Idem servicing advice

Sashie46

Hi

I've currently have a complaint with financial ombudsmen regarding the interest rate of my secured loan purchased in 2007 with button financial. I guess everyone knows the story of picture loans now debt with idem. I've been paying this last 11 years. Not in arrears. But the interest rate is variable but hasn't moved since 2008. It's been 10.4 last 10 years hence my complaint.. my question is. Should they have reduced rate of interest? . Barring in mind bank of england dropped to base rate. They did reduced from 10.9 to 10.4 when interest rates started to drop. Originally. But that's it. Loan amount was for 22k we still owe 18k. Over 300 months. Yes we were utterly stupid.
Thanking you all

davidmcn

Is this all your complaint is about? Unless they promised it would track base rate I can't see they've got any obligation to change it.

ACG

If you had a variable rate tracked against the BoEBR (or something similar) AND there was no "floor rate" quoted, then yes you probably have a complaint.

Sashie46

Yes no floor rate quoted. It says it's variable and that's it. It doesn't say it's not linked to England base rate at all.

Do they figures sound ok to you. It wasn't a front loaded loan. We have 12 years left. And it just seems with that balance it won't get paid off. Only 50 comes off a month.

kingstreet

Refinance it with another lender?

[Deleted User]

Sashie46 wrote: »

And it just seems with that balance it won't get paid off. Only 50 comes off a month.

The £50 reduction demonstrates that it will get paid off.

And as the capital reduces, so does the interest, so more of your monthly repayment goes towards paying the capital.

dunstonh

Should they have reduced rate of interest?

No. There is no legal requirement for them to adjust the rates. Only the contract terms apply.

Barring in mind bank of england dropped to base rate. They did reduced from 10.9 to 10.4 when interest rates started to drop.

However, they are not a mainstream lender and much of their financing for mortgages was pre-credit crunch and not necessarily things linked to the base rate.

Is there any reason why you have not remortgaged away from them?

Sashie46

Our credit file was bad but has improved massively.. we want to move now. The complaint has been with the ombudsmen since 2016. Idem did ring me Xmas time and asked what it would take to settle complaint. I said 10k off loan and put the 8 unsecured. They declined what I wanted.
I have asked again if they would take 10k to settle. No reply as yet.

ACG

Sashie46 wrote: »

It doesn't say it's not linked to England base rate at all.

But it does not say it is either.

It could be linked to libor, it could be linked to Bank of Turkey base rate - maybe not, but you get the idea. Although presumably it should tell you what it is linked to.

Sashie46

Nope it doesn't say anything although linked to consumer credit act of 1974. Consumer Settlement of 2004..

Sashie46

It says on contract

In calculating Apr no account has been taken of any variation of the interest rate which may occur under the agreement. The interest rate may be varied to reflect change which has occurred. Or which we reasonably expect to occur. In interest rates generally or to redress any reduction in our profitability caused by changes to legislation.

It's under consumer credit act 1974. The timeshare act of 1992. And regulations 2004.