Affordability complaint rejected, good will gesture offered

Always_Fishing

Hi,

One of my affordability complaints to Abound has been rejected. I've had a mixed bag of replies so far in general, some accepted and some rejected that I've escalated to the financial ombudsman as I feel I have a good case, this one I'm unsure of though given there response and the fact they've offered something in way of a good will gesture.

The loan in total was for £7000, they've rejected it based on the fact that I used £6777 of this to consolidate 3 other loans, which reduced my total monthly repayments from £295 to £199 so their claim is it improved my position rather than made it worse. 

Whilst it did improve my situation momentarily before I learned the hard way consolidation wasn't a good option as I ended up borrowing more on top due to still not being afford to service my debt even with the reduction, I can see the validity in the argument and why it might be also rejected by the FOS. 

The have offered a one time good will gesture of £250 as a full and final settlement of the complaint in recognition the circumstances can change but have been really clear this isn't an acknowledgment of wrong doing. I've calculated to date I've accrued £698.43 in charges as I've only had the loan 6 months so this is the highest I could expect to receive with a successful claim today, however this may obviously still rise short term with further charges. 

On balance, what would peoples advice be, accept the goodwill gesture of £250 rather than risk leaving with nothing if I escalate? I'm currently accruing around £130-135 pm in charges and interest and have missed 2 payments to date. Is there any scope in countering and asking that they add no more interest and charges if I accept? Ignore and proceed with the complaint to the FOS or none of the above?

Thanks 

ManyWays

That is a VERY low offer, less than 2 months of charges.

Abound often make low offers and can be pushed much higher. Your suggestion of saying you will accept that if they agree not to add any further interest or charges sounds a reasonable counteroffer, as its over 400 less than you could get by going to FOS. If you want the full amount refunded, just say no and tell them you are going to FOS if they don't give you a full refund (the 698 plus no future interest or charges)

sourcrates

Never accept the first offer, you must know the score with these things, there is always room to negotiate.

The "goodwill gesture" of £250 will still be on offer as a minimum, no matter what the eventual FOS decision may be.

You have nothing to lose and everything to gain by continuing.

Always_Fishing

sourcrates said:

Never accept the first offer, you must know the score with these things, there is always room to negotiate.

The "goodwill gesture" of £250 will still be on offer as a minimum, no matter what the eventual FOS decision may be.

You have nothing to lose and everything to gain by continuing.

You've mentioned a point there that I was unsure of, is it expected the £250 will still be on the table if I escalate to the FOS and I lose? I'd expected that would be removed if the FOS rejected my claim leading me more down the line of direct negotiations with Abound. 

sourcrates

No the goodwill gesture will be advised to the FOS when they investigate, so that remains on the table whatever else happens, the FOS may agree that £250 is adequate, or they may tell them to increase it, but it will still be there if they don`t.

Rob5342

I've made a number of affordability complaints and I'd suggest that you carry on as be escalate it to the FOS. Lenders get charged something like £500 or £600 if a complaint is escalated to the FOS so they offer less than that to try and stop things going further and save themselves some money. 

sourcrates

Current FOS referral fee is £650.

The first three cases brought each financial year are free, after that the cost is £650 per complaint.

So any first offer, or "gesture of goodwill" is always made with the above in mind.

Always_Fishing

Hi,

Unfortunately yesterday I was too hasty and sent my
reply before all advice was received, making a counter offer of the £250 plus freeze interest and charges. 

They have replied saying they will not freeze interest and charges but will increase the offer to £450 to avoid the FOS fee in their words, however they have a great success rate with the FOS because they go above and beyond etc. etc..

Luckily I have a second bite of the cherry with this one after being a little too hasty, and have politely declined the offer, stating that without the freeze of interest and charges the cash sum will quickly be swallowed up
with more interest and charges and do nothing to improve my long term situation on a product that is not affordable for me. 

I'll await their reply before any further actions, otherwise I'll get my ducks in a row and another one onto the FOS. 

Thanks all. 

Grumpelstiltskin

AF I hope the one thing you have learned from this is don't rush into dong anything connected with your debts.

Always sit back, think and research as there is never a rush.

Always_Fishing

Grumpelstiltskin said:

AF I hope the one thing you have learned from this is don't rush into dong anything connected with your debts.

Always sit back, think and research as there is never a rush.

I thought I was aware before, I definitely am now. 

Always_Fishing

They've responded again to my rejection of the goodwill gesture which has given me a little more confidence in winning this complaint with the FOS. 

They've tried to make it really clear to me how confident they are of defending the complaint and I will end up with no financial redress should I escalate it because only the situation prior to the lending is investigated, not how it changed after the lending. I've pointed out I understand this and I'm confident in my position because as they previously pointed out to me I had 3 other loans before I was given this loan as well as 10 credit accounts in persistent debt and outgoings that exceeded my income. 

I'm possibly overthinking this and perhaps it will mean nothing but I feel they've contradicted themselves here in my favour, as the reason they've claimed the lending was responsible is that AFTER the loan was given I used to to pay off 3 other loans resulting in being £97 better off. However, they've now stated to put me off that only the situation PRIOR to the loan can be argued in the investigation. 

Regardless I've asked them to issue a full and final response so if they indeed reject the complaint I can raise a complaint with the FOS.