Clydesdale's massive early repayment & letter charges

[scottcf]

I have defaulted on a payment of £70 on an interest free loan from Clydesdale. (Loan via a skills train advisor for the amount of £2450 at 0% over 35 months) The reason being that i have just been made redundant. Here is the letter that i have been sent by them.

 

"Your account is currently overdue. We believe this to be an oversight on your behalf, but in accordance with the conditions of your agreement with us, a £22.50 charge has been applied to your account to recover our costs. Please settle the overdue amount immediately. We have attached a Bank Giro Credit Slip for your convenience.

Your account will be reviewed in 10days from the date of this letter. If it is necessary to correspond further with you on this matter an additional £22.50 will be applied to your account to recover our costs"

 

1. Review account in 10 days from date of letter, which was sent 2nd class, so that leaves me with 7-8 days to resolve or else i will be charged again.
   
2. Phoned the (call centre) number supplied who advised me to get in touch with their customer relations department, and when i asked for their phone number, to help to resolve this quickly so as to not incur any more charges, i was told "they only correspond through the post, you have to send a letter" So I asked for their email address "Because of viruses they do not correspond via email"!!!!!
   
3. I told the "advisor" that i could send a letter for around 30p and all i recieved was indifference.
   
4. This all seems like they are trying to get me into a trap of paying charges.
   
5. I asked whether the call was being recorded as i couldn't believe my ears and it was not!
   
6. I may be able in a few days to settle the complete loan (approx. £1890 outstanding) as i am getting some redundancy money. However, in reading the small print (I should have read it first i know but didn't as i signed up through a third party rep (skills train) who called at my house, and they allways seem keen to be at their next call.) that it will cost me an extra £750 to repay early!!!!!!!!

My questions are

1. Is there any way of settling the loan without paying the extra £750?
   
2. Do i have to pay theseidiculous £22.50 letter charges?

Sorry for the length, nbut i thought that the more i told you, the better advice you could offer. Many thanks in advance.

[scottcf]

Sorry, i forgot! Question 3, If i do have to pay the £750 early repayment charge, can i claim it, and or the £22.50 back?

(Note that any new job i get will probably be paying less in wages than when i agreed to this loan so this is why i would like to remove the £70 per month burden.) Thanks again.

[turt77]

Let me get this straight.

 

You've missed a payment on the loan so they've cancelled your agreement and are demanding the whole lot back?

 

And because they're demanding it back they want you to pay and extra £750 to repay early?

 

I would question that if I were you because they are the ones cancelling the agreement.

 

The £22.50 for sending you a letter is almost certainly a penalty and therefore unlawful.

[turt77]

Sorry I misread.

 

When you get your redundancy money, set it to one side (in a high interest savings account) and keep up your mothly payments to them. Your loan is 0% anyway so you aren't losing anything by keeping it as it is.

 

Challenge the penalties that they are adding

[scottcf]

Thanks for the quick response turt77, thats a good idea for the redundancy money i'll do that.

So you reckon that i can challenge the £22.50 (allegedly to cover costs of DD returning, but then going on to admit in their letter that

"If it is necessary to correspond further with you on this matter an additional £22.50 will be applied to your account to recover our costs already charged,"

 

How do i challenge this?

Am i putting myself at risk of getting my fingers burnt? ie it costing more in the long run.

Do i have to pay the £22.50 first and then claim it back later?

 

Please note that i have allways hated bank charges as they are obscenely large and if i can claim this £22.50 back, then i will as it is a matter of principle and everyone should do it if it is realistic.

[turt77]

If you're only challenging one or two instances of unlawful charging, then give them another ring. Explain that you believe them to be a penalty and therefore against common law and unenforcable (you can have a look around this site for the appropriate statutes).

 

As it's only £45 they may well just write it off without you having to go through the hassle. Its a long and drawn out process and they couldnt justify holding on to £45.

[caro]

Sounds good to me Turt.

[trundlecat]

Hasn't there been something about these high early repayment charges from the OFT in the last year or so? I'm sure there has, I'll have a look around cos £750 seem extortionate especially as there are no interest charges to take into account.

[trundlecat]

Thought I'd read something about it. They have to prove any fees are a Genuine pre-estimate of loss, rather than a penalty. How can they have a loss of £750 on an interest free loan?

 

Will dig further cos I think there's a letter somewhere.