Problems with Barclaycard

TheAnt_2

Hi all.

I'm looking for some advice on how to deal with the situation Barclaycard are putting me in.

Until February this year I was in a DMP with StepChange. However, in my last review, they insisted on adding a loan of my partner's to my plan, as I am a guarantor, even though she is servicing this debt herself. As a result, I left StepChange and contacted MBNA and Barclaycard to enter into a direct arrangement with both to pay off my debts.

This seemed to go fine. Both companies kept me on the reduced rate of interest and allowed me to pay £200/mth to clear the balance.

Then 3 months later, I get a statement from Barclaycard showing they've put me back on to the full rate of interest on my repayments, which basically means £150 of every payment is swallowed up in interest. At this rate, it'll take me 16 years to pay off the debt, and don't they know it!

I have had numerous phone calls with them to find out why they have done this, and it boils down to the fact that because the £200/mth repayment is more than the minimum payment, they don't consider me to be in financial difficulty and therefore will not reduce the interest charges.

All I want to do is pay off this debt in a reasonable timeframe and not see each payment have a gargantuan bite taken out of it by interest. I thought there was some consumer protection available to help us with this, right?

I have told Barclaycard I will write to the Financial Ombudsman about this, but are they likely to help?

Is there anything I can do to 'demand' Barclaycard reduce/freeze interest charges and accept the £200/mth?

I would like to have kept things going with StepChange, but their behaviour over my partner's loan, along with some really snooty attitude from some of their phone advisers means I don't really want to deal with them anymore.

Stewart_78

I don't think you can demand anything, no. My advice would be to 'review' your budget and find that you suddenly have far less money to give them. Cut your payment to £20 a month and save the rest in an unrelated account. They will stop interest, you will earn interest and at some point you may get a better final settlement figure as you are paying it off more slowly.

I'm sure I'll get flamed for this but it's only playing them at their own game. I think that if lenders have the right to put whatever they like on our credit files, they should lose the right to charge interest to anyone on a DMP.

Also you need to make sure that they properly default the account and not just put AP or AR markers on it every month or you will find that your account is destroyed for 6 years from the day you settle it, not the day of the default.

Stewart_78

Also, how old are these accounts? If they were opened before 2007 there is a good chance that the lenders won't even have the correct documentation they need to legally enforce the debt. Look up CCA request.

sourcrates

To be honest you would be far better off if you stopped paying Barclaycard.
Wait until they sell the debts on, which they will, usually in around 3-5 months or so.
Then negotiate with whichever DCA picks it up, there will be no more interest or charges, so you can make an affordable payment and reduce the debt.

TheAnt_2

Thanks both.

Sourcrates - that's a really interesting suggestion - do I not risk having penalty charges applied in the interim though?

sourcrates

TheAnt wrote: »

Thanks both.

Sourcrates - that's a really interesting suggestion - do I not risk having penalty charges applied in the interim though?

Yes they may ad more charges, doesn't mean you have to pay them though.
Advocating non payment is not something I would advise lightly, but when a creditor is being belligerent, despite your best efforts, you need to re-take control of the situation.


Be warned, DCA`s are not always the easiest people to deal with, and the debt will go to BC "in-house debt collectors" first, Mercers, who are as useless as BC.
You need to wait ideally until its sold to an external DCA.

TheAnt_2

Yeah, I'm aware of Mercer's - my partner had issues with them. They stopped hassling the moment she barred them from contacting her though, and now she's repaying through her own DMP.

So the likelihood if I decide to stop paying is that Mercer's/BC will sell it externally after so many months though?

TheAnt_2

Also, do I notify BC of my intent not to pay, or just stop paying?

sourcrates

Cant put an exact timeline on it, usually takes a few months.


You could write and tell them, its up to you really.
They may "reconsider there position" with regard to interest if you do.