Do I have a regulated agreement or not?

[mike00]

Hi,

 

I've just read the OFT Document, "Consumer credit - regulated and exempt agreements".

 

It states:

 

3.4 The Act does not regulate:

• a debtor-creditor-supplier agreement for fixed-sum credit, under which the total number of repayments of credit does not exceed four, and those payments are required to be made within a period not exceeding 12 months beginning with the date of the agreement (for example, an annual gym membership payable in quarterly instalments)

My agreement with Safeloans is headed, "Fixed Sum Loan Agreement regulated by the Consumer Credit Act 1974". And contains:

Duration of Credit Agreement: 1 months

Amount of Credit: £200.00

Timing of repayments: The Total Amount Payable is to be repaid in 1 monthly instalments by debit card on

the payment dates show below:

 

 

Could somebody advise? Basically I need to know whether charges and interest beyond the original capital and interest are fair and enforceable?

[raydetinu]

The agreement must state the amount lent and the interest payable and the total to be paid back including interest.

It should also state the penalty for missed payments and late charges.

[mike00]

Hi,

 

raydetinu, it has all of those things:

 

APR 2365.00%. The APR is calculated on the assumption that you borrow the amount of credit shown above

and repay over 1 repayment instalments as shown below.

 

a) We will charge you the sum of £7.50 for each nonstatutory

arrears letter (to a maximum of 3 arrears letters);

b) We will charge you £7.50 for each Retain Card letter (when the bank stops your card payments with the

status "Retain Card")

c) You will be charged £12.00 each time payment is missed or unpaid on the scheduled due date(s);

d) You will be charged a fee of £30.00 if you fail to pay your account and the account is referred to a

Collections specialist

e) You must pay us any reasonable expenses and costs that we may incur in tracing you if you move address

without first notifying us;

f) In addition, you must pay us any reasonable expenses and costs we may incur in taking other steps to

enforce our rights against you under this credit agreement.

 

Interest for late payment: You will be charged default interest for the period you are in arrears at a rate of 1%

per day on any outstanding balance applying to this agreement from the date payment falls due until payment

is made.

 

I keep reading on CAG that PDL agreements aren't regulated; and they can't enforce the unfair interest and charges after the fixed term.

[renegadeimp]

PDL agreements are regulated under the Consumer Credit act.

 

Going by your last post mike,

 

a is unlawful and unenforceable

b is the same

c is the same

D is valid IF they class this as the default fee. If they don't, then again, unenforceable.

e is unlawful and unenforceable.

f is valid in a way. It depends on the "reasonable expenses and costs" and what they consider to be reasonable and what they attribute the costs to.

 

g is dodgy. Techincally they cannot charge it as it is not contracted interest and can be seen as a penalty charge. It can be seen as unjustly enriching themselves as well. However, to my knowledge, nobody has challenged it yet in court.

[mike00]

Thanks, renegadeimp. Your comments echo what I've read around here. I will be arguing against these charges and interest in court, and need help to better understand my position. What legislation makes them unlawful?

[renegadeimp]

I wouldnt argue against them in court, as a judge wont care or more so, have the time to delve into the depths of consumer law.

 

You need to be adamant right from the start that the charges are unlawful and amount to penalty charges. The PDL's already know this, but will still try and pressure you to give in and accept them.

[mike00]

I'm not sure what to do then, as the majority of the claim is interest and charges? More than double what I actually owe. Should I just quickly state that I think they're unfair/unlawful, move on, and hope the judge sides with me?

[renegadeimp]

Have you gotten a FULL breakdown of account, and demanded they explain what each charge was attributed to?

[mike00]

I'm in receipt of their lousy 'Statement of Account' which lists these simply as 'Charge' and 'Fee Interest'. Charges make up £281.50 including two charges for £75. 'Fee Interest' totals £64.

 

I guess it's time to fire off another SAR?

[renegadeimp]

You need to DEMAND a full and itemised breakdown of account and specifically request that they explain what each charge is attributed to and how they arrived at that amount. You do not need a sar for this as it is a basic legal right to have a full itemised statement of account for any financial product/loan you have.