Can Cooperative Bank do this?!

Ferrety_2

I repaid a personal loan early, in full, in January with Cooperative.

The Ts and Cs doc and loan agreement I had with the loan are vague at best, but under their own FAQ on the website it says:

"You have the right to repay all or part of the loan at any time. If you repay in full 28 days interest calculated on the balance outstanding will be payable. If you choose to repay part of the loan and there is less than 12 months remaining on your loan term, 28 days interest will be payable. If there is more than 12 months remaining on your loan term, 58 days interest will be payable. This is in-line with the Consumer Credit Act 1974 regulation"

It was very clear that my repayment amount included 2 months interest, not one, so after Cooperative failed to be able to work this out for me, I made a complaint.

A month later, they've come back to me saying that the redemption figure was valid for a month, so they charged 28 days notice until this expired, plus another 28 days afterwards.

Bear in mind, I called up, asked for a redemption figure and repaid during the same phone call - surely they have to count the 28 days interest penalty from the day I repaid, not 28 days after that?!

On the final loan statement, it's all just lumped in together under a section marked 'interest' - no separate section for charges, making it very difficult to calculate.

I'm fuming and planning to take it to the Ombudsman, but just wanted to get opinions on whether this is even legal!

Ferrety_2

I requested the figures for how this entirely arbitrary lump labelled 'interest' was calculated on my early repaid loan (which was clearly 120-odd quid higher than the actual interest owed). They've just left me a message saying they don't know how to calculate it as it's too complicated!!!

What?! Why are they giving loans if they can't do their sums...

Nearlyold

Depending on when you had made your last regular payment did you allow for the interest that would have accrued from that point up until the date you settled in full in addition to the 28 days penalty interest.


I might be teaching granny to suck eggs but did you also allow for the fact that interest is not spread evenly throughout the term of the loan.


All the calculations are completed by computer so not surprised front line staff can't explain it.


Actual figures in your post might help

Ferrety_2

Yes, I accounted for all of that - down to the nearest pound I can see an extra month's I interest has been charged.

I understand it's all done by computer and I'm not arguing the computer has got it wrong, but I believe they've applied the wrong calculation and treated it as partial repayment instead of full.

I'm just gobsmacked they can put a penalty charge on a statement, label it 'interest' and refuse to explain how it's broken down!

Ferrety_2

I posted all the previous figures here when I puzzling over what they'd actually charged me for...

https://forums.moneysavingexpert.com/discussion/5175642