First Direct personal Loan Interest refund, dont understand, advice please

happyhero

Hi I have just received a letter from First Direct who is the bank I use for everything, it says:-

Important information about your Personal Loan

We recently reviewed our Personal Loan annual statement and found it didn't include important information reminding you about your right to make partial prepayments of you loan at any time. We're sorry we made the mistake.

What happen next?

We've enclosed revised versions of any incorrect statements we sent you and we'll automatically refund £1,132.28 to account ending XXXX on 29 December 2014. This refund covers all the interest you were charged from the date we needed to start sending you statements to the day we expect you to receive the revised one(s) allowing for postage times. From then on we will charge you interest as normal.

I would love to think this money is mine it would solve some problems for us but this letter is not clear enough, is this a refund of interest to keep thus effectively reducing the interest rate from what we first took out (11.9%) or is it just a refund that we will have to pay back in the end ie are they saying we should have had a choice over payments and so are entitled to pay this back at a later date ........ yes I know I am not being very clear myself but can someone explain what this is. I am confident it is genuine from FD as it has so much of my information in it, and you get to be able to tell when something is genuine these days.

The original loan was taken out on 16/04/2011, we took out a 73 month (just over 6 years) loan of £5500 and the interest was immediately added making the loan £7605.07, this was an interest rate of 11.9%.

So can anybody explain this money to me please and why they are giving it to me and whether it is mine to keep or some weird alteration to payment please?

I am not in a hurry to phone the bank because I want to understand what this is first, before I go off to them and they say oh no you shouldn't have been given that or something similar.

Any help/info would be appreciated.

stator

Basically they didn't follow the rules about loaning people money. They are supposed to send you a statement every year that says certain things on it. They didn't put the right text on your statement, so the law says they have to give you back the interest.
It doesn't affect the rest of your loan, keep paying it. They will have corrected their statements so they can start charging interest again.
It's yours to keep, they won't want it back. Enjoy

Scotty_Ash

My wife received the exact same letter today but for just under £2k. What a nice Christmas bonus. Have to enjoy the luck as it can turn very quickly. :beer:

roubaix

Would anyone know if this applies to loans that are already settled?

I had a fd loan which I paid off early and wouldn't have received any of the statements and just wondered if I should expect correspondence about it or whether it just applied to people who still have a loan?

Thanks

stator

roubaix wrote: »

Would anyone know if this applies to loans that are already settled?

I had a fd loan which I paid off early and wouldn't have received any of the statements and just wondered if I should expect correspondence about it or whether it just applied to people who still have a loan?

Thanks

It might, it depends on the dates of the loan. If it was repaid before 2008 then no. If you have statements after that date (or no statements when the loan was active) then you should check them.

jmcdyre

Just received a letter myself today, my scam detectors were going off but it appears legit. £500 nice little treat for xmas!!!

roubaix

Thanks stator, it was post 2008 and the statements don't mention partial payments. Feel a bit of a cheat though contacting them as even if they never told me I still knew about the option of partial payments from coming on here and indeed as I said paid it early.