Settlement offer advice

[Super Daz]

I have been trying to reach an agreement with a Payday Loan company for about 10 months now & have a complaint with the FOS ongoing with them.

 

I am dealing with a DCA & not the original loan company although the original loan company still own the debt as far as I can tell.

 

The original loan was for £300 (£375 with interest). I ended up rolling it over for about 10 months so have paid £750 more or less but the loan still stood at £300 (I was only paying interest).

 

The loan company wanted over £600 to clear the account but I told them that was too much - they are now saying they will accept £400 as full & final. I still feel this is too much. I told them this & they have said ok well make us an offer.

 

I just wanted some advice/opinions as to what I should offer now.

[Welshy27]

I think it's irrelevant to a debt collection agency if you rolled over a loan numerous times with the original pay day loan company. I would say you should still be required to pay back the original loan and one months interest (£375) so their offer of £400 can surely be reduced by £375 if you made them this offer which I'm guessing they would accept?

[Super Daz]

The debt collection agency don't own the debt - the original PDL company still does.

[Bombaymix]

So the dca are just collecting the debt on the payday loan company's behalf?

 

Which pdl company and which dca please?

 

Unfortunately when you rolled over for 10 months you were simply paying to keep the payday loan company off your back for a month. I'd say forget about those 10 rollover payments and try and concentrate on getting the settlement figure somewhere near the amount you borrowed plus 1 months interest.

 

I had a loan with payday express a few years ago... Paid them £100 a month in rollover charges for the best part of 24 months... Still owed them £500 (£400 + £100 interest) when I defaulted.

[Super Daz]

Surely this shouldnt be allowed to happen - the money you have paid so far should be considered when making an offer to them.

The PDL is Money Shop & the DCA is Empingham (who to be fair have been 100 times more helpful than The Money Shop ever were).

[Welshy27]

Ultimately it is the person's choice if they want to keep rolling over their loan so as Bombay said to keep the pay day people off your back for at least a month. It's perfectly understandable as to why the roll over interest isn't partly deducted from the original amount and thus I can appreciate why any DCA wouldn't consider any roll over payments to be deemed as contributing to the original amount due. If you can bring them down by £25 on their offer to £375 then you would be paying what you legally owe. If they are awaiting your offer you could always try your luck to make an offer of say £300 and if they decline then work your way up to no more than £375.

[PDLVictim]

Hi SuperDaz,

 

I would start offering them 40% of what they want, this is IMO a reasonable offer. So if they want 600 GBP, offer them 40% = 240 GBP in full and final settlement. Make clear in your offer that you :

1) Have been a long-term customer who always paid back on time

2) Are unexpectedly in financial difficulties which will not change in the foreseeable future

 

There is a good chance they will agree as it will be much cheaper for them to take the 240 GBP and write off the rest, than chasing you for the rest of their life...

[Super Daz]

OK this hasn't gone well. Below is the series of emails (looks like its back to the FOS for me):-

 

Me:-

After reviewing the figures in the statement I believe that The Money Shop are trying to charge me way too much to settle this outstanding debt. I've already paid several times more than the initial cost of the loan & I think that asking for an extra £600+ is just wrong.

Could you please ask if The Money Shop could review this figure & get back to me with a more realistic sum. Please also indicate whether this is their full & final offer.

 

Emp:

Sorry for later reply, we offer you full and final offer £400 to clear this account, this offer available till 30/11/12. Please let me know.

 

Me:-

Thanks for the offer, however I still feel that is too much considering how much I've already paid.

I am happy to receive any revised offer however & I'm glad that we seem to be finally moving in the right direction regarding getting this resolved.

 

Emp:

Would you like to make a full and final offer to close this account? I can always ask the question to Moneyshop. It will be their decision to accept the offer or not.

 

Me:

I will have a think about what I consider a fair offer and get back to you. Whatever I end up paying I will most likely not be able to pay it all in one lump sum and so would need to pay over a few months. Would this cause a problem?

 

Emp:

I can offer F&F £400 to clear over 4 instalments. Please let me know.

 

Me:

I'm prepared to pay £300 over 6 monthly installments (Starting December) if you can arrange that for me.

 

Emp:

We can't do £300 over 6 months. As I mentioned, will be able to settle for £400 over 4 instalments.

 

Me:

I can't afford any more than £50 a month. Would you settle for £350 over 7 months?

 

Emp:

Final offer will be £400 over 5 months to clear- that’s £80 month. Let me know.

 

Me:

I really can't afford more than £50 a month. Even this amount will be a struggle.

 

Emp:

Please complete attached Income and Expenditure and return to me , I will go to client to see if they accept £50 for 6 months as full and final .

 

Me:

Please find attached my I & E form.

 

Emp:

I have a reply from client, they are offering full and final £376.45 or £50 month to clear full balance. This is the final offer for you to decide. Let me know.

 

Me:

Is that full balance (£50 a month) £400?

 

Emp:

Full balance is £627.42.

 

Me:

Sorry but £627 is way too much and I can't afford £376 all at once.

 

Emp:

I can’t offer any further assistance on this matter, we will accept £50 month to clear full balance. Full debt recovery commence from today if no agreement reached.

[Welshy27]

It is a pitty you can't take up their offer of £400 over 5 months for £80 a month. As I mentioned before this seems a reasonable settlement offer regardless of your roll overs and the original due amount of £375. I assume the extra £25 is the default fee. Is there no way you can find £30 so you can pay £80 each month? I agree you shouldn't pay back £600.

[Super Daz]

I could possibly start to pay that amount in a couple of months time when a couple of my other debts will have cleared but not right now.

[Jamie Kingston]

so why not offer them something small for two months and the larger payment thereafter - but only offer what you can stick to.