CFO 'refinancing'

[Oh ffs]

Ok so back some time ago when I was desperate and probably not of sound mind I took out a loan with CFO, for £250. Interest was set at 39% fixed on the borrowing, so at the end of the month 1 I was due to repay £347.50.

 

At the end of month 1 I decided to 'rollover' the loan by paying the interest element only, thus paying £97.5. This means at the end of month 2 I would still need to pay £347.50 to clear the loan.

 

10 days later (and partly into month 2 now) CFO offered me an additional £175 which I (again) stupidly took, due to being in a desparate payday loan spiral. This meant I had borrowed a total of £250+£175 = £425. So as interest is set at 39% fixed I should be paying them back £590.75 at the end of the month 2 right? WRONG!!! (according to CFO).

 

What actually happened is they calculated from the £250 I initially borrowed and added on 39% interest to total £347.50 i.e. what I was due to pay back at the end of month 2.

To this they then added the £175 further borrowing = £522.50 and applied interest of 39% (£203.78), meaning according to them I now owe £726.28 at the end of month 2. So I've now incurred 39% interest on 39% from the first original loan too! Rather than simply borrow an additional amount with a separate contract, they've kindly 'refinanced' this into a new contract, much to their benefit of course.

 

At the end of month 2 I predictably decide to rollover the loan again, paying the interest only. I pay £203.78. This means at the end of month 3 I need to pay £726.28 to clear the loan.

 

Somewhat predictably again, the temptation for someone who is desperate and getting chased left, right and centre for other debts to borrow further is too much. CFO allow me to top up with another £90 midway through month 3. Can you guess what this means? Yes - they calculate it by adding what I owe at the end of month 3 and add on the further £90 borrowed. They then apply interest to this total.

 

So basically instead of paying 39% interest flat rate on £515 total borrowed, I'm paying 39% interest on £816.28. I now need to repay £1,134.63 at the end of month 3.

 

Quite honestly, I don't know why I fell for this. I made some very lousy decisions but it really highlights why I wasn't of sound mind. Ordinarily I am an intelligent person and I've only picked up on this because I was already disputing the balance CFO say I owe them.

 

I've formally complained to CFO, have told them I will be going to the OFT (and I will) with all of my records once I've had their final reply. Of course I expect a refund for what I've overpaid too and will be going to the Financial Ombudsman Service in 8 weeks time as I expect my complaint won't be resolved to my satisfaction.

 

I'm now in a DMP and aside from this creditor and Safeloans it's been a massive weight off my shoulders. My experience with Safeloans is that you can definitely fight back and stop paying what these companies are not entitled to.

 

Whilst they have pulled a fast one on me, where does this stand legally speaking - particularly if I wished to pursue a claim through the small claims court if this can't be resolved?

 

Has anyone had a similar experience with CFO or any thoughts of what I should do. The OFT is definitely going to be informed at the end of the week.