Loan Company Miscalculation of Interest

kyrast75

Please Help,
My husband and I took out a loan in 2005 with what was at the time London Mortgage loans, it has since changed hands 3 times. My husband was in and accident in 2007 and his injuries left him disabled and unable to work. We fell into arrears, but cleared them with his payout in 2009. Last year we were informed that they had miscalculated the interest and that we were to up our payments by £50 + a month or pay an extra £5000 at the end of the loan of which we now have just 5 years left. We wrote to them and asked them for a breakdown of the calculation etc and have been ignored. We went to the Financial Ombudsmen who have said its all above board. I have since received a statement and it is showing that I am now only paying £20 a month off the balance and the rest is interest. I pay £194.22 a month. Can they do this as I never agreed to any new terms and conditions or change of rates ? Also when we contacted them by phone about this the first time they said that it was interest accrued during the time that we had fallen behind, but we paid off all the arrears and interest associated with it as far as we knew as when we knew we could pay it we asked for the total amount of arrears inc any interest that had occurred so that we didnt run into any further problems. We have written to them since and heard nothing, what can we do (we have kept a copy of all correspondence sent which was all sent recorded signed for etc). Any help would be much appreciated. I feel like we are being fleeced.

Foxy-Stoat_3

If the Finanical Ombudsmen have found that everything is ok, then you could appeal. You would need sufficient grounds to appeal though.

You could put your loan history on a spreadsheet and calculate the interest you should of paid IF you make every payment on time, and calculate what would happen if you miss 24 months payments, I think they would make charges every month and charge you interest on the charges as well as interest on the missed capital repayments and maybe even interest charges on the missed interest payments as well. Eye watering!

There will be small print that allows the lender to sell the loan to other companies, but they cannot alter the contract, but the fact that you fell into arrears and you THOUGHT that you were back on track may be your mistakes.

Without knowing the terms of your loan, noone will be able to help you, £20 off the balance against a payment of £194 would suggest that this is a very high interest loan.

kyrast75

Hu thanks for the reply,

When we repaid the arrears it was in a lump sum and we were told that all of the interest accrued on the arrears had also been included (this was in 2009), The interest is 14.3 % on what was a £15,000 loan that by the time fees were added (which we didnt know about until asked to sign the papers), came to £19,000. I dont think that we can appeal as it has been almost a year since we were informed and this is the first statement that I have had as they only send them yearly. As I said they then told us that it was because of a miscalculation of the interest, but I cant see how it has taken them 9 years to discover. I shall try and figure it out, but I dont know how they apply the interest as to whether it is daily or monthly. :mad:

Cornucopia

Why not ask them for a Settlement Figure now, and pay it off, or transfer it somewhere else. If you feel that there is some vagueness in the arrangement, that would be good grounds on which to make them a "full and final" offer that is not the entire outstanding amount. They can only say no.

Once your contract with them is done, they won't be able to mess you around any more.

You mention "change of rates". What kind of loan was it? Most personal loans would be fixed rate, so that could be an issue. Do you have the original loan paperwork? It would be worth checking what is specified there about rates and also about early settlement.

Foxy-Stoat_3

Some secured loans are variable rate and most allow them to sell the debt on to other companies, its all in the terms and conditions that you agreed to.

kyrast75

Hi Cornicopia, The loan is not for £6000, thats the additional amount that they want. The loan itself still has £17,000 left on it there abouts so paying it off isnt an option and neither is transferring as neither myself or my husband work as he is disabled and I am his carer. I cant even remortgage my house and have it added to the mortgage to get the rate down as I get help with interest payments via the governmment for my house.
The change of Interest rate wasnt intentional it was a mistake on their part as they started charging a lower amount when they were taken over, by SPML, so far it has changed hands 3 times, the original lender was London Mortgage Loans, then Capstone, then SPML and now its Acenden. They are now claiming that they cant see anything on our files past 2010 when they took it over..ggrr The loan rate is 14.3 % but someone messed up and started charging us at 13%, we didnt even know as on the statements the amounts going to interest and balance hadnt really changed much from what I can see, probably about a tenner, so where they get £5975 from I dont know. Hubby spoke to them yesterday and they say it may take up to 2 months to go back through all the records to try and sort it out. He also spoke to someone the day before that who admitted that it was a mistake on their part (although yesterdays caller kept saying alleged mistake), and even indicated that we were imagining it and that there had been no change in the interest rate and that there was no shortfall, and this was from the company that sent us the letter themselves to say that there was a shortfall, so one hand doesnt know what the other hand is doing in this place. Its so frustrating.

Cornucopia

Frustrating though it may be, it looks like the only option is to wait for them to come up with their solution. Even then, if it still seems unfair, you can still argue with them.

If it's causing you difficulty, it's possible to make them some kind of reduced payment offer, but I'm not sure what the ground rules are for secured loans.

kyrast75

Hi Cornucopia, I am not having any difficulty paying, I think your missing what I am getting at, I can easily afford to pay the extra its the principle. Its the fact that they think they can make the mistakes and then make everyone else pay for them.

[Deleted User]

It doesn't seem that they're making you pay for the mistake. Just for the under payments.

I don't think they're charging any additional costs for the mistake.

kyrast75

Hi ZX81,


If thats the case then I dont understand how they came up with the sum of nearly £6000 as it hasnt been for the entire loan only for the period that it was handed over to SPML before Acenden took it over, which was no more than 2 years. It was a difference of 1.3 %. They have now send us some statements and are they are not showing the additional to be paid. Its very confusing, they dont seem to know themselves whats going on as they have only sent statements from when they tood it over which was pointless as i have allof those, but have lost some of the earlier ones from when it was SPML. We have tried to get to speak to someone today but there is no-one available (again). I just want to know where I stand.

Tixy

I'd probably send them a subject access request (SAR) under the data protection act (with the £10 fee) and specifically ask for a full breakdown of all transactions on the account.

They have to provide all information under a SAR within 40days.