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Natwest adding interest on a DMP.

Hi,

I dont know if anyone can give me some help or advice...

Basically three years ago I entered into a DMP with PayPlan at the end of 2011. I had 5 creditors, three of them being Natwest/RBS. I owed just over £5.5k in total to begin with.

I have recently been given a lump sum of money by a family member to pay of what I thought I had outstanding. So I contacted Payplan to try and settle my accounts.

I owed Natwest £1400 and £1700 on overdrafts and a natwest credit card for £450. Today i have been told by my settlements officer that i owe £308 on the credit card (this I knew as they send me statements). One overdraft I owe £1396 (although I have already paid Natwest £550) and £1619 (I have paid them £700).

So I rang Payplan up to query this to be told that once a year Natwest do a review and wack a whole load of interest on my outstanding debt. Where do I stand if 1) I was under the impression they had frozen charges/interest, and 2) I havent had a statement from them in 3 years to say they're adding interest or at what percentage?? Is this even legal?

my original debt was £2100 on overdrafts but if i was to pay all off today (which I cant do as the money I was given doesn't stretch that far) I would end up paying them £4265! That's £2165 OVER what I originally owed them!

Please help someone!

Thanks In Advance!

Comments

  • Creditors are not obliged to stop charging interest. Do you have anything in writing to say they agreed to? Do pay plan?

    Do pay plan get statements?

    You could complain, in writing, about the interest.

    Also, they should send you statements, at least once a year (check the frequency) but clearly none for years is not good.

    Add that to your complaint also.

    You could offer to settle for less than the full amount as a full and final settlement.
    :beer:
  • Hi Eldot. I started my DMP about 8 years ago now and I'm sorry to say that Natwest have been the biggest pain in the !!! throughout the whole thing. I was in a very similar situation to you. I had a Natwest Credit Card and 2 overdrafts (one on my account and one on our joint account). For the first few years of being in our DMP our Natwest totals continued going UP!! They carried on charging us more interest than we were paying off each month. It was very stressful but no matter how many times I tried to talk to somebody at Natwest and negotiate they just didn't want to know. We eventually got defaults that stopped extra charges - thank god!! But it is hideous when i look back at how much we have paid them compared to what the original debt was. I
    Just as an example, our biggest debt when we started was a loan with Egg for £8k. They immediately agreed to the terms of the DMP and stopped charging us any interest etc. That debt is now paid off. However, we are STILL paying off the 3 Natwest debts that were only around £2k each.

    Needless to say that I will never EVER go near Natwest again. They have been extremely unhelpful and caused us a lot of stress, not to mention the amount of money they have had from us.

    Sorry to be so negative but thought I should let you know my story. Fingers crossed you manage to get it sorted better than I did. Good luck!
    I'm FINALLY debt free! DFW Long Hauler #227
    LBM - Jan 2006 :idea: March 2006 -£26,725 :eek: Apr 2015 - £0!!! :j
    Baby boy born 1/8/08 Baby girl born 28/6/12
  • Iwanttobefree
    Iwanttobefree Posts: 2,534 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    edited 6 September 2014 am30 9:50AM
    This is a big problem I think.

    Payplan happily told me that the estimated completion of my plan was xxx. They quickly mention creditors aren't obliged to freeze interest, but don't seem to want to help at all if they don't.

    More frustrating is they don't seem to monitor this either.

    Sure ultimately it's our responsibility, but most of us contact DMP companies/charities when we are at our wits end, not able to cope, not wanting to open letters and are on the verge of breaking down.

    Having taken out a DMP in January paid £466 a month since February, getting to August and owing slightly more than I owed in February. still having to deal with numerous problems with various creditors every month, I personally think something needs changing somewhere.

    I am a very together person (although useless with money) I don't let companies walk over me, I don't get frightened by threatening letters and would happily stand in court and argue my case, and I'm totally stressed out by my DMP experience.

    I really really really don't know how those poor souls amongst us that are on the verge of a breakdown or feeling suicidal due to their debts are coping on DMPs as so far, my experience has been horrendous.

    Hopefully now I'm with Stepchange, I can report better things in a few months.

    However, reading this thread worries me. I have a £500 OD with Natwest that I am in every month. I have to open a basic bank account and add the OD to my plan. I can see the logic in this, but if it means that £500 is going to creep up due to interest, I would be far financially better off keeping my account that I've had for years, and simply keep using the OD which costs me next to nothing to use.

    My other concern with DMPs is how they treat debt to relatives. We have borrowed £2k off of a very close relative who hasn't really got it spare, defiantly needs it repaying within the year, but we are now down to pay it at £11 a month.

    Personally I think there's a huge difference between a relative helping us pay the mortgage and a debt to a company that happily tries to get us to take out more and more credit.
    The way things are going, soon we are all going to be victims of something or other.

    Who will we blame then?
  • fatbelly
    fatbelly Posts: 22,186 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    OP - I would advise you to thank the 'settlements officer' for his help and then do this yourself with help from people on here and the National Debtline factsheets. That's particularly true if (as your post infers) that he isn't trying to get you a full & final settlement at a reduced percentage but just suggesting that you should pay any figure Nat West come up with.

    Ignoring whether I think you have had good treatment from Payplan and have been treated fairly by Natwest, what matters now is what figures NatWest will settle for.

    For example if they increase your debt from 3k to 4k but settle at 1.5k, that is a better outcome than if they froze interest at 3k but would only accept a settlement deal at 3k.
  • sourcrates
    sourcrates Posts: 30,656 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    OP, I'm sorry to hear about the problems with NatWest, although they are not obligated to freeze interest, you would think it would be the sensible option, however that just goes to re-enforce my belief that banks are there to make money, full stop.


    Where creditors like NatWest are involved, I think sometimes its best to let a debt default, and be sold on before entering a DMP, that way you know there will be no more interest added.


    DMP providers can be helpful to you at the outset of debt problems, but as you progress, and become a little more savvy, I would prefer to be more in control of my own finances, that's why I would never entrust full and final settlement offers to anyone but myself.
    I would contact each creditor to see what they would settle for, keep payplan out of the loop for now.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • I agree with fatbelly that eldot should be offering Full & Final settlements.

    For other people who are struggling with a DMP where interest isn't frozen, it's worth challenging the creditors over this. Of course you think your DMP company should do this, but better you do it than it doesn't get done!

    There is a lot to be said for people running their own DMPs. It puts you in control. You know which creditors have and haven't frozen interest. You can make F&F offers etc.

    There are letters for doing this on the National Debtline site, see the Negotiating With Creditors section here https://www.nationaldebtline.org/EW/sampleletters/sole-letters/Pages/default.aspx

    Or Citizens Advice have a CABmoney service that will generate the letters for you and help you track progress: https://nedcab.cabmoney.org.uk/dmp.asp. It says "N E Derbyshire" but it can be used by anyone in Britain.
  • Sazzie23
    Sazzie23 Posts: 2,634 Forumite
    Ninth Anniversary 1,000 Posts Combo Breaker Post of the Month
    And just to reinforce other posts

    Stepchange or payplan will manage your repayments and contact creditors for you, but the debts are yours and DMPers need to monitor each creditor to check balances and update accordingly.

    You can fight interest direct with yr creditor, not always successful but worth a try and complain to FoS if they don't play ball.

    All DMPers should be encouraged to read the DMP mutual support thread before they start and regularly to see how to get the best from a DMP.
    I can't praise it and the MSE forums enough.
    Debt -it's a fight that I'm winning, dealing with debt one day at a time.
    Estimated DFD August 2018 - 2031 - now 2027 :T

    Guide dog Tess, missing Scotland 2 years

    DMP support no438.
  • Sazzie23
    Sazzie23 Posts: 2,634 Forumite
    Ninth Anniversary 1,000 Posts Combo Breaker Post of the Month
    Oh and by the way for your F&f start your offers at 20%
    Many successes reported at around 25%.
    Debt -it's a fight that I'm winning, dealing with debt one day at a time.
    Estimated DFD August 2018 - 2031 - now 2027 :T

    Guide dog Tess, missing Scotland 2 years

    DMP support no438.
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