firstplus interest rates

bulldogforever

Lover_of_Lycra said:

bulldogforever said:

Edwards 97:- well yes variable as I understand it would mean both up and down

 Thrugelmir:-  I feel you are saying its just the way it is, and all my fault for not being financially astute enough to realise that when they said it is like  mortgage and when the interest rate clause states a sort of link to the FHBR (which on examination is/was linked directly to FHBR) I would think that it should in all fairness have come down.

I am hoping that this is resolved in a fair way at some point and maybe someone on here would know if it had

What do the terms and conditions of your loan say about how and when the rate will vary.  The variance is not necessarily tied to the BoE, it could be in line with something else, and there could be a floor under which the rate will never drop.  Instead of going straight to redress you need to understand what you agreed to in the first place.  

In my instance it appeared to be linked to the FHBR, which in turn had a mathematical link to another index, which in turn was very heavily influenced by the BofE  base rate (All these rates fell dramatically yet my loan did not).That however is a contingent fact upon the argument that says they are entitled to their rigidly defined pound of flesh. 

I think that what this ultimately hinges on is the understanding of the words ”unfair”  and “variable” specifically that variable should mean Down as well as up and that the word unfair should have some relationship to the term as understood in general and in law.

An example of the injustice that can come from getting the word “unfair” wrong lies in PPI where at one time it was held that very high commission was acceptable and claims were rejected, but at a later date a court rejected this and said at some point very high commission made it unfair.

Portia was very harsh on Shylock in my opinion. With her sophistic  coming down on the side of her kinfolk, and in a similar vain the regulators here have denied justice so far by wilfully not grasping the issue of “unfairness” and “variable”.

Portia stands as a heroine but she is not, she stood as judge but was not, the  regulators stand as our guardians but to date they have not delivered, they effectively justify injustice with procrastinating about contingencies in relation to clauses and thereby skirt round the central unfairness of the situation. (imo)  as to who is Shylock and when and who is Porta and when I am somewhat muddled

I was just hoping that the issue of fairness had been resolved by now and that I could get some redress, I am confident that at sometime it will be

[Deleted User]

bulldogforever said:

Lover_of_Lycra said:

bulldogforever said:

Edwards 97:- well yes variable as I understand it would mean both up and see down

 Thrugelmir:-  I feel you are saying its just the way it is, and all my fault for not being financially astute enough to realise that when they said it is like  mortgage and when the interest rate clause states a sort of link to the FHBR (which on examination is/was linked directly to FHBR) I would think that it should in all fairness have come down.

I am hoping that this is resolved in a fair way at some point and maybe someone on here would know if it had

What do the terms and conditions of your loan say about how and when the rate will vary.  The variance is not necessarily tied to the BoE, it could be in line with something else, and there could be a floor under which the rate will never drop.  Instead of going straight to redress you need to understand what you agreed to in the first place.  

In my instance it appeared to be linked to the FHBR, which in turn had a mathematical link to another index, which in turn was very heavily influenced by the BofE  base rate (All these rates fell dramatically yet my loan did not).That however is a contingent fact upon the argument that says they are entitled to their rigidly defined pound of flesh. 

I think that what this ultimately hinges on is the understanding of the words ”unfair”  and “variable” specifically that variable should mean Down as well as up and that the word unfair should have some relationship to the term as understood in general and in law.

An example of the injustice that can come from getting the word “unfair” wrong lies in PPI where at one time it was held that very high commission was acceptable and claims were rejected, but at a later date a court rejected this and said at some point very high commission made it unfair.

Portia was very harsh on Shylock in my opinion. With her sophistic  coming down on the side of her kinfolk, and in a similar vain the regulators here have denied justice so far by wilfully not grasping the issue of “unfairness” and “variable”.

Portia stands as a heroine but she is not, she stood as judge but was not, the  regulators stand as our guardians but to date they have not delivered, they effectively justify injustice with procrastinating about contingencies in relation to clauses and thereby skirt round the central unfairness of the situation. (imo)  as to who is Shylock and when and who is Porta and when I am somewhat muddled

I was just hoping that the issue of fairness had been resolved by now and that I could get some redress, I am confident that at sometime it will be

It would be more helpful if you quoted the actual terms of your loan’s variable interest rate verbatim than giving us your opinions on characters in the Merchant of Venice. 

From the information you have provided however it seems the variable interest rate is based on the Finance House Base Rate (FHBR) which is calculated by the Finance & Leasing Association (FLA) on a monthly basis by averaging 3 months Sterling London Inter-Bank Offered Rate (LIBOR) over the previous eight weeks, with the resulting figure then rounded up to the next half point. It’s purely arithmetic. After a quick internet search it appears the LIBOR is increasing and not decreasing. 

bulldogforever

Lover_of_lycra :-

Thanks for your response, I tend to formulate ideas in my own way that is for sure. That said I did cover much of the ground you ask for saving the actual words of the clause which I believe to be contingent to the issue, the over riding issue being fairness.

As such I really am not inclined to traverse the side Boreen that is the nitty gritty of the loan clause, I believe that there may be a number of different clauses used by the lender and that the route is therefore divisive.

You repeat back to me that there is a math link to Libor, which is fine, you go on to say libor is rising, which it maybe; however you do not address the failure to reduce rates at all when Libor the FHBR BofE base rate and all other indices fell by 5%. 

 

This is basically unfair even if the clause were to read (or was interpreted as) “we can do what we like with interest rates” it would be unfair in law and common day understanding of the term “unfair” .

I have learnt to expect the wheels of justice to grind slowly but get there in the end, as with the example I gave (finding high commission rates on PPI did mean that PPI was mis sold). 

As such I am hoping that the day this unfairness is recognized is not long in coming

[Deleted User]

It’s somewhat difficult to address the rate not decreasing when I cannot read the terms of your loan from here. Many variable rate loans have a floor rate under which they will not drop. Your loan might have such a clause but I don’t know because I haven’t read the T&C. 

Whilst part of the LIBOR is based on the BoE base rate the rest of the rate is based on risk. It doesn’t automatically follow that because the BoE decreases the LIBOR will decrease with it. If the perception of risk increases faster than the BoE cuts its rate then the LIBOR can go up whilst the BoE base rate goes down.  

bulldogforever

Lover_of_Lycra said:

It’s somewhat difficult to address the rate not decreasing when I cannot read the terms of your loan from here. Many variable rate loans have a floor rate under which they will not drop. Your loan might have such a clause but I don’t know because I haven’t read the T&C. 

Whilst part of the LIBOR is based on the BoE base rate the rest of the rate is based on risk. It doesn’t automatically follow that because the BoE decreases the LIBOR will decrease with it. If the perception of risk increases faster than the BoE cuts its rate then the LIBOR can go up whilst the BoE base rate goes down.  

Thanks again, I would clarify that there is no floor clause written in the loan agreement, I believe they came into common usage sometime after the financial crash and sudden fall in interest rates across all indices. I am referring to The drop of 5% occurred across the board after the financial crash of 2008 and was not passed on, even in part to a hidden floor as might be found to be reasonable by some. No nothing was passed on, as such I find it unfair and yes would argue for it to have tracked the Bof E and every other index downward, take your pick they all went down by 5% It is a matter of fairness and I am hoping that this is recognized and people can get some recompense thats all

I can see that you wish to focus on the words in the clause and are applying a notion of "buyer beware" which is good in many ways however since the 70's  there has been a move to inject a notion of Fairness into consumer contracts in general and consumer credit in particular, not reducing rates in these circumstances was not in keeping with this notion and eventually needs to be addressed as a fairness issue, I am hoping the day that occurs is not that far away

[Deleted User]

Forget about the BoE and every other index, what have the historical Sterling LIBOR rates been because that’s what your interest rate is based on? 

bulldogforever

As stated (as one of the "every other") it fell by 5% my interest rate fell by 0% here in lies the unfairness

the technicalities of the contractual words are not the issue it is the fairness or more accurately the "unfairness" in relation to UCR and contractual unfairness in general (both in terms of everyday usage and legal usage)

[Deleted User]

bulldogforever said:

As stated (as one of the "every other") it fell by 5% my interest rate fell by 0% here in lies the unfairness

the technicalities of the contractual words are not the issue it is the fairness or more accurately the "unfairness" in relation to UCR and contractual unfairness in general (both in terms of everyday usage and legal usage)

I’m asking for actual historical figures not a generic 5%. 

If you think your contract is unfair then complain to FirstDirect. If you don’t like the response go to the ombudsman. 

bulldogforever

Lover_of_Lycra said:

bulldogforever said:

As stated (as one of the "every other") it fell by 5% my interest rate fell by 0% here in lies the unfairness

the technicalities of the contractual words are not the issue it is the fairness or more accurately the "unfairness" in relation to UCR and contractual unfairness in general (both in terms of everyday usage and legal usage)

I’m asking for actual historical figures not a generic 5%. 

If you think your contract is unfair then complain to FirstDirect. If you don’t like the response go to the ombudsman. 

in aug 2007 1 month libor was 5.72% in aug 2009 it was 0.26% so a drop of 5.46% which was never passed on!
 it has risen since but never above 2.4% and is now at 0.16%

5% plus drop in that rate as with all others!!!
No drop in the rates FirstPlus applied to loans, it is my view that this simply is not fair. I would like to know if anyone has had success in taking this to the ombudsman though, I mean it is a very sizeable chunk of change that could easily be £30000 or £40000 for some people

It appears I have to first complain to Firstplus or Elderbridge has anyone experience of doing this (re interest rate variation)

Seems like there are potentially 10000 people who could benefit from this as ex customers of firstplus and hundreds of thousands who borrowed elsewhere, strange that there is not much interest in it...........yet

bulldogforever

Deleted_User said:

Unless the rate was guaranteed to drop, then no.

I find this response somewhat negative and after the post from Edwards97 and further digging incorrect.

To expand searching through posts on MSE I found reference to a Freedom of information request to the financial ombudsman  on the subject, from the information in that post I have been able to confirm that he is not alone.

According to the FOS “Of the cases we have received about the interest rate variation clause in Firstplus secured

loan contracts, 150 have resulted in an informal offer of settlement by Firstplus. There are

currently 60 cases about the same issue that we are still considering. “

This is an extract from a letter referenced FOI 3977 by the FOS and can be easily verified by searching “FOI 3977 FOS”

So it appears that cases are being settled and the FOS are actively involved in trying to resolve this. 

I was hoping for a more positive attitude from MSE members such as yourself, one that would save me and potentially thousands of others money as implied by the name “money saying expert” however the response I have received from you was an emphatic no! I just don’t understand why you come across as so negative and unsupporting about this issue?

 

I and tens of thousands of others have been treated unfairly on this matter and I was hoping for help and support from this forum to get redress, not just for me but for many others, there is a clear historic unfairness here.

My use of figures has been questioned because one figure very neatly comes in at 5% for much of the last few years, I use this figure as the calculations can be complex and to demonstrate the unfairness, Firstplus loans varied in size and loans of 50K or more were not uncommon, running a 50k loan over 15 years through a mortgage calculator with 5% gives an over-payment of £18K 

This is only a starting point as interest at 8% on overpayments would also be due (like with PPI)

Even if the loan has run its course and been paid of a substantial redress could be due and yes we are talking about tens of thousands of pounds of hard working peoples money here