Black Horse - Urgent advice needed

connbrend

Hi, I'm new to MSE, and wondered if I post my situation here, whether anyone can advise on the situation I find myself in - I will be very grateful for any advice, I've been unable to get anywhere with Black Horse, and prior to formalising my complaint to them in writing, with a view to going to the Ombudsman, but I need to know if I have a case, or if what they are doing is correct.

Here goes - On the 26/08/2005 I borrowed from Black Horse to consolidate other debts. The total amount I borrowed to achieve this consolidation was £21,057.11 - This loan was taken on a secured basis, with my property, at that time under mortgage, as security, and black horse, quite rightly, took a second charge on the property.

In 2010, due to ill health, I became unable to work and seen a drastic reduction in income, and I had my monthly payments with Black horse reduced from almost £400 per month to £200. This continued until 2013, when I became unable to even pay that amount, as by that time my savings had dwindled because I had to use them to support a low income. Payments were further reduced at this time to £61 per month. On the 9th December 2013, after much to-ing and fro-ing with Black Horse, they contacted me to inform me that they had taken a business decision to write the loan off, and would no longer be pursuing the balance, calculated at £4542.39.

It is important to note here, that between 2005 and 2013, some 8 years, I have paid them a total amount of £29,253.58 which I would assume should be an adequate amount of interest (£8196.47), meaning they have profited over £1000 for each year of the finance provided. Since they had written the balance off, I assumed that they had done so on the basis of this. I should also note, that this balance is made up of punitive charges levied on the account for every month I was paying them at a reduced rate - the borrowing, and agreed interest is repaid, leaving only these accumulated charges.

In November 2014, after 25 years, my mortgage was finally paid off, and Nationwide contacted me to say that while the mortgage was satisfied, there was a second charge on the property, from Black Horse, and that I should contact them and ask them to write to Nationwide confirming that they no longer had an interest in the property, otherwise my title deeds would need to go to them, rather than to me.

Assuming Black Horse just hadn't got round to removing this charge on the property with the Land Registry, I contacted them requesting that they do so, and asking them to send the necessary letter to Nationwide. After many phone calls, they finally told me yesterday that the writing off of the loan, and the decision not to pursue me was purely an internal one, that this balance remains, and if I want the title deeds to my home, then I had to pay this.

I am at my wits end here - for 25 years, and even latterly through bad health, I paid my mortgage religiously, in order that I have my security for later life, which is fast approaching. Now I find that, because I have not paid Black Horse's additional charges for allowing lower payments, they are going to retain the deeds to the property until such time it is eventually sold, which will be after I die, meaning that when I pass the property on to my children, I will also be passing a debt on to them. I am unable to afford the money they are asking for, and even with a monthly arrangement, the amount I can afford to pay would be so low that I would be dead before it was even half paid. This is particularly upsetting because, clearly, the outstanding amount is a tiny percentage of the properties value.

So, after all that, and congratulations if you got this far, my question, simply, is, can they do this, or am I likely to be successful with a complaint if I go to the Ombudsman?

Thank you very much in advance of any response. Any help will be very gratefully received.

Gaz83

You can certainly try to raise a complaint. I presume you've kept the (written) correspondence from Black Horse confirming that they are "writing off the loan" and won't be pursuing the balance?

A few issues:

1) Did they definitely say they were "writing off the loan"? It could be the case that they just didn't think it worthwhile pursuing it while you had limited income, given that they had a charge on the property. It's very rare for a lender to write off a secured loan, as they can get their money back through the charge on the property.

2) It's not for you to decide what amount of interest, or charges, are "adequate" or not - it's for the lender to decide, and you to agree on, when you take the loan out.

3) You won't be passing debt onto your children - unless the value of the loan is greater than the value of the property - which you yourself acknowledge isn't the case. You might be passing less of an asset on - but that's not the same as passing a debt on.

connbrend

Thank you Gaz83 - I appreciate you taking the time to reply. I will answer your points, and provide some more figures which make fairly compelling reading.

They definitely told me, and confirmed in writing, in response to a complaint I made, that they had "Taken a business decision to write this loan off" - Black horse were aware I had to give up working and close my business after requiring double knee replacement, double hip replacement and having a cardio diverter valve fitted following a massive heart attack.

I completely agree that it's not for me to decide what interest and charges are adequate, and yes, I did agree to these when I signed for the loan. You are absolutely correct. Also, I wrongly worded saying I was leaving a debt, as opposed to less of an asset - I stand corrected, and apologies for confusing an already complex issue. However, here are some figures that I wonder if you, or anyone else can fathom these, because I'm having considerable trouble doing so.

So, from a loan, at inception, of 21057.11, against total payment credits to the account of £29,253.58, going through the statements there are total interest and collection based charges accumulating to £8519.43 - £2805.31 of this was added AFTER black horse agreed to stop adding interest due to my circumstances, and agreed to reduced payments to clear the capital balance. It seems to me that there is as difference of
-£322.96, yet BH maintain that I still owe them £4542.39 - and this in spite of apparently writing the loan off - they will not provide any explanation for the disparity in the figures, however, I have gone through it all one more time with them on the phone this morning, to give them one last chance to offer an explanation which satisfies me that I owe this money. I will be more than happy to pay them the £322.96 that I have calculated is outstanding, but unless they can provide an explanation to why there is such a large difference between my calculations and theirs, then I don't honestly see how they can do this.

Any thoughts?

Tixy

Do you still have the letter stating that the loan was to be written off?

Do you still have a letter from them agreeing to freeze interest charges? Do your statements show a period where interest wasn't being charged?

When did you last receive a statement from them?

Have you asked them to send you a breakdown of the balance owed and a full statement of the account?
I would stop trying to deal with them through phonecalls and ask them for it all in writing, which if you do decide to make a complaint to the FO will assist you.

connbrend

Tixy wrote: »

Do you still have the letter stating that the loan was to be written off?

Do you still have a letter from them agreeing to freeze interest charges? Do your statements show a period where interest wasn't being charged?

When did you last receive a statement from them?

Have you asked them to send you a breakdown of the balance owed and a full statement of the account?
I would stop trying to deal with them through phonecalls and ask them for it all in writing, which if you do decide to make a complaint to the FO will assist you.

Hi Tixy, yes I still have the write off letter, but no letter confirming the interest freeze. They have provided a full statement of the account from inception to write off, and it is from this that I have calculated the figures above.

During the periods of reduced payments, and the interest supposedly being frozen, it wasn't until I looked closely at this statement and began calculating, that the interest had, in fact, never been frozen.

I am waiting on a fairly helpful lady calling me back at 14.30, after she calculates the figures independently and speaks to her manager about the situation, to attempt some sort of explanation. I will request that she puts her explanation in writing to me, and if she doesn't propose a reasonable solution, then it is my intention to put a full, detailed complaint in writing to them, and then to the Ombudsman if a reasonable solution is not forthcoming.

I am not a difficult person to deal with, and have been nothing but polite and frank in all my dealings with BH - I have kept them upto date at all times on my situation, and continually provided evidence that my mortgage account was upto date, as well as bank statements etc showing my reduced circumstances. Despite continually telling me they have sympathy with my situation, and were excercising their duty of care, the continued to add interest and charges when they knew my condition and income, despite telling me that they weren't.

I do hope that helps somewhat. Thank you once again for taking the time to reply.

stator

Write a formal letter of complaint. If you're not happy appeal to the ombudsmen

Tixy

So on the statement to the point of write off - based on the 3 figures you have given that presumably show a balance of the £322.96 outstanding?

But they are now claiming a balance of £4542.39?

In which case presumably what you need is a statement from the date of supposed write off to now.

connbrend

Tixy wrote: »

So on the statement to the point of write off - based on the 3 figures you have given that presumably show a balance of the £322.96 outstanding?

But they are now claiming a balance of £4542.39?

In which case presumably what you need is a statement from the date of supposed write off to now.

Yes Tixy - when you go through the statement, and add the figures up yourself, it comes out to a balance outstanding of -£322.96 yet, in spite of that, BH show a balance of -£4542.39. How they have arrived at this is a complete mystery. I don't see how they can dispute their own figures, or my dilligent, time consuming calculations, which are entirely accurate, and have been provided in raw form by them. When you consider that they stated clearly that no interest or charges would be added after 2010, yet this document clearly shows that £2805,31 has been added AFTER that date, I'm concerned that I may have arrived at the point of having a credit balance, rather than a debit balance, but I will need to formalise thios complaint in detail, as stator says, to get a full and final response from them which will either resolve or deadlock the matter.

Gaz83

It's possible that someone at Black Horse has just made a genuine mistake.

Write to them, enclosing a copy of the letter they sent to you confirming that they have written off the loan, headed 'complaints', and asking for further confirmation that they will not be pursuing you for any further amounts.

If this doesn't work, get in touch with the Ombudsman.

EDIT: I wouldn't bother with providing them with figures just yet. They have confirmed in writing that the loan was written off - you just want them to honour that.

connbrend

Gaz83 wrote: »

It's possible that someone at Black Horse has just made a genuine mistake.

Write to them, enclosing a copy of the letter they sent to you confirming that they have written off the loan, headed 'complaints', and asking for further confirmation that they will not be pursuing you for any further amounts.

If this doesn't work, get in touch with the Ombudsman.

EDIT: I wouldn't bother with providing them with figures just yet. They have confirmed in writing that the loan was written off - you just want them to honour that.

Yes, that sounds like good, solid advice, and I will do just that - after all, how can they not honour their own letters. In all honesty, I think this letter is probably the most important document for the FOS if I need to go down that route - As you say, someone at BH could have made a genuine mistake, however in all my dealings with them, not one single employee there has been prepared to look at that possibility as a reasonable one - the mind boggles.

Hanky_Panky

Mmmm...

I have stated on here many times that writing off a debt for a bank is just an accounting exercise. The term 'write off' is an abbreviation for 'writing off to bad debt'. It just means that the bank no longer expects to make any more money off it so they 'write it off to bad debt' and can then offset any profit against that tax loss. Any money recovered against that loss is then profit which would be subject to tax again.

The issue here is that most people working in banks let alone the layperson misuse the term so for your average Joe it means the debt no longer exists which it does. This may not be good news for the OP.

The other issue about the balance looks far more promising though so good luck.