Cap finance 1 PDL top up loan- interest con trick- Beware!!

[steve0012]

hi

 

i got a £305 payday loan out with capital finance one.

Then I got an email saying i have available credit available to top up the loan. so i took it , £75, this brings loan to £380. their interest rate is 39%.

 

so original loan = £305@ 1.39%= £423.95 due

top up loan £75 @ 1.39 = £104.25

 

however they are saying the amount due iS £693.54

 

I work out the amount due as £528.2 (£423.95 plus £104.25)

 

do i have a leg to stand on? i stupdily didn't read the top up contract as i was so desperate for the £75, didn't think payday loans can rip you off in this way.

 

can they duplicate interest on the £305 all within the same month? i am going to offer to pay £528.20 only!!

 

their reply is below

 

This is the way a refinance works and we have been transparent and informed you of how much you had to repay. Had you any questions or queries you could have contacted us and we would have assisted you. You also had a period of 14 day to cancel the refinance.

Furthermore you agreed to pay back the loan amount when you electronically signed your contract.

[renegadeimp]

Did they lay out all interest charges clearly when you got the top up?

[Ell-enn]

There are other reported instances on here of exactly the same thing - when CF1 do this it alters their published APR. Make a formal written complaint - be careful re your bank account, they will take what they want from it unless you cancel your card. Who do you bank with ?

[steve0012]

Having a look at the pdf copy of the contract (part shown below) . oringal loan £305 took out on 21 march. top up £75 on 27 march. amount due on 21 april £693.54

 

madness, but my own fault as what the contract says "goes". so you reckon i should pay £693.54 and put it down as lesson learnt?

 

 

 

 

Amount of Credit:

£498.95

Duration of Agreement: 24 days

 

Total Amount Payable:

£693.54 to be repaid in a single payment on the 20/04/2012 (the "Payment Date")

APR: 14914.3%

 

Due Date: 20/04/2012

 

Percentage: 39%

Other Financial Information

Total Charge For Credit:

£194.59

Interest is charged at the rate of 39%, pre-computed and applied to the balance outstanding on the date of this Agreement.

[Ell-enn]

So the interest should be calculated on £375 - not £305 + interest + £75 + interest again. The APR is not 39% per month if they do that

[steve0012]

my wages go into my savings out, online i would transfer it 12.01 to my current if i was to pay the loan.

 

theres a preiod between 12am and 1am/ 2am ish that allows this, they are ripping me off by £160 but what do i do. dont pay it and the dispute will go on for months and months and the £160 grows to £500... dont think i need the grief to be honest...

[Ell-enn]

Well to be honest I wouldn't pay what they want. You could pay what you think is the right amount and then report them to the OFT for trying to get money they aren't entitled to - the OFT are investigating them at the moment along with quite a few other payday loan companies.

 

I think we have CFO's bank acount details on the forum - that way you could pay direct to them. Do you have an overdraft facility on your current account? Who do you bank with ?

[steve0012]

thanks for the help, much appreciated, i have no overdraft facility, i bank with barclays.

[Ell-enn]

OK, If I were you I'd write a letter to your bank telling them not to make any payments to CF1 - they have to follow your instructions. Affixed is the letter we recommend, it's best to actually hand it into your branch, if you can't do that you need to send it to them by special delivery so they have to sign for it.

 

Do you have any bills paid by DD's out of the current account - remember that CF1 will keep trying to get the money.

Letter to bank to stop PDL payments.doc