Interest Charges on debts with a DMP

kittykat28

Hi
I was wondering if anyone can help?
I started a DMP with Payplan in 2004 for debts totalling £19.6k. I have paid them since then and was told my repayment plan would probably clear the debts in 2012. As of today the current balance still outstanding is £3347.51 even though to date I have paid £20.8k. I have been told by Payplan that this is due to interest and charges by some of my creditors. (One creditor the debt was originally £440.15 but according to them I still owe them £445.64!!)
My question is - does anyone know if either the creditors or Payplan needed to provide me with details of exactly what interest and charges I was actually being charged? I have never had any paperwork from any of them since the debt was put in management.
I have sent CCA letters to all of my creditors but most are with collection agencies and all but 5 can't provide the paperwork. The ones who have haven't provided any details of the charges just a balance and payments I have made (most seem to be from 2012 and not before) and Lloyds didn't even reply to the letter and have now just passed the £1k debt they say I owe on to Lowells who have said they will take me to court. (According to what the debt was and what i have paid this £1k is all charges and interest as the original debt would have been paid)
I have no problem with clearing the debts I accumulated (which in reality I have) but Im finding it very soul destroying to have to pay another £3k out which I have no idea what it is for or how it has been calculated.
Any help or advice regarding this would be greatly welcomed!!!!

sourcrates

Hi,

Usually you write to your creditors and ask them to stop charging interest, and you keep writing until they agree to do so, you appear to of left that a little late now, but if I were you, that's what I'd do, and ask for a refund from the date my DMP started.

You can also request statements at any time, if a creditor has not sent you a statement for any period over 12months, then they are not entitled to charge you interest for the period, and they are also not entitled to enforce the agreement whilst the default continues, you should point this out and ask for a refund also.

kittykat28

Hi
Thank you for replying
Unfortunately I left everything in the hands of Payplan thinking they were working in my interest but it seems they weren't. It's only when they eventually sent me a letter telling me I still owed £3k after having paid for 14 years that I questioned why I had paid more than the original debt and they just replied it was interest and charges but I had no idea what these were, what rate they charged at etc
I have received no statements from any of my creditors in the 14 years I've been with Payplan I just assumed this was normal as they never said otherwise.
Do you know if there is a template letter for asking for proof of the charges and a refund?
I was thinking of going through the Ombudsmen with a complaint against the creditors but not sure if I can or not

sourcrates

On the face of it, it appears there have been some serious breaches of protocol here, but there are a number of things you can do.

In my opinion, you have cause for complaint in two main areas which i will first list, then elaborate on.

(1) Creditors failure to treat you fairly by not reducing or stopping, interest and charges when you first told them you were in financial trouble.

This goes against FSA regulations which state debtors must be treated fairly.

(2) Creditors failure to comply with sec 77A (consumer credit act) failure to provide annual statements, the law on that can be found here :

http://www.legislation.gov.uk/ukpga/1974/39/section/77A

basically it states that as long as a balance remains on the account, they have a duty to supply you with a statement of that account, at least once, every 12 months.

If they fail to do that, then the following applies :

(a)the creditor shall not be entitled to enforce the agreement during the period of non-compliance,

(b)the debtor shall have no liability to pay any sum of interest to the extent calculated by reference to the period of non-compliance or to any part of it,

(c)the debtor shall have no liability to pay any default sum which
would have become payable during the period of non-compliance.

This is what you should do next, suspend all payments to your DMP.

Write to every creditor that this applies to, put your complaint in two parts, first about the interest not been stopped, that it is unfair for creditors to continue charging interest whilst you are in a DMP, and that it goes against FSA guidelines on treating debtors fairly.
Because of this you are asking for a full refund of all interest and charges applied to your account since you entered debt management.

Next, part two, failure to provide statements, you can copy the text above, or from the link i have provided, make sure to ask for a full refund of interest and charges since entering debt management.

Send your complaint to each relevant creditor, written is best, head your letter "COMPLAINT".

Good luck with it, if after 8 weeks, you have not got the response you`d hoped for, or had no response, then forward the whole lot to the financial ombudsman, its a clear breach of regulation, i dont see how you can lose here.

kittykat28

Omg that is such detailed information thank you!
Can I ask one more thing? Both Barclaycard and Lloyds have passed on the debts to collection agencies. The Lloyds one I know about as Lowells have contacted me and are threatening court action - should I contact Lloyds directly and inform Lowells that the amount is in query as it is all interest and charged?
With regards to Barclaycard they have passed in on to someone called Link but I haven't been informed the debt had been passed on by either Barclaycard or Payplan - I only know its been passed on because I looked at my Payplan account and it said on there. Again do I contact Barclaycard directly and inform the debt collectors?
I have to say I am very disappointed with Payplan as in hindsight they really don't seem to have been very communicative about things. Its only through looking at posts on here that I realise how bad they have actually been regarding contacting me regarding my account.

sourcrates

Yes, your dispute will be with the original creditor, but in the case of Lowell specifically, and Link, it would be wise to inform them that a dispute exists.

Normally they will put the account on hold until its resolved.

As Lowell will of bought the debt, it may be wise to send them a copy of the complaint as well.

kittykat28

Thank you!!!! That is really great information.
I have done letters to all of them asking for them to repay the interest and charges which hopefully then should clear the balances that are showing on my credit report because these arent the actual original debt!
Thanks again for your help!

sourcrates

kittykat28 wrote: »

Thank you!!!! That is really great information.
I have done letters to all of them asking for them to repay the interest and charges which hopefully then should clear the balances that are showing on my credit report because these arent the actual original debt!
Thanks again for your help!

Make sure you quote the relevant sections of the act in your letter.

Good luck, keep us posted on your progress.

debtisnotme

You poor thing, it sounds like as Sourcrates says you've been treated very unfairly, I hope this sets your debts to zero and you never know you may even receive some money back in compensation for your complaints. Keep us posted on how you get on, if you need any further help these lovely people will be sure to help.

kittykat28

Its been a big burden on me I have to tell you. I had no problem repaying what I owed at all - I spent 8 years living on £40 a week and nothing else to get them cleared but then to be told I would still be paying for another 8 years because there was still over £3k outstanding which I had no idea what it was! I trusted Payplan but when you get a reply of "creditors will charge interest thats what its made up of" and they can't tell you what the extra £3k is made up - its soul destroying!
I have sent the letters to those who I still have large balances owing even though I don't feel I do...and will let you know how I get on
However in May I sent a letter asking for me CCA and statement of account from Lowells (mainly to stop them for a bit from issuing the CCJ until I could talk to the someone about what I should do as it was the extra £1k charged by Lloyds). They haven't sent me it or acknowledged my letter but two days after receiving it sent another saying I have until 6th June to pay them but they will accept a 20 percent reduction! They have signed for the original letter and also now signed for the one with the copy of the letter to Lloyds but I am worried they will carry on with court action as they don't appear to be heeding the letter.
Am I wrong in thinking if they don't respond to a request for a CCA copy they aren't allowed to take further action?

fatbelly

kittykat28 wrote: »

Am I wrong in thinking if they don't respond to a request for a CCA copy they aren't allowed to take further action?

That's correct - sort of. They can start a court claim but any court action can be stayed until the request is complied with