Headline rate 'scam' - M&S Loans

[Deleted User]

regency_man wrote: »

You mean exactly the kind of 'massaging' that Money Saving Expert encourage you to do with your Job Title to get the best deal on your Car Insurance?

No. I mean the kind of massaging you see on here when people ask 'what is a good reason to put down for the purpose of the loan?'

foxy-stoat

regency_man wrote: »

Where does that 'fact' come from and who is the industry regulator who checks that? If a lender has a set of criteria programmed into their computer, and in a year 1000 people apply 999 of whom don't meet that criteria, how could they possibly give it to 51% of applicants?

Your not one of these people who believe that a £399.99 laptop which is priced for £800 for 3 weeks of the year then advertised on the telly for a massive 50% off sale for £399.99......is a true 50% discounted deal ??

Its all advertising BS making folk apply for the loans in the first place, which is what you did, 6.3% isn't a bad rate really.

I really dont think M&S can legally or willingly publish all their customer applications and their offers to prove to the FSA or the average Joe that they have given 51% of the customers the headline rate.

ReadingTim

Suggest you read this, as you don't seem very familiar with how credit scoring and loan applications work in the UK financial system in 2016.

The guide also tells you how and to whom you could complain if you feel you've been wronged, but I suspect you'll be just as dissatisfied with their conclusion as you were with M&S's decision re. the loan....

burlington6

They don't want or need your business. That's up to them.

If you'd applied at a different time you may have got the lower rate.

Don't be proud of your credit score or quote it, it's useless.

They offer the lower rate to 51%of people, just not you.

BenjaminClarke

I applied for a Tesco Loan. £5000.00 to consolidate our credit card debts. I earn £20,000.00 per year and my partner earns £12,000.00 a year. It was a joint application. Rate being offered: 3.4%. We were told a decision would be made within minutes. Seven days later we heard back saying it had been approved and documents were in the post. They arrived a full two weeks after we made the initial application. APR being offered now: 15.8%... I tore it up there and then. I then went to my bank who approved the loan straight away on a rate of 3.8%! I just wish I'd gone to my bank first instead of these price comparison websites, which quite frankly are a load of rubbish most of the time. I've learnt my lesson anyway and in future I'll be going to my bank first.

Nearlyold

regency_man wrote: »

Where does that 'fact' come from and who is the industry regulator who checks that? If a lender has a set of criteria programmed into their computer, and in a year 1000 people apply 999 of whom don't meet that criteria, how could they possibly give it to 51% of applicants?

Strictly they don't actually have to offer the Representative APR to 51% of applicants they just have to expect to, as this extract from Govt. Guidance makes clear. So in answer to your question "where does that fact come from" It comes from The European "Consumer Credit Directive" incorporated by various acts into UK Law.

Advertising and APRs – (Chapters 5 and 6)
2.1 If an advertisement includes an interest rate or any amount relating to the cost of credit, it must also include a representative example. This must contain certain standard information including a representative APR. The example must be clear and concise and must be more prominent than the information that triggered the inclusion of the example.
2.2 The representative APR must reflect at least 51% of business expected to result from the advertisement. The standard information must be representative of agreements to which the representative APR applies.
2.3 A non-status or comparative indication or incentive triggers a representative APR but does not in itself trigger a representative example. The APR must be more prominent than the relevant indication or incentive.
2.4 The rules for the calculation of the TCC, and hence the APR, differ slightly from the previous requirements, and there are some new assumptions.

For those of a mind to read the full guidance it can be found here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/422707/bis-10-1053-consumer-credit-directive-guidance.pdf

DCFC79

OP if you feel so strongly about this then complain to the FOS or complain to the bank then the FOS.

BenjaminClarke

Deleted_User wrote: »

No. I mean the kind of massaging you see on here when people ask 'what is a good reason to put down for the purpose of the loan?'

I told Tesco Bank the truth. The loan was to consolidate our credit card debts. Maybe if I'd have said the loan was for a new bathroom then they'd have approved it on the rate being offered? The fact I was offered 15.8% instead of the 3.4% offered to me on the price comparison website says to me that Tesco didn't want the business. That's what the world has come to has it? Where you are better off lying through your teeth to get what you want? Just another superficial idea to go along with this superficial society we live in. It's the same in the world of work. I see companies hiring absolute idiots because of what's written on their CV. Young, inexperienced people don't get a chance to prove themselves. I know because I was once one of them. I tried for over a year to get a job in accounts but was knocked back due to a lack of experience. I knew that I could pick up anything easily and just needed an opportunity. In the end I lied and said I gained experience whilst travelling in Australia. I put down a fake Australian telephone number as a reference hoping they wouldn't bother phoning it. Sure enough, within one week, I had a job offer on the table. I worked for that organisation for 7 years and am now a fully qualified junior accountant. Unfortunately we don't live in an honest world anymore. You need to lie and cheat your way through life and that is what I will teach my children to give them the best chance of success, despite it being against my very nature.

BenjaminClarke

Nearlyold wrote: »

Strictly they don't actually have to offer the Representative APR to 51% of applicants they just have to expect to as this extract from Govt. Guidance makes clear :

Advertising and APRs – (Chapters 5 and 6)
2.1 If an advertisement includes an interest rate or any amount relating to the cost of credit, it must also include a representative example. This must contain certain standard information including a representative APR. The example must be clear and concise and must be more prominent than the information that triggered the inclusion of the example.
2.2 The representative APR must reflect at least 51% of business expected to result from the advertisement. The standard information must be representative of agreements to which the representative APR applies.
2.3 A non-status or comparative indication or incentive triggers a representative APR but does not in itself trigger a representative example. The APR must be more prominent than the relevant indication or incentive.
2.4 The rules for the calculation of the TCC, and hence the APR, differ slightly from the previous requirements, and there are some new assumptions.

For those of a mind to read the full guidance it can be found here

And who regulates this? The government? Banks and large corporations do whatever they want and always will. They can offer whatever interest rate they'd like knowing full well that nobody will check it. Who would have the time? I worked for a government funded organisation and we were regulated by an independent company based over 100 miles away. They'd come in for a week, check a few documents and then leave. Obviously we covered up anything we didn't want them to see.

At the end of the day what this is all about is simple. The banks lure you in with attractive interest rates, knowing full well that the reason you are looking for a loan is because you need the money for something. They then take into consideration one thing: how badly you need the loan and then make you a new offer based on that. The fact we were offered 15.8% on a £5000 loan instead of the 3.4% being offered was because Tesco Bank thought we needed the money desperately and therefore would take anything... they were wrong.

Nearlyold

The Financial Conduct Authority took responsibility for regulating Consumer Credit on 1st April 2014