First plus ripoff

We should have some news on this on Friday. The OFT have advised that a "decision" will be notified by Fri 11th. Seems like they've made a general decision as others on www.FirstPlusComplaints.co.uk have been told the same.

Not sure how to define "decision", as my last conversation with them had them going full circle with them saying they don't rule on individual complaints (despite their published agreement with the FSA to do just that).

Anyhow, fingers crossed that it'll be some good news, as BFP customers should really fear for the future if this goes against us.

To be honest Julie that is not unfair. That is how loans work. You pay more interest at the start as you owe more capital. The capital repayments increase over the term in line with the reduction in interest payable. Make sense? If not i can do an example.

What is unfair is the fact that Barclays Firstplus sold me a loan expecting to make £1,632 profit a year (based on FHBR and my APR's variance against FHBR)

They are now making £4,320 profit per year.

So they have increased the cost by 165% because it is "prudent & efficient" of them to do so.

Now that gap / profit has been established they cannot afford for it be reduced as they have lost commission income & PPI income.

Therefore when base rates increase so will APR's.

The problem here is: -

Complain to Firstplus and they say “there is nothing for us to answer" and you can complain to the FOS but the FOS will only adjudicate if it is maladministration.

Complain the FOS and their job is to ensure FP comply within the meaning of the term not judge the fairness of their term and the effect of unfairness on individuals.

Complain to the FLA, who reply "we only look at our lending code", try the FSA.

Complain to the FSA, "thanks for the complaint but the Unfair Terms in Consumer Contract Regulations stuff in secured loan agreements is the responsibility of the OFT"

Complain to the OFT, "thanks and it is noted, any consumer complaints really need to go to the FOS".

The update this week from the OFT was basically, "we cannot tell you what, if anything, we are doing as we are contrained by Section 237 of the Enterprise Act" :mad:

We fight on, but ultimately this will end up in court as ultimately only a court can rule on fairness. Maybe the OFT are actually doing something, but what this has taught me is the regulators are basically toothless.

I am in the process of seeking clarification from Barclays FirstPlus of the reasons behind rate variations since my loan commenced. This is pretty old news to me as I'm in the process of taking civil action against them, but i thought fellow customers might find this useful. I have kept some but not all rate change letters. I know the explanations are accurate i just need their confirmation.

January 2006 – loan inception. APR 8.4%. No clarification required.


January 2007 – Increase of 0.5% to 8.9%. Explanation given “The BoE has raised interest rates twice in recent months – once in August by 0.25% and once in November by 0.25%”. Please confirm.


March 2007 – Increase of 0.3% to 9.2%. Explanation given “The BoE raised interest rates twice in 2006 – once in August by 0.25% and once in November by 0.25%. This resulted in FHBR rate rising by 0.5%. The additional BoE rate increase in January 2007 has resulted in us having to pass on further costs to customers by raising the variable interest rate on your loan.” Please confirm.


April 2007 – Increase of 0.5% to 9.7%. Explanation given “Any changes to the BoE interest rate or FHBR could affect the rate we charge to our customers. The latest change was the Finance House Base Rate increase in March 2007”. Please confirm.


July 2007 – Increase of 0.3% to 10%. Explanation given “The way in which our rates are calculated is based on the Finance House Base Rate (FHBR). However, any changes to the Bank of England interest rate or Finance House Base Rate could affect the rate we charge our customers. Both the bank of England interest rates and the Finance House Base Rate have increased in the last 12 months. The Bank of England raised interest rates twice in 2006, once in August by 0.25% and once in November by 0.25%. This resulted in FHBR rising by 0.5%. This was followed by a further Bank of England rate increase in January 2007 which led to an increase of 0.5% in FHBR in March 2007. The latest increase by the Bank of England in July 2007 was 0.25%. We are therefore raising the interest rate on your loan.” Please confirm.


January 2008 – Increase of 0.3% to 10.3%. Explanation given “Any change to the Bank of England interest rates or Finance House Base Rate (FHBR) could affect the rate we charge our customers. Since our last interest rate increase in July 2007 there have been further changes to the Finance House Base Rate. We will now be changing your rate.” Please confirm.


Notice a trend with the above?


March 2008 – Decrease of 1.1% to 9.2%. Explanation given “We regularly review our existing customer rates in line with market conditions. As a result of the latest review I am pleased to inform you that the interest rate on your loan will decrease.” Please confirm, however I would prefer you to be honest and confirm that it was a contractual obligation.


May 2008 – Increase of 0.5% to 9.7%. Explanation given “We have recently reviewed this rate and will be increasing it to reflect the increased underlying costs associated with borrowing and prevailing market conditions.” Please confirm, however I would prefer you to be honest and confirm that you were simply maximising your allowable return by reverting me back to my rate of 12 months previous.


August 2008 – Increase of 0.3% to 10%. Explanation given “Our product, like a mortgage, is a variable rate product; therefore rates can fluctuate up and down. We ensure that rate changes are fair and manageable; therefore your interest rate is no higher than it was 12 months ago and our product is still one of the most competitive on the market.” Please confirm, however I would prefer you to be honest and confirm that you were simply maximising your allowable return by reverting me back to my rate of 12 months previous.


February 2009 – Decrease of 0.8% to 9.2%. Explanation given “We have reviewed the interest rate on your account in line with our contractual obligations to you.” Please confirm. I would like to add that I like the honesty in this one.


September 2009 – Increase by 0.8% to 10%. Explanation given “We have recently reviewed our rates and as a business have made a decision to increase interest rates to ensure that our business is sustainably and prudently managed”. Please confirm, however I would prefer you to be honest and confirm that you were simply maximising your allowable return by reverting me back to my rate of 12 months previous.


March 2010 – Decrease by 0.8% to 9.2%. I await your explanation :rotfl:

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