Barclays 5 year dispute

kevnewcastle

Hi
In Dec 2011 I borrowed £20000 to consolidate debts while waiting for my house to sell. I explained to the agent my needs were short term. In July 2012 my house sold - in Aug 2012 I repaid £19500 which was the balance outstanding according to Barclays online banking, despite having made 7 x £233 payments (£2331) in total. Barclays came back to me saying the balance was in fact £19940 therefore I still owed almost £500. I refused to pay and raised a complaint which was not upheld. I did nothing and after that I only received annual statements showing the £500 balance plus interest added. Barclays sent no letters pursuing further repayments at all.

Fast forward to 2017 - a few weeks ago. Barclays have begun a bombardment of letters, phone calls and text messages telling me I have missed payments and requesting me to repay the outstanding balance which is around £900. I have spoken to a complaints person and expressed the following issues:

1. Barclays behaved irresponsibly in offering me a loan which was unsuitable for my short-term lending needs. I made these needs clear in the lengthy phone call with the Barclays Customer services agent at the time, who I remember seemed more interested in selling me additional products. I was not made aware that I would be charged such high upfront interest or early repayment costs at the time, and I feel given my short term needs this should have been made explicit to me, or possibly even resulted in my request to borrow being declined.
2. Barclays online banking did not show me an accurate outstanding balance on the loan. I feel your explanation that the figure does not include interest calculations is inadequate - given that the term, the interest rate, the repayment amounts were all fixed it was surely possible with today's computing power in financial systems to produce a daily calculation showing the correct amount outstanding. I was not able to budget my finances accurately with this misleading information. When my house sold (6 months into the loan) I paid what Barclays had clearly displayed as the loan balance in my online banking.
3. Barclays have made no attempt to keep me informed as to what would happen following the initial disagreement 5 years ago. I was never informed that the £19500 payment I made effectively 'covered things' for the next five years. It is irresponsible of Barclays to suddenly begin a barrage of harassing letters, phone calls and text messages after five years of non-communication on the matter.

The complaints person has dismissed my complaints.

Can anyone advise what I should do next? What are my options? I have a clear credit history and would like to avoid bad-credit record entries.

Thank you.

Kevin

[Deleted User]

It sounds as if you took the current balance and treated it as a settlement figure. You should have requested a settlement figure. Ignoring the outstanding balance was a further mistake.

I don't see how it was the wrong type of loan for you - it gave you flexibility to settle whenever you wanted and would have had a lower rate than other short term options.

Try to come to a settlement as soon as you can. You may get a goodwill gestures if statements were not sent.

Check all three of your credit files to see what appears.

PeacefulWaters

When your complaint wasn't upheld you should have paid the sum due - and gone to the FOS if you still felt the decision was unfair.

Barclays have had no need to chase you for money as you've been £thousand ahead on due payments until recently. Now the term is up this is no longer the case and the final payment or two is due.

I'd suggest you pay them the sum due, check your credit file is clear and, if you have a dispute with a lender in future don't be so stupid as to withhold payment and expect it to just go away.

takman

Well the only sensible thing to do is check your original loan agreements and make sure the amount owed is correct then pay it.

You really shouldn't have continued with the loan if you were not happy with the repayment terms. It's not the banks job to hold your hand and explain every little detail orally when it's all written in the loan agreement. You seem to have buried your head in the sand about this for 5 years and hoped they would forget about the money you owe.

If you had paid this 5 years ago then it would have only cost you £440 now it's costing you £900. Delay it any longer and it will end up costing you more.

kevnewcastle wrote: »

, despite having made 7 x £233 payments (£2331) in total.

Also £233 x 7 = £1631 and not £2331 as you stated.

kevnewcastle

Sorry it was 7 x £333.

Thanks for your replies. What is the best way to try and get a lower settlement figure?

[Deleted User]

Find out the status of the account first. If by some miracle it doesn't appear as a default, then pay the full amount immediately.

If your credit file is already trashed, then you could try making an offer, but don't get your hopes up.

Nearlyold

The online figure showing a balance of £19,500 would not have been the settlement figure as lenders are allowed to add up to 58 days interest as an early settlement charge which is presumably where the extra £440 came from. It was your mistake to assume the current balance shown was the settlement figure - did you ask for a settlement figure before paying £19500. From your monthly payment figures of £333 you would have paid £2331 reducing the principle by £500 means you would have paid £1830 in interest over 7 months so £440 to pay in early settlement charges seems correct.

kevnewcastle

It was 120 months. 15.9%. Repayments were £333 monthly not £233 typo sorry. I didn;t ask for settlement figure.

PeacefulWaters

kevnewcastle wrote: »

I didn;t ask for settlement figure.

Rather foolish to assume the online number was a settlement figure. Even more foolish to argue the toss.

Call them, grovel a bit. But don't expect a rebate.

kevnewcastle

Ok thanks - I get the message - I've been foolish. No need to be a !!!!!! though PeacefulWater.

Thanks to all of you who've responded in a less condescending manner.

HogMan

The £500 that the bank said was owed looks as though it was correct.
Interest owed @15.9% for first 7 months comes to £1835. Payments made = £2331 (7 *333) thus owing = £496.
At the beginning of a loan most of the repayments goes to paying off interest rather than capital.