Conned with a variable rate loan!

magik_thighs

Hello forum.
I know we have been right royally shafted here and i`m sure there`s nothing we can do but pay these despicable people and who would say it was not our own fault, but if this thread helps someone avoid what we did then all well and good.

in 2008 My wife and I entered into a contract to buy a new kitchen from a company called Living Space. They used GE Money for the lending. We were unable to sign up for this as I had just Completed a harrowing 12 month chemotherapy treatment for Hep.C and my wife was at the time a student nurse at University and I was unable to work due to the horrible side effects of the treatment. I also have to say that if I were in normal health and not have a head full of brain fog the bloke would not have got over the doorstep. Unfortunately I was physically and mentally completely out of it.
We didn't want to take on any debt as the future looked bleak and it would have been about a year before I could go back to work. We were asked by the salesman that if they could defer the start of payments for a year and we agreed to let them use our kitchen as a show-kitchen and they could put their company sign in the garden would we be interested. So it was agreed and the forms were signed. Little did we notice at the time that the deferment period had been written on the credit agreement as 4 months. And there was never any "sign in the garden", that was just a con.

Total charges £9254.80.
Monthly repayment: £138.79
Number of monthly repayments 120

So....3 months later we get a letter from GE Money saying we had failed to make the 1st payment (or words to that effect). We contacted them and told them that we had been told the 1st payment was not for a year, we also read the small print and notice the 4 months deferment period and then explained we had been duped by Living Space and after a little toing and froing they agreed to the 1st payment being made at 12 months.

We are currently moving house to get our finances on an even keel and requested a settlement figure from GE Money. We have been paying sometimes up to £140.00 for 7 years which comes to around £12`000 and although we had a few late payments (no more than a few days) we never missed a payment. The settlement figure is £9`092.56 . Which is more than we borrowed in the first instance!

Looking at the account statements which i`ve never seen before as my wife Linda does the finances with me not really able to get my head around them....they have been charging more or less the amount we have paid in monthly interest charges.
What a nightmare!

ermine

Number of monthly repayments 120

Crikey. That's 10 years...

Okay, so you understood that you were deferred for 1 year and it so happened you weren't, but surely you were ready to pay the principal by the end of that year? The 6 years of ignoring the problem and paying the minimum was probably very expensive, and to be avoided Few money problem go away by themselves if ignored...

Tixy

What was the initial interest rate on the agreement? looking at those repayments and assuming 4 months holiday at the start then it looks to be around 17.5% or so.
Have you got details of any increases to the interest rate (either letters or on the statements).

The first 12 months with no payments but interest accruing will have significantly increased the initial debt. Presumably if the loan was in 2008 and had a year's holiday then you've been paying for arond 6years so far not 7? You say you have been paying 'up to £140', so did some months you pay less than this?

What interest rate are you being charged currently? Have you looked to see if you can refinance elsewhere at a cheaper rate?

Tixy

So originally you were expecting to repay a total of £16655 for the £7400 loan.

How much have you actually paid so far?

If as an estimate it was £140 every month and had been doing so for 6years so far that would be around £10080 plus a settlement of £9092 being a total of £19172.
So maybe around £2500 more which is in part due to the extra 8months borrowing at the start, possibly some fees for that first missed payment and then possibly the remainder due to an increase in the interest rate at some point.

magik_thighs

Thanks for the replies. We were not informed that we would be paying interest for that initial deferment period or we would not have taken it out.
Interest rate on the original loan agreement is "Annual rate of interest (variable) 17.88%
Total charges £9`329.00

magik_thighs

We weren`t ignoring a problem that we didn`t know existed. We just paid the agreed monthly amount.

And we have sold the house so i`ll be paying it off in full but just clutching at straws to see if there was something not correct about all the interest. It`s as if we`ve been leasing the damn kitchen for 7 years!

ViolaLass

Has the interest rate changed in that time?

Deferring payments means just that, not making payments. It doesn't imply no interest being charged.

magik_thighs

Not sure if the rate has changed, the wife always dealt with it. We were conned big style by living space, lead to believe the whole thing would start in one years time. Of course they no longer exist, ceased trading years ago. Nothing really we can do except take it on the chin. Thanks for the help anyway guys.

ViolaLass

Did either of you read the contract before signing it?

Clive_Woody

magik_thighs wrote: »

Not sure if the rate has changed, the wife always dealt with it. We were conned big style by living space, lead to believe the whole thing would start in one years time. Of course they no longer exist, ceased trading years ago. Nothing really we can do except take it on the chin. Thanks for the help anyway guys.

Not conned, this is your misunderstanding of deferred repayments. I think you are confusing this with an interest free period before repayments begin.

I am not sure that there are many companies who will just agree to put interest on hold for a year unless that offer is specifically mentioned.

magik_thighs

Clive_Woody wrote: »

Not conned, this is your misunderstanding of deferred repayments. I think you are confusing this with an interest free period before repayments begin.

I am not sure that there are many companies who will just agree to put interest on hold for a year unless that offer is specifically mentioned.

I agree. The problem is not with GE money, although they must have known something was not right. The problem is the kitchen company who deliberately misled us.