Picture - Interest rates on secured loans

[The Phantom]

Not sure if other customers of Picture Financial had a letter from them today advising their customers they have increased their rate to almost double the BoE base rate to 10.34 % !! therefore increasing our monthly payments by almost £40.- without the BoE announcing a further rise

They explain this with the unstable financial market and basically blame this for this jump

It sounds as if all their customers are affected but not sure, as we had a missed payment last month and they may have done it to penalize us

Is there anything one can do about this extortion ?

 

I am tempted to write back to them asking for a breakdown of their borrowing costs and advise them their rise is unacceptable making it double the BoE base rate

 

Has anybody any ideas ?

[payingonlyencouragesthem]

I am tempted to write back to them asking for a breakdown of their borrowing costs and advise them their rise is unacceptable making it double the BoE base rate

 

Has anybody any ideas ?

 

If it is a secured loan you could almost certainly shop around for a better deal. You could also try complaining to the FOS - at least it would cost them £400.

[The Phantom]

Yes, it is secured, but we can't at the moment look for a new better deal, because of our credit history. OH is not yet discharged from BR (will be discharged early October). But due to that it may be difficult to find a new lender

But I will definitely write to Picture and complain as this rise is totally disproportionate. I think I can only take the matter to FoS once I have exhausted Picture's complaint system ?

[payingonlyencouragesthem]

I think I can only take the matter to FoS once I have exhausted Picture's complaint system ?

 

True, Nicole, but that won't take you very long:-). BTW you have stolen a moderator's avatar. I preferred the little dog:wink:.

[The Phantom]

Yes, I think livelylad uses the hooded guy occasionally as well, changed it again for some variety

How's that ? Any better ?

 

OK, will write to them complaining and see what they say (probably tough)

and see where we go

I will keep this thread going, to see if other customers of this bunch also got this letter and if we can organise for more people to write in and complain to them.

 

10.34% and they happily increased the rate with the BoE as well. This is on top of all those increases. They must be out of their mind:x

[payingonlyencouragesthem]

Much better:). livelylad should stick to his sergeant major avatar - much more moderatorish;).

 

Keep the thread warm - these unnecessary interest rate screw turnings could become a hot topic.

[The Phantom]

I think you are quite right - it will become an issue

Had a message earlier from someone else to tell me Cahoot increased their rate to 22.5 % on a loan also with the explanation of the unstable state of the market..., surely this is extortion with the base rate being 5.75 %

How can they justify an interest rate almost 17% above base rate ?

[chickpea]

We had the same letter too yesterday so I don't think missing a payment was the cause.

 

I can understand them raising the rate in line with the Bank of England rate rises but this seems totally unacceptable. It makes me wonder whether they are raising the interest rates because they are getting a lot of complaints about mis-sold PPI.

 

I will be interested to hear how they respond to your letter.

[gizmo111]

What does it say in your contract about rising rates?

[rory32]

You will find some of the reasons for this here

 

BBC NEWS | Programmes | Moneybox | Markets: Savings and borrowing

[The Phantom]

Good point Gizmo, what does it say ?

 

It is a variable rate so much I do know, but have I read the small print ?

Of course I haven't

 

At the bottom of the letter it says as a kind of PS : Picture loans have a variable interest rate, details of which can be found in clause 2.2 of your agreement. (At least I now know where to look in the tiny small print)

 

I know there was an issue with their PPI, we also took it out when we took out the loan.

Apparently if you don't make a claim you get like a no claims refund after 3,4 and 5 years.

Not sure if they do actually pay out or whether it is just a ploy, we will find out in January when 3 years are up I guess

Would be nice if it was true, we would get £3000.- if we were to believe them.

 

My OH now doesn't want me to complain as he thinks we won't get the money if we complain and annoy them, but hey, they may still find another 20 clauses as to why not to pay out anyway (probably also in their small print), so let's go for it

[The Phantom]

You will find some of the reasons for this here

 

BBC NEWS | Programmes | Moneybox | Markets: Savings and borrowing

 

I went there but it appears you can only listen to it, not actually read the information. Everytime I try to listen, I am told I haven't got the plug-ins or whatever:confused:

You couldn't just give a quick summary by any chance ?

[rory32]

There will be rises in loans and mortgages in the UK due to the instability of the American property market is the main point from the interview.

[payingonlyencouragesthem]

There will be rises in loans and mortgages in the UK due to the instability of the American property market is the main point from the interview.

 

Some banks are clearly using this to make a wholly unfair cash grab. Definitely try the FOS route.

[The Phantom]

OK, Picture says "Financial Markets are in an unusually unstable state"

However, The Phantom says you greedy cockroaches have already raised interest rates happily in line with BoE this year and now to jump it an extra few percentage points on top of that again to make their rate almost double the BoE is not on.

They however invite you to phone them if this causes any difficulties (why would it cause anybody any difficulties ? We just do a nightshift in the loft printing some more money..hey presto. Problem..What problem ??) , so when you do phone them they will offer you to stretch the loan again, (no doubt) to bring payments down but at the same time tying you in even longer

So if you pay their extortionate rate they win, and if you can't and they tie you in even longer they also win. A complete outrage

[chickpea]

I don't think you will have any problems getting the money back in respect of the no claims PPI refund unless missed payments become an issue.

 

Just out of interest, do you realise that their PPI is only for a 5 year term so if you have a longer term loan, you won't be covered after the first 5 years? When we took out the PPI, Picture gave us the impression that the PPI ran for the full term of the loan so we have now taken this up with the FO now.

 

For a 5 year plan, the PPI is b****y expensive especially considering you have paid this premium up front and are paying interest throughout the whole term of the loan. It amounts to daylight robbery in my opinion.

[The Phantom]

Yes, I knew it was only for five years, but only because I asked at the time.

It appeared all a bit strange that you would get all this money back over five years so we asked about it.

(As far as I can remember it didn't actually say that, we had to ask.)

You are correct to say the PPI is very expensive to say the least but we were given the impression at the time that the PPI was compulsory if we wanted the loan.

Once their cover has lapsed in two years we will incorporate it into our Payment Protection Insurance for the mortgage which we have going.

[gizmo111]

You are correct to say the PPI is very expensive to say the least but we were given the impression at the time that the PPI was compulsory if we wanted the loan

 

In which case it is my understanding that the PPI was mis sold. HAve a good read of the PPI forums.

[The Phantom]

Will do, would it not be too late though to make a claim or complain about it now - almost three years on ?

[chickpea]

Totally agree with Gizmo that if you were given the impression that the PPI was compulsory then it was mis-sold.

 

Definitely read up about the PPI because chances are you could recover all the PPI money back.

[chickpea]

If the policy was mis-sold then no, it isn't too late.

[The Phantom]

Many Thanks !

[The Phantom]

Ref the interest rise, was thinking to send them something like this

 

Dear XXX

 

We are in receipt of your above letter dated 31.08.07 advising us of a jump of our interest rate to 10.34% which is almost double the Bank of England’s base rate.

 

We would like to point out that you already raised your interest rates in line with the Bank of England a number of times this year.

As the bank of England has so far not announced further rises past the 5.75% your latest increase to over 10% is obviously unrelated to this.

 

As you claim this is due to “a currently unusually unstable financial market” we are sure you will be happy to demonstrate the need for a further rise to almost double the base rate with a complete and transparent breakdown of your costs to show the need for passing this on to your customers.

 

At this level of interest and with such an enormous increase we believe there is an utmost need for complete transparency now.

 

Unless we receive such a transparent explanation we will consider the rise excessive and not a true reflection of your own costs as stated in your letter (considering the base rate is virtually half your own rate)

 

Please note we reserve the right to take the matter to the Financial Ombudsman for verification with relating complaints to the OFT and the FSA should your explanation prove to be unsatisfactory and lead us to believe that the interest charges are excessive, unjust and undue.

 

 

Or something like this

Sound OK ?:?

[gizmo111]

Letter sound OK, just I am not sure what you will get from it. What does it say on your original contract about increasing rates - are they triggered by anything or just as they see fit?

[The Phantom]

It says in the agreement they may vary the interest rate from time to time when a change occurs.

 

The thing is, they have already "varied" the rate upwards when a change in base rate through the BoE occured ( five or six times now ? I lost track)

 

So they are not really saying what specific change has occured now to jump the rate to almost double the base rate, just some "unusally unstable financial markets"... hmmmm

To be honest if they jumped the rate to 50% next month due to unstable financial markets in North America and repeated hurricanes in Central America I would also complain, but I would probably then not be the only one.

You get my drift. It appears to be profiteering and the least one can do is to complain rather than to just accept it.

 

I think I mentioned it above, but someone told me their lender increased their rate to 22.5% on a loan with the same explanation (financial markets, unstable etc)....come on....