Lots of interest added by Creation for years on DMP

[MrBill09]

Hi all,

 

Just wondered whether anyone could provide any comments on a situation we're having with Creation Finance. We've been paying them a reduced payment on a DMP for a few years and whilst we don't get much hassle off any of our creditors any more, I actually read some standard post from them the other day. Looking at the recent Creation statement (was an Adams store card), we're paying £20.10 per month (and have been for nearly three years), but each month they charge £14.88 in interest, meaning it's only reducing by £5.22 each month (with appriox £3k on the account, barring a massive change in circumstances, I think we'll be paying this for a very looooong time!!!)

 

Can anyone think of a way of getting the interest stopped?

 

They're a lender, so hey, it's no surprise they want to charge interest, but bearing in mind we haven't used the card for years and they know we're in difficulty, presumably there should really come a point where they say "ok, we've added lots of default fees etc and charged interest for 3 years AFTER they were on a DMP, lets call it a day with the interest and just let them repay the current balance"

 

Any ideas?

 

I've scanned and edited the most recent statement if that would help?

 

Cheers

 

Bill

[Undercover-Elsa]

Hello MrBill!

Dear me, they have had their pound of flesh out of you haven't they?

 

I'd be ever so slightly tempted to send off a request for the credit agreement for this account, if you've not done so already, to see whether they have a right to charge this interest and indeed whether they can even produce an enforceable agreement.

Have a read of my blog, linked below, which explains the process, with a link to the template letter.

Is this a self managed DMP, if not which company is running it?

 

kind regards,

 

Elsa x

[MrBill09]

Thanks for the reply Elsa, asking for a CCA is what my plan has been, but then I keep reading very contradictory posts and articles about how effective that is at this point in time (from what I understand, requesting a CCA a few years back may have even led to the debt being written off if the creditor could not produce a sensible document, but due to recent court cases, this basically now means not much at all...?) Confused!

[Undercover-Elsa]

In your circumstances, it could mean the difference between them agreeing to stop interest or not. It puts you in a much stronger position to negotiate if they cannot complete the request. Up to you where you take it from there

[Undercover-Elsa]

Every case stands on it's own merit, and it's still one of your strongest negotiating weapons if they cannot comply..Carey et al didn't change that.

[Crocdoc]

This is one of the problems with DMP's, if you set them up with companies who charge fees then they have no icentive to try and stop interest as an arrangement with ongoing charges and interest creates a dripping roast. This in my opinion is why so many COWBOYS enter this industry as all you require is a Consumer Credit License. To create an example if a Debt Management Company has links to a Debt Collection Agent money can be made from both the creditor and the debtor. This being the case why would you want the payment arrangement to end.

 

Furthermore, there is nothing binding about these agreements, therfore DCA's or original creditors could accept payment over a long period and continue to add charges and interest, it is then possible to cancel the agreement, instigate court action and Bankrupt the debtor. This course of action would be financially beneficial to a creditor in a circumstance where the debtor ows property or assets. DEBT MANAGEMENT PROGRAMMES UNLIKE DEBT PAYMENT PROGRAMMES IN SCOTLAND DO NOTHING TO PROTECT ASSETS.

 

On the other hand, if the debtor HAS NO ASSETS, why would they pay a fee charging management company even if they are in a position to make reduced payments. In this circumstance the individual could make their own agreement and make it conditional that they will only consider such an option if all interest and charges are frozen. Should the creditor refuse make it clear that Bankruptcy is the contingency plan

I fully understand that the OFT has recently looked closely at this industry and taken action in some cases, but in my opinion there is along way to go if we are to avoid people who run into financial difficulty being run into the ground.

Edited October 12, 2011 by Crocdoc