MyJar significant balance change?

Biogeneric

Hello,

I took out a loan with MyJar back in July 2015 for £725, I made a couple of payments towards this over 3/4 months but I was in financial difficulty and therefore set up a DMP with Stepchange. From this point I made around 16 regular payments to my account up until February 2017 when my plan with Stepchange ended. At this point my balance with MyJar was £197, however I wasn't aware of any further debt with MyJar, an oversight on my behalf, until not long ago by email as I didn't receive anything by post (and I get a lot of junk via email).

They have now filed a default notice against me for the balance of £725. I looked at my credit file and it actually increased from £197 to £725 in basically the space of a month. Is this possible? Are they allowed to charge this? I have spoken to them on the phone now and they have said £725 is correct as they have charged interest on that £197. I offered to pay the £197 in full today but they have refused.

Do I go ahead and pay the £725? If so I'd have to set up another repayment plan as I wouldn't be able to pay in full. Thoughts guys? Appreciate any advice.

I have a screenshot of my credit file history of this account but it won't let me post it as a new member so here - image.ibb.co/c1cja8/myjar.png

sourcrates

Are you aware of new payday loan rules applied since 2016.

Payday lenders cannot now charge you more than twice what was originally borrowed so that would be £1450 in total.

There sums are accurate unfortunately.

National_Debtline

Hi Biogeneric and welcome to the forum


Do you know if the interest on the loan was frozen when you were in the DMP? If it was, most creditors do not start charging it again, although there is the potential this could happen. Interest would have to be added inline with the terms and conditions of your credit agreement.


The Financial Conduct Authority (FCA) introduced a price cap on high-cost short-term credit on 2 January 2015. These rules said that you could not be asked to pay back more in fees and interest than the amount originally borrowed.


You could request a full statement of the account to see how they have arrived at this amount. You could make your request under sections 77-79 of the Consumer Credit Act (CCA), which would also require them to provide a copy of the credit agreement. You can find more information on this, and a sample letter, here https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx. You will be required to pay a £1 fee.


When was the default added to your credit file? If it did not happen in a timely manner that could be something you can challenge.


Best wishes


Susie
@natdebtline

Biogeneric

sourcrates wrote: »

Are you aware of new payday loan rules applied since 2016.

Payday lenders cannot now charge you more than twice what was originally borrowed so that would be £1450 in total.

There sums are accurate unfortunately.

Yep, aware of that one, I guess in my naivety I saw the £197 vs £725 as the flaw, rather than the original opening balance vs the amount they have added.

National_Debtline wrote: »

Hi Biogeneric and welcome to the forum


Do you know if the interest on the loan was frozen when you were in the DMP? If it was, most creditors do not start charging it again, although there is the potential this could happen. Interest would have to be added inline with the terms and conditions of your credit agreement.


The Financial Conduct Authority (FCA) introduced a price cap on high-cost short-term credit on 2 January 2015. These rules said that you could not be asked to pay back more in fees and interest than the amount originally borrowed.


You could request a full statement of the account to see how they have arrived at this amount. You could make your request under sections 77-79 of the Consumer Credit Act (CCA), which would also require them to provide a copy of the credit agreement. You can find more information on this, and a sample letter, here . You will be required to pay a £1 fee.


When was the default added to your credit file? If it did not happen in a timely manner that could be something you can challenge.


Best wishes


Susie
@natdebtline

Hi Susie, thanks for your reply. They did freeze the interest for the duration of my DMP, and no interest was applied to my balance (per my credit file) for around 7 months after either, when all of a sudden it jumped up from £197 to £725. They issued me a default notice yesterday, so I still have 28 days to pay before they issue the default itself.