be super, super good in December and cut back where i can. I don't go mad but have to get a few little bits still.

Spoke to Stepchange and I am paying £105 next month instead of £180 and they even said to lower my budget. My debt free date is like 2027 at the moment which is awful.... but I have to keep telling myself things will soon even out, expenditure better next year when loan to family finishes and membership fees are paid so that saves me £100 a month in summer. Just hard But I am doing something positive and this is the first month my debt has come down for many years

Had another default letter yesterday, so out of 6 cards, that's 2 defaults. That's a good thing isn't it in a weird way as I only started DMP this month x

Puzzcat

Sazzie23 wrote: »

Hi Lamp,

Yes it's a good thing, (although it often doesn't feel like it),
You may not get one from each company, I only have 2 defaults out of 6 creditors and to answer Slothy's first question, the accounts are marked as up to date and not AP although I clearly don't make the full payment only the agreed amount.

Hi,


Not sure where you check your credit file, but I found that on noddle where I do mine, on the main page it shows up to date and green for those not defaulted but when I expand the page it show AR etc.. Just a thought you may want to check if you haven't done this.. ignore me if you have and are just lucky..!


Puzz. x

Kate_fixing_it

Puzzcat wrote: »

Hi,


Not sure where you check your credit file, but I found that on noddle where I do mine, on the main page it shows up to date and green for those not defaulted but when I expand the page it show AR etc.. Just a thought you may want to check if you haven't done this.. ignore me if you have and are just lucky..!


Puzz. x

To add to this I have the same showing as Puzz but the mobile display and Web page displays are different. The mobile one says UC on each green dot for one account and plain green on another, that plain green changes to AR on the full website.

Definitely worth double checking in both views.

Kate x

Time_to_face_the_music

Kate_fixing_it wrote: »

To add to this I have the same showing as Puzz but the mobile display and Web page displays are different. The mobile one says UC on each green dot for one account and plain green on another, that plain green changes to AR on the full website.

Definitely worth double checking in both views.

Kate x

Great advice Kate :T

It took me ages to realise you could expand the fields to see more information on Noddle and hover over the notes to read them

TTFTM x

Kate_fixing_it

Now I have a "what do you think?" query.

Creation have come back with a counter F&F offer. 80%. £518 off the total. What's bugging me is that £300 of the total is interest they've charged since I started the DMP

The woman on the phone hinted that if I called back later and offered 68% they might go for it.

What do you think?

Kate x

Slothy88

On the subject of F&Fs, does making a reduced final payment do any more damage to your credit file, i.e. will it add yet more years onto being 'marked' or does it look particularly worse to lenders? (Asking for mortgage purposes again). When I asked the lady at Stepchange she seemed to think it wasn't a great idea as it shows up on you file as only being partially paid.