Loan Company Robbery

Lynn_Broughton

I took out a 1 year's interest free credit agreeement with Open & Direct in October 2004 for a suite. I have now been summoned to Court at 10am in Swindon on 3rd June because I am told by Creation Consumer Finance (previously Open & Direct) that I owe £4534.36 in interest.

2004
£2863 by now pay later (1 year) Open & Direct Agreement signed - 24th October.
2005
Suite delivered - 17th January.
2006
Cheque dated 8th January 2006 for £2863 sent to Open and Direct in settlement.
2007
Letters start to arrive in the Summer of 2007 from a company called Creation Consumer Finance stating that I owe £4534.36. I knew I didn't owe a company called Creation Consumer finance any money so I ignored letters believing it to be a scam. I then received a telephone call on 1st June 2007 followed by letter of explanation from Creation Consumer Finance advising me this is for a suite which was delivered to me in January 2005.
2008
Creation Consumer Finance Solicitor confirms to me in telephone conversation of 20th March 2008 that £4534.36 in interest is owed due to the balance of £2863 not being paid in October 2005. In fact they didn't bank the cheque which I sent to them in January until the March (possibly because the company was going through a name change?).

It is very important to note the years underlined above and the fact that the I took out the agreement with Open & Direct and not Creation Consumer Finance.

After this nightmare is over for me personally (whether it goes in my favour or not), I feel so strongly about this that I would like to hear from the public of their experiences with these companies (or others like them). How many people are being intimidated / taken to court by Creation Consumer Finance / Open & Direct and other companies like them - my concerns are particularly for the old vulnerable people who may just pay these huge sums being demanded on request because they are scared literally to death!

standupguy

Did you ask your bank to send you a copy of the cheque as this will help prove the date sent?

Did you send registered post and if so you could produce evidence of date posted?

BellyDuJour

When you took out the 'Buy now pay next year deal' did that not mean you had to pay within 12 months of the date of signing the agreement?

Rafter

The interest looks outrageous given the amount borrowed.

However you don't want a county court judgement against you so you are best to engage with this company to understand where they are coming from.

If you sent the cheque within 1 year of delivery rather than the agreement that seems fair enough to me as a lay person, but you may technically be in breach of the terms and conditions of the offer.

For the company to come back at you 3 years after the event demanding such a large sum is greedy, not 'treating customers fairly' as the FSA puts it.

The maximum you could 'fairly' owe might be the interest from Jan 05 to Jan 06 for failing to make payment by October 05.

I would call to complaint to Creation that you believe that their contract terms might be unfair, that you settled your debt in full within 12 months of delivery of the sofa and asking them to justify the £4,534 in interest and charges. If they aren't willing to cancel the court hearing, you should either try to attend to defend yourself, or at least write to the court stating your case and that you think that the terms are unfair and that the calculation of interest is extortionate.

R.

CHR15

Are you sure the £4534 doesn't include the £2863 they claimed they didn't receive in the October?

If it does, then the interest looks about right for these Buy now Pay later scams (would be an APR of 20-25%ish)

If you are a single day late in paying on time, you will have to pay the entire amount of the credit agreement including interest. That is what they prey on.

Similar thing happened to me once when I was much younger. I bought a washing machine and even told them I would not have the money until the month after the deadline. They (Rumbelows) reassured me I would only have to pay one months interest... Lieing scumbags.

Andyjflet

BellyDuJour wrote: »

When you took out the 'Buy now pay next year deal' did that not mean you had to pay within 12 months of the date of signing the agreement?

Yes this is normally the case, the agreement is 12 months from signing, so by leaving it to January you have then forfitted any interest free period and are liable for the full amount. This unfortunately is a case of not reading the small print

kaya

how else could a company giving interest free loans survive?

Mongy-chops

Andyjflet wrote: »

Yes this is normally the case, the agreement is 12 months from signing, so by leaving it to January you have then forfitted any interest free period and are liable for the full amount. This unfortunately is a case of not reading the small print

Yup, this is the case, special offer dates are always 1 year and a day after the agreement is signed, now when the goods are delivered.

doelani

Andyjflet wrote: »

Yes this is normally the case, the agreement is 12 months from signing, so by leaving it to January you have then forfitted any interest free period and are liable for the full amount. This unfortunately is a case of not reading the small print

Over the years I bought many items on "interest free" including a number of items with Open and Direct. The date due before interest was charged was always taken form the date of agreement signed not the date of delivery.

You need to check your agreement and see what it says about payment date and also amount of interest charged if you do not pay on time.

doelani

Just noticed date of original post so woudl guess whatever was going to happen has happened by now and OP has not posted again .

nomoneytoday

They should rename these from Interest free to defered interest loans.
If you pay within 364 days they are interest free, otherwise they are IMHO extortionate...