14 Day Cooling Off Period

mcc28_x

Hi,

On Thursday last week I signed a credit agreement with Cahoot for their flexible loan and returned it to them.

Yesterday, Monday, I decided not to bother with the loan and use money from my savings. I logged into Cahoot and cancelled the loan as instructed in the agreement.

I received an email today saying that I had to request a settlement fee to pay the interest. Is this correct, does anyone know? I was under the impression the fourteen day period was their for me to change my mind without penalty...

As an aside after I elected to cancel the loan last night, Cahoot have (at least from their end) transmitted the funds to my current account with another bank.

All seems abit manipulative to me? Any advice appreciated.

Mark

YorkshireBoy

mcc28_x wrote:

I received an email today saying that I had to request a settlement fee to pay the interest. Is this correct, does anyone know? I was under the impression the fourteen day period was their for me to change my mind without penalty...

From the T&C's (you have read them haven't you?)...

======================
4. Cooling Off

4.2 You can cancel a cahoot fixed rate loan , cahoot flexible loan or cahoot credit card within 14 days of entering into the agreement with us. You can also cancel your overdraft within 14 days of cahoot providing you with this service. If you decide to cancel your agreement or your overdraft, you must repay all amounts you owe to us as soon as possible and no later than 30 days after canceling your agreement. You must pay any interest incurred on your overdraft balance up until the time you notify us that you want to cancel it.
======================

This paragraph talks about cancelling loans, credit cards and overdrafts throughout, yet only mentions interest in the context of an "overdraft" in the last sentence. Have they left themselves wide open here? It seems with the above section 4.2 they cannot make a charge for interest on a loan agreement if cancelled within 14 days.

grumbler

A little more general information:

http://www.bbc.co.uk/watchdog/asktheexperts/credit/credit08.shtml

Is there a cooling off period with a credit agreement?


Does an agreement regulated by consumer credit act give right to a cooling off period?

In a couple of limited circumstances a debtor will have a "cooling off" period under a regulated consumer credit agreement.

Firstly where face-to-face negotiations take place and the debtor signs the agreement away from the creditor's premises (eg. at home), a debtor has a post-contract "cooling off" period in which he/she can cancel.

This cancellation period starts when the debtor signs the agreement and ends 5 days after he/she receives the second notice of cancellation rights (usually contained in a second copy agreement).

In relation to second mortgages (not exceeding £25,000) granted by finance companies, a debtor has a pre-contract "cooling off" period in which he/she can decide, undisturbed, whether or not to proceed with the loan. This "cooling off" period lasts between 7 to 14 days.

[size=-2]The content supplied on this page is based on the law applying on 01/01/2005. Please consult your own lawyer for further information regarding your rights.[/size]

mcc28_x

After replying to Cahoot stating there was a 14 day cooling off period, they recalled the BACS transfer and charged zero interest.

Cheers

Mark

kremmen

Abbey cooling off tale

I was waiting for the proceeds from a house sale to come through and (as always when waiting for money) it was taking too long so I phone my Abbey customer services to ask for a large overdraft for 4 weeks (£15k). I was told that they could do nothing over the phone but to go to my local branch and see if they could help.

At my branch a very efficient young lady advised that she could not get that amount of money as an overdraft BUT I could most likely get a loan...remembering the last time I tried to pay off a loan early (large early redemption charges) I nearly left the building...HOWEVER I was assured that if I paid the loan off in 30 days they were legally obliged to charge me nothing.SI I took out the loan and HEY PRESTO I paid the money back and there was NO charge...RESULT.

I asked why the bank did not just give me the overdraft and at least earn themselves some money and was told by a most honest employee that the company hoped that I would not pay off the loan as planned and therefore they would make more profit.

It worked for me.

TA Abbey

Paul