Conned with a variable rate loan!

David301

I used to work for MFI back in the day and they used to get people like this all the time with the "no payments for 12 months" style finance offers. In the tiny tiny illegible print it stated that if the balance is paid within the 12 months there would be no interest payable but if it was after the 12 months interest would be charged at XYZ% for the 12 months. Would quite often have people complaining that they paid it before the deadline but the funds hadnt cleared until after the deadline so they had to pay a years worth of interest, quite often at a very high %APR

Say they bought a £10,000 kitchen if they paid it off before 12 months it would pay £10,000. A day too late the same kitchen at 29.9%APR cost them £11692.55

If they then carried on with the credit terms the interest would then start on the £11692.55 and the £10,000 kitchen would eventually cost £36,884 if spread over 10 years

TrickyDicky101

David301 wrote: »

I used to work for MFI back in the day and they used to get people like this all the time with the "no payments for 12 months" style finance offers. In the tiny tiny illegible print it stated that if the balance is paid within the 12 months there would be no interest payable but if it was after the 12 months interest would be charged at XYZ% for the 12 months. Would quite often have people complaining that they paid it before the deadline but the funds hadnt cleared until after the deadline so they had to pay a years worth of interest, quite often at a very high %APR

Say they bought a £10,000 kitchen if they paid it off before 12 months it would pay £10,000. A day too late the same kitchen at 29.9%APR cost them £11692.55

If they then carried on with the credit terms the interest would then start on the £11692.55 and the £10,000 kitchen would eventually cost £36,884 if spread over 10 years

Not strictly the same, but when I bought my car I got 2 years interest free finance (this was through a 'reputable' outfit fronting Land Rover finance). The same thing as you mention applied if the payment was a day late - you got charged interest over the entire first 48 months.

When I called up in the final month to pay off the balance I felt they went out of their way to make it difficult to actually pay off the loan - couldn't use debit card or credit card (not surprised about the CC) and only a direct bank transfer was offered. They refused to put their actual bank sort code/account code in writing though (snail mail or email) and it wasn't available from their website at the time. They were only prepared to read it out over the phone! Fortunately, the details given turned out to be accurate and the loan was repaid within the deadline.

poppasmurf_bewdley

magik_thighs wrote: »

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.

I disagree. I am sure that everything is down in writing in the contract. The problem has arisen because (a) the OP didn't read the contract he signed, and (b) the OP didn't understand the conditions of the contract he didn't read but signed.

Cornucopia

magik_thighs wrote: »

Nothing really we can do except take it on the chin.

There is something you can do, which is to make them an offer for settlement based on what you have paid so far.

In order to do that, you'd need to crank the figures through a spreadsheet to understand-

1) Whether the company's settlement figure is correct?

2) Whether the basis of their figure is fair?

3) Whether there might be an alternative figure you would want to offer them based on a different, fairer interpretation of the agreement?

At the end of the day, if you offer them what you think is fair and they say no, you have lost nothing. You can determine how strongly you want to make your representations to them on the basis of how confident you are in your interpretation.

Assuming your account is up to date, and previous penalties applied to the account are not significant, then you should have around 3 years to run, which at £140 per month is £5040. I would start with this figure in mind.