BlackHorse refunding all interest on loan

Welshy81

Hi all,

I'm looking for a bit of help and advice. Yesterday I received a letter from Blackhorse finance about a loan I took out with them back in 2008 to help purchase a new car. The loan was over a 3 year period and the outstanding lump sum (as it was a pcp) was paid off in full at the end of the agreement. The letter states that they have carried out a review of my account and noted that they made an error. When I signed up for the agreement they neglected to inform me that I was free to terminate the contract voluntarily before its completion.

As a result they are not entitled to retain the interest I paid on the loan and therefore have to refund it in full from the date of the error, which happens to be the start of the loan. They have informed me that a cheque for the ineterest will be sent out in the next 7-10 days for the amount of £1800.

Whilst this is totally out of the blue and welcome news for me, its also got me thinking. If they are admitting to such an error when selling me their product, could this be classed as mis-selling me the loan in the first place? Would this entitle me to claim back not only the interest but also the amount I initially borrowed as I was not aware that I could have terminated the contract at any time and may not have even taken the loan out in the first place?

Don't get me wrong i'm not being greedy or anything but I'm a little bit suspicious about whether or not if I were entitled to claim back the full amount they would openly tell me or would they just try and fob me off in the first instance with a cheque just for the interest because the content of the letter is clearly stating to cash the cheque upon receipt ASAP, possibly negating any future claims as the matter would then be settled.

Hopefully this error on their part will benefit many others as well.

thanks in advance for any help/advice

david39

I can't throw any light on your situation but I had a similar experience earlier this year with Lloyds Bank itself.
A few years ago, I was sold a protection policy over the phone that guaranteed me against misuse of my card details and also against identity theft.
Having read that similar policies sold by other banks had been challenged on the grounds of mis-selling and premiums repaid, I wrote to Lloyds Bank and complained that the cover provided by this policy was already granted to me under the T&Cs of the various accounts I already had with them. I also pointed out that the person conducting the sale would have been aware that I was already covered



Within a few days, Lloyds wrote to me to say that they disagreed with my reasoning but, upon investigation, could not find any such policy with me on their records. They were therefore returning to me all the premiums paid, plus interest, plus £50 ex gratia payment for inconvenience.



Although I accepted it, I did think afterwards that there must be more to this than meets the eye for them to have caved in so easily and to make an extra payment that I had not asked for. Their excuse of having lost the policy details did not ring true - they had taken the premiums every month for a year until I stopped them.

Welshy81

Thanks for the reply. I'm thinking exactly the same as you in that they seem very keen to 'resolve' the issue very quickly and get that cheque cashed promptly which to my thinking concludes the matter with little or no come backs from me if it transpired that I was able to claim the full amount back.

The initial loan amount was for £12,000 so compared to this £1800 is significantly less, hence why they may be keen to get it done and dusted. My main arguement would perhaps be that the agreement was mis sold in the first place to which they are pretty much admitting in their letter but would this entitle me to claim back the £12,000 loan amount?

nidO

Welshy81 wrote: »

but would this entitle me to claim back the £12,000 loan amount?

There is no way that this plays out where that will happen, my advice would be not to waste your time in trying, cash your cheque, and be happy that you got £1800 out of nowhere for effectively no reason.

thebritishbloke

No. You still chose to purchase the car and to finance the £12,000. You're now no worse off than if you bought it in cash.

greatone

Welshy81 wrote: »

Thanks for the reply. I'm thinking exactly the same as you in that they seem very keen to 'resolve' the issue very quickly and get that cheque cashed promptly which to my thinking concludes the matter with little or no come backs from me if it transpired that I was able to claim the full amount back.

The initial loan amount was for £12,000 so compared to this £1800 is significantly less, hence why they may be keen to get it done and dusted. My main arguement would perhaps be that the agreement was mis sold in the first place to which they are pretty much admitting in their letter but would this entitle me to claim back the £12,000 loan amount?

Hi unfortunately what you are saying doesn't make sense. If this product was missold, why would the lender lose the capital (12k) that they have lent to you?
This would be like saying missold mortgage = free house

In the PPI cases I understand that the banks have only refunded the the premiums paid and interests. Any amounts owed on the loan would still be owed.

esmerellda

The refund is not because anything was mis-sold, it is because they failed to use some specific wording in your annual statements, the result of not doing is that they lost the right to the interest since they made the error.



There's some more of these cases over http://www.legalbeagles.info/forums/showthread.php?57234-Blackhorse-Motor-Finance

david39

nid0 and the britishbloke are correct - the bank have put you back into the position you would have been had they not charged interest.


However, their speed in doing so without being prompted suggests that there are other reasons.


In my case, with the identity-theft protection policy, it was clearly to pay out a relatively small amount rather than have me escalate the claim to ombudsman level with the resultant wave of claimants resulting from publicity from that. They must have sold thousands of these policies but I have not seen any reports of a mass of claims against Lloyds who used a different underwriter to the other banks who have paid out thousands.

Welshy81

Thanks for the advice guys, don't get me wrong I'm not being greedy and trying to garb grab grab! But I would be a little bit annoyed if I accepted the offer only to later find out I could have on some technical term had the whole lot back, call me cynical but after all the negative press over the past few years I just don't trust banks!

The £1800 is certainly welcome as it's pretty much paid for my airfare to go see relatives down under!

Gentoo365

No, of course not.

The reason the interest is being refunded is that had you known of your right to repay the loan early you may have decided to repay, and hence reduce the interest payable.

You would always have had to repay the capital amount, so this is still payable.

Basically they have decided to pay you the maximum you would get if you claimed misselling (or something) such that there is no point in you doing so, and nobody has to waste any time or money on solicitors and court fees.

You are lucky, smile and spend the money on something nice for christmas and toast the members of staff at the bank that made a clerical error that made no difference to your life but makes you slightly richer.

Gentoo365

david39 wrote: »

However, their speed in doing so without being prompted suggests that there are other reasons.

I would imagine the reason is that if they did not do so then in addition to paying the interest to the customers they would also have to pay legal fees to solicitors as well as deal with the admin and ombudsman complaint costs of multiple speculative applications for refunds by people that did not even take out loans.


...better to just take the hit now rather than drag it on like PPI etc.