Bad Advice / Plan Management by PayPlan?

[Wilko58]

I'm writing this for my son as he's not very good at putting things in words.

 

He took out a £10000 loan a couple of years ago (not sure how as he 's an agency worker and his income fluctuates) but circumstances changed and he got into debt.

 

He tried to sort it out himself and ended up with a Debt Management Plan with PayPlan which began in November 2021. He had four debts:

 

Credit Security - £2102.92

PRA Barclays - £1410.28 (Overdraft I think)

PRA Purchased Accounts - £455.09

Clydesdale - £4244.07

 

I only thought about asking on here today and probably should have asked last week as I have just settled the top three accounts for him - at the balances shown whereas I'm guesing had I asked first I would have been advised not to!

 

The issues he has now is that PayPlan are advising him that he owes Clydesdale around £3100 whereas Clydesdale confirm that it is £4244.07 - why? 

 

He has also just discovered that CRAs are showing the account as defaulted but not sure whether that is because he has or if it's because PayPlan are only paying Clydesdale 7 days after the monthly payment is due. 

 

Although he was eventually told by PayPlan that they can't force banks to freeze the interest; Clydesdale didn't freeze the interest but he wasn't aware of the rate being applied or how that was effecting his payments

 

only 2 weeks ago realised that he owed £4244.07 and not £3100 (Clydesdale gave PayPlan a statement in August of how much was owed but they were still telling him the lower figure) and that his monthly payment was effectively £65 interest and £35 debt meaning it would be quite a long while before being paid off!

 

One, is there anything he can do and should he (we) still pay it off?

 

Many thanks,

 

[unclebulgaria67]

Irresponsible lending ?

 

When he borrowed £10k, how long had he been working , what was his average monthly employment pay and what were his existing monthly outgoings ( rent, other loan payments etc).

 

Why did he borrow £10k ?  To buy a car ?

 

Suggest that an SAR is sent to Clydesdale.

 

Payplan are about as useful as a chocolate fireguard.

 

Would suggest ending the arrangement.  And dealing with this yourselves. 

 

Clydesdale can report on the credit records that the loan is not being paid as originally arranged. 

 

 

[dx100uk]

1st dump payplan now. Stop paying

Do things yourself.

 

How long ago did you pay those other scam debts off?

You say a week?

How did you do it

By a debit card from your bank account to the debt collectors/buyers pra etc?

 

Dx

[Wilko58]

Thanks for the replies.

 

He's been an agency worker for years but had a habit of binning a job if they start taking advantage or messing him about but he used to do it  before he had another job to go to (doesn't anymore and now in full time employment).  

 

I don't know what he said on his application but he took it out for a new kitchen/bathroom (he'd ripped the old kitchen out 4 years previously when his mum died but being in a bad place he spent the money intended for the kitchen on other things).

 

He also thought he could pay it off as he had a friend lodging with him after his marriage broke up but it wasn't long before he found someone new and moved out (my son should have realised it wouldn't have been long term but he saw it as a way out of living in a mess of a kitchen). 

 

Bank of Dad paid off the debts last week but through PayPlan (by BT) - with hindsight we probably should have contacted them directly and they may have taken a smaller sum.

 

I was going to pay Clydesdale as well but wanted to hear what PayPlan had to say about the reporting discrepancy just in case he doesn't actually owe what Clydesdale have said (i.e. they maybe should have frozen the interest when the plan started); interest has only been frozen since my son contacted them directly. 

 

Should we just pay the amount Clydesdale say he owes now (directly and not through PayPlan) and hopefully get a partial refund if somebody has messed up (wishful thinking?) later or wait until PayPlan have reported back? 

 

Should he make a complaint to PayPlan about how this has been handled (lack of regular reports, no information about the rate/amount of interest being paid to Clydesdale, incorrect reporting of the amount owed) or is it not worth it? 

 

Now that Clydesdale have frozen the interest, I guess the only reason to pay it off now is to clear my son's debt and get his credit file clean sooner - is that correct?

 

Thanks

 

@unclebulgariaplease can you say why you are suggesting he sends a SAR to Clydesdale?  Thanks

Edited September 6, 2022 by Wilko58
Added how I paid the loans off

[dx100uk]

Who's told you paying his debt off his debts gets his file clear sooner? Wrong!

 

Once a debt is defaulted, that being the original creditors write sending a default notice giving 14 days to pay £xxx, that default is there for 6yrs, regardless to the debt being paid or not or paid off or not.

 

The default and the whole account is removed on the defaulted dates 6th b'day regardless too.

 

Pers , if it's a lot of money bank of dad paid off, I would be contacting his bank and do a chargeback, getting the money back. You've been had 

 

Sadly this is typical of these debt management providers, cause they get a % of the sum and a backhander too 

 

Dx

 

 

[Wilko58]

@dx100ukapoologies, I badly worded that about clearing his file; what I meant was that it will show on his credit file as being settled which gives him a better credit score albeit it will still be on record for 6 years - have I got that right?

 

The amounts I paid to PayPlan are in the first post but for ease of reference:

 

Credit Security - £2102.92 (Halifax CC)

PRA Barclays - £1410.28 (Barclays CC)

PRA Purchased Accounts - £455.09 (Halifax Overdraft)

 

I think I understand why you are advising that I should try and get that money back, bin the agreement with PayPlan and then discuss settlements with Credit Security and PRA but I think I'm too late as PayPlan have already settled the debts with Credit Security and PRA and I'm not sure the bank would let me make chargeback anyway; what reason could I use?

 

The reason I "lent" him the money to pay off the debts is mainly to get rid of the massive interest on the Clydesdale loan (PayPlan didn't help with Clydesdale at all and having read some posts on here now I know why - the loan is still with the bank and PayPlan aren't getting anything out of it!) - he is paying me back and it will be far quicker than using PayPlan.  Clydesdale have just agreed to freeze the interest so I've asked my son to ask them how long for and can he go back to paying them directly (then I don't have to lend him the money).

 

Luckily I've never been in debt so new to all this and still learning the terminology. 

 

Many thanks

 

Just had an update from Clydesdale; the interest he has been paying is just the interest that was agreed when the loan was taken out. The loan end date is May 2023 and it is estimated the outstanding amount will be around £3500 and Clydesdale would then review this with PayPlan (which I guess is when they will start making money off it!).

 

I've decided that to pay this off before it gets to the point that PayPlan or anyone else gets involved.

 

I can't see me being able to get PayPlan to un-pay the loans already settled or my bank agreeing to a chargeback so I will mark the experience with PayPlan as a lesson learned.

 

Thanks @dx100uk and @unclebulgaria67 for your advice, just wish I'd asked for it earlier. 

[dx100uk]

PP wont argue, the bank would do a chargeback yes, you simply explain that you got railroaded by listening to a useless debt advisor and now realise you need to deal directly with the original creditors.

 

your call.

[Wilko58]

Cheers.

 

Thanks for the advice but I'm playing piggy in the middle between my son and creditors and it's giving me a headache so I'm going to bite the bullet and be done with it. 

 

He's going to be able to pay back what I've lent him in about 18 months which is way sooner than he'd ever hoped to achieve with PayPlan;

 

like you've said they are useless and now I know they are a con!. 

[dx100uk]

sure, saves him interest too.

 

is his credit file shot?

[Wilko58]

Yes, it's his credit file which made him do some research as the ones which had been passed on were showing one thing (can't remember the term)

 

the Clydesdale was showing as default since the DMP was started and reported as owing £1000 more than what PayPlan was telling him. 

 

At least that will now show as settled, as should the others. 

[dx100uk]

you could have negotiated the removal of the debts from the CRA if things are paid off in total. esp if a DCA owns the debt.

 

have clydesdale actually issued a default notice under section 87 of the consumer credit act? ie does the debt show a defaulted date dd/mm/yyy in the debt summary,

 

not just a D in the calendar section..... only the debt owner and him can see the calendar section not future lenders.

[Wilko58]

When you say "could have negotiated" does that mean it's now to late?  Who do you negotiate with i.e. TransUnion - he uses Clearscore?

 

I've just confirmed with him that Clydesdale is actually showing as "In Arrears" and the others (DCAs) all reported "In Default" with the amount in arrears/owed.  He's had one letter from Clydesdale which says Notice of Sums in Arrears under the Consumer Credit Act 1974. He has never stopped paying them, just not the agreed total monthly amount and always the agreed interest amount.

 

I've no idea what all this means so thanks for your help again.

 

 

 

[dx100uk]

aha all making more sense now.

 

notice of sums in arrears is simply a notice a creditor must send if they wish to levy penalty charges (£12 fixed sun fees for being late or over time etc) those are unlawful penalty fees and can be reclaimed/removed.

 

when you paid the sums off the other 2 debts, you should have done that directly to the DCA not fleecing Payplan.

typically a DCA will often be willing to totally remove an account from CRA files if they get free money they might never have ever gotten. 

 

they buy debts on the hope that people think they are BAILIFFS , and wet themselves and cough up after a few threat-o-grams. sadly 99% of people think a DCa IS a BAILIFF , they are NOT. they are totally powerless!! sending them a CCA request to check they LEGALLY hold all the required paperwork to enforce a debt, often sees them off! why do you think the original creditor sold a debt on for 10p=£1, when they could have taken the debtor to court and crushed them...urm..i wonder. dca's then scam the debtor for the full value not what they PAID FOR IT!!

 

dx

 

 

 

[Wilko58]

Makes more sense to me now to! We did think of going direct but we stupidly thought that going via PayPlan would have helped. I'm presuming by free money you mean the extra they would have got if PayPlan hadn't got it?

 

 

 

[dx100uk]

no .....what you paid the DCA's that own those debts was all free money.

it went straight in their pockets for down the pub or to pay for staff family holidays .

 

the original creditors never see any of it.

[Wilko58]

@dx100uk thanks for your previous advice,

 

just a quick question on how PayPlan operates if I may? 

 

In my son's case, as outlined above, he had four debts, one with a bank and the others with DCAs,

 

he could pay about £250 a month to PayPlan £200; how do they allocate the funds,

 

is it a straight 25% each or can PayPlan negotiate a specific sum per debt owed?

 

  The reason I ask is that the main bulk of his debt were to the bank and I'm presuming that as PayPlan didn't really negotiate anything then they don't get a commission or backhander from them and therefore it isn't in their interest to pay more than they need to (until of course the bank sells the debt on);

 

is that correct? 

 

Many thanks   

[dx100uk]

They are funded by all banks and DCA debt owners regardless.

 

Dump them, forget them 

 

Dx

[Wilko58]

We have dumped them (thanks to you), but there was an issue with the bank debt in that PayPlan were reporting the debt as £1000 less than it was and they were only paying a minimum amount to them whereas I would have thought that the biggest debt and biggest interest would have had the bulk, of what he could pay, paid to that debt first or does it not work like that?

 

By the way, I contacted PRA to ask if they were willing to totally remove an account from CRA files and they replied "We do need to report on the credit file for 6yr after the original default date. This will show as a balance of £0.00 for each account for the remainder of the 6yr."  One of the accounts though only defaulted in February 2022, 4 or 5 months after PayPlan were engaged; did they cause the default because they missed a payment date or did the debt owner decide to sell it on at that point?

[dx100uk]

The OC will always default a debt upon sale if not already defaulted.

 

Don't worry about old bank accounts, just let them run. We will have all the details from an SAR each in the future.  But as I've said 9/10 made of bogus fees etc, we can argue defaulted dates later 

 

Probably pp saw this and only offered low £'s 

 

Dx

[Wilko58]

Many thanks Dx