Welcome Finance Settlement Figure

[The cobbett slayer]

3 years ago I took out a secured loan with Welcome (against my better judgement but it was necessary at the time).

 

I borrowed £10000 over 10 years and am now in a position to settle the loan - at least, I thought I was.

 

I have just received a settlement figure from them and having repaid them £12,001 over 3 years, the settlement they require is a staggering £14,400. Incidentally, this is £1000 MORE than the settlement figure they quoted me 2 years ago.

 

I don't think I want to pay them that much but before I go in guns blazing, does anyone have any thoughts on how I should approach it?

[Parkvale]

Have you requested a statement of your account ? I am guessing your loan rate was variable and has gone up in line with interest rates. Send them an SAR at least that way you are going to find out where all these "extras came from. Good luck . They obviously don't know who they are dealing with.

[tembo]

Have you been in arrears with them?

 

Also, did you take out "optional" insurances with them and did they charge you for Indemnity insurance too? These are both points that you could potentially challenge.

 

Send them a SAR with your £10 fee and you will find out exactly what they are charging for. My friend recently sent an SAR to Welcome and they responded surprisingly quickly.

[The cobbett slayer]

They obviously don't know who they are dealing with.

 

Ain't that the truth:D

 

I've got a full breakdown of the settlement figure and the biggest issue is that they only want to refund £6000 of interest out of the original £24000 added to the original loan, in spite of the fact there is still 7 years of the original 10 to go.

 

As for arrears, there was one month when I took a payment holiday after the PPI refused to pay out when I was long term sick because it was a recurrence of a condition I had received treatment for 9 years previously. That amount was brought up to date the following month.

 

I've decided to take the direct approach with them as I need to sort it out so I can complete my mortgage. This is holding everyone up at the moment. I've sent them a nice letter, with copies to their Compliance Department and to Trading Standards.

 

 

Welcome Finance

XXXXXXX

XXXXXXX

XXXXXX

XXXXX

 

 

 

Dear Sirs

 

Agreement Number XXXXXXXXX

 

I refer to your Settlement Statement dated 14th June 2007 and frankly I am staggered by the amount you seem to think you are entitled to.

 

The loan has been in existence for 3 years and in that time I have paid £12,001.88 in repayment of a loan of £10,000 and you are now quoting a settlement figure of £14,400.69. This figure is actually £1000 higher than was quoted on 31st May 2005, in spite of a further £8000 in repayments.

 

I did think at first that this was an administrative error on your part but simple and brief research makes it clear that this is not the case and extortion of this nature is standard business practice for Welcome Finance (extortion – an excessive or exorbitant charge. (Oxford English Dictionary)).

 

For comparison, a loan of £10,000 over 3 years with Bank of Scotland would have a total repayment of £10,934. With GE Money, that figure would be £10,972 and even a high risk lender such as Norton Finance would only charge £11,682. Welcome Finance - £26002.57. Extortion is a very mild word really.

 

I am prepared to make a payment of £2000 in settlement of this loan, making a total repayment of £14,001.88. This amount is significantly higher than I would have made to any other lender I have been able to obtain figures from at this time and I would therefore consider it reasonable.

 

Copies of this letter have been sent to your Compliance Department and to Trading Standards. Please confirm your acceptance of this offer in writing to my solicitors:

 

XXXXXXXXX

XXXXXXX

XXXXXX

XXXXXX

 

Upon receipt of your acceptance, cleared funds will be sent not later than 1st July 2007 .

 

Yours faithfully

 

 

The Cobbett Slayer

 

That will be on the managers desk in the morning so we'll see what happens next.

[tembo]

Go get 'em!

 

There are some very dubious methods of calculating settlements for some of these loans. I am looking at my friend's loan with Hurstanger which was for £3500 over 25 years. As it happens he is in arrears and has incurred a lot of charges, but even if he had made all the payments correctly the redemption figure right now (after 3.5 years) would be over £4700.

 

I believe the rebate figure is calculated in line with the 1983 repayment regulations of the 1974 Consumer Credit Act. If you can understand the calculation of this you're a better man (or woman) than me.

[mcfadwmc]

i am currently contesting the same issue with them. i think your main problem is with the single payment premium PPI, healthcar and others applied at the start of the loan.

 

My circumstances are below

 

borrowed 3000

PPI 879

healthcare 200

other 350

total 4449

 

then you start paying interest at 50% on the full amount. i made payments for 8 months out of a 18 month loan and still had to pay them settlement of 4000.

 

i'm going for the ppi, healthcare, other and interest applied to them at their rate of 50%.

[goodluva]

i am in a similar situation my loan for a car was £9,799 + total insurances including ppi of £4,185.11 intrest charged at 23.5%

i have paid £466.63 monthly over 16 months = £5,327.52

out of the 48 month period and i am now in a position to pay off the loan, but they quoted me £12,090 settlement fee?

 

It beggars belief they can get away with these sorts of charges, but i will follow your lead and send a letter to the head office and offer them a reasonable fee..

 

can you keep us up to date with your progress, that would be greatly appreciated..

[The cobbett slayer]

I'll certainly keep the thread updated. So far I've heard nothing but it's only been 2 days since they would have got the letter so that's not really surprising.

 

Maybe Admin could give us a Welcome Finance sub forum as this looks like it's going to be a fair sized issue.

[goodluva]

If Admin could create a sub forum, that would be great, cos i think it's not so common for people to want to settle early especially when the figures you're hit with are so morally bankrupt.

[goodluva]

i have been looking at the early settlemt section of the The Consumer Credit (Early Settlement) Regulations 2004

 

and there are some quite clear examples of how the settlement figures should be calculated.

 

it would appear that welcome finace must have developed their own in order to come up with the figures they presented to me.

I wonder if this could be any angle to bring them to book with.

 

for instance with a £10,000 loan and settlement after one year, according to the formula specified in the regulations you'd only pay back £14,927.57 !!! taking into account monies already paid

[The cobbett slayer]

Thanks for that Goodluva.

 

I've had a brief look at it and it has to be said that algebra isn't my strong point so I'm going to have a look at it in more detail when I have time and see what I can work out.

 

At the moment Welcome Finance are standing firm and refusing to even negotiate. I'm looking in more detail at the UTCCA but at the moment they are holding me to ransom!

[goodluva]

keep at em corbett

 

I was also reading elsewhere that due to the current climate of bad debt and such, authorities have said that the use of rule 78 to calculate early settlments shouldnot be used, because this restricts peoples abilities to lift themselves out of debt, therefore courts will look unfavourably on anyone (ab)using rule 78.

 

Mabye the moderators will have a little more information on Rule 78

 

But we will at least be able to argue the charges claimed for early settlements are unfair.

I personally will be going for this once i have recived my details from welcome.

[The cobbett slayer]

I have some information from my solicitor that might be useful to anyone who has a secured loan with Welcome.

 

I will share that information once my mortgage is completed - as we know, big brother is watching but what I know now puts any Welcome secured loan customer in a very strong position.

 

Bear with me for the next few days and I'll tell you.

[goodluva]

would this also effect hp car loans?

[jessyireland]

I was about to take out a £5000 loan with Welcome. Im seriously thinking against it now!

[goodluva]

i would seek advice from some of the people on here who have had the experience of loans, i took hp for a car which I gather is sligtly different, but the outcome is always the same you end up out of pocket

[maybelline]

I have some information from my solicitor that might be useful to anyone who has a secured loan with Welcome.

 

I will share that information once my mortgage is completed - as we know, big brother is watching but what I know now puts any Welcome secured loan customer in a very strong position.

 

Bear with me for the next few days and I'll tell you.

 

 

I for one would be interested as I have a judge looking at my claim in the next few days, it is secured but have only applied for penalty fees at the moment, I have already worked out the agreement is unenforceable, has sky high insurances and fees I never asked for and is still, ten years on, never gone down, in fact seems to have increased? they have really messed my life up, I wish they would be dealt with by the authorities!

[maybelline]

and whats worrying is how they prevent folk from getting away from them! it s daylight robbery!

[chancer1]

I have some information from my solicitor that might be useful to anyone who has a secured loan with Welcome.

 

I will share that information once my mortgage is completed - as we know, big brother is watching but what I know now puts any Welcome secured loan customer in a very strong position.

 

Bear with me for the next few days and I'll tell you.

 

 

Please tell......

 

I too took out a secured loan with WF for £5000 & ins £7200 in ... 2002 I have paid £7564 to date and they want a further £8100 to settle, I sold the property the secured loan was supposed to be against in 2004, my solicitor advised me I didn't have to pay the loan off as there was no 2nd charge on the property, I have paid most of time and made up some back payments until February this year, I advised them that I would not be making any further payments until a reasonable settle figure could be obtained, I have requested my cca (delivered to them today) but the problem is, I am right in the middle of a mortgage application and they want evidence that the loan is not secured - it's not enough that I don't live there any more or I don't own a property, they want proof that this is not a mortgage, because it appears on my credit file as a mortgage.

 

So any help appreciated please

[maybelline]

curious, I will have do some more checking, are their secured loans secure or not?

[The cobbett slayer]

I was about to take out a £5000 loan with Welcome. Im seriously thinking against it now!

 

Sorry for not seeing this earlier - had my feet up in Spain:D If you ever get the chance to go to the Guggenheim Museum in Bilbao do it.

 

Back to topic, my advice would be not to take out a loan with Welcome unless you have absolutely no other options. I have just had a letter back from them which in a nutshell says "we've looked at your complaint, sod off, hope you are happy with the way this has been dealt with."

 

I'm not and I will be taking it to the FOS.

 

With regard to security, Welcome appear to register a Unilateral Notice with the Land Registry. My understanding of this, and I stress IT IS MY UNDERSTANDING AND YOU SHOULD CHECK THIS WITH YOUR OWN SOLICITOR is that an interest is noted on the property deeds and in the event of the "secured" property being sold, it acts as a warning to the purchaser that there is a "security".

 

Under the Land Registration Act 1925, this was known as a caution. When the Act was amended in 2002, cautions were replaced by notices but the effect is still the same. As far as I am able to ascertain, Welcome cannot reposess your house, but they can claim their money in the event of the first charge being reposessed.

 

For anyone in this position, I stress again - CHECK THIS BEFORE YOU GO TOO FAR! I'M NOT A SOLICITOR AND I ACCEPT NO LIABILITY FOR PASSING ON WHAT I HAVE BEEN TOLD.

[maybelline]

interesting, thanks, so can they prevent you from remortgaging if you are in dispute about a so called secured loan that is unenforceable, is it necessary to go into court to have it declared unenforceable by a judge before can remortgage, (first mortgage is not with them)??

[The cobbett slayer]

interesting, thanks, so can they prevent you from remortgaging if you are in dispute about a so called secured loan that is unenforceable, is it necessary to go into court to have it declared unenforceable by a judge before can remortgage, (first mortgage is not with them)??

 

That would depend on the attitude of the primary lender.

 

As there is no actual security on the property in regard to the Welcome loan, my personal position is that my primary lender are happy to proceed with the mortgage as Welcome will always have second charge.

 

If Welcome have actually registered a charge (rather than a Notice), you will need to request a Deed of Postponement. This is a legal deed that ensures that the primary lender has first charge over the property and Welcome could not reposess without the consent of the primary lender. Welcome charge £75+VAT for the deed. A unilateral notice cannot be postponed so the deed is unnecessary.

[maybelline]

so if unilateral and I approach another lender surely they will discover any notice and then the need for the deed but I have never given my mortgage account details or deed or anything to welcome.

[The cobbett slayer]

A Unilateral Notice cannot be postponed and don't let Welcome tell you otherwise.

 

The Unilateral Notice is purely cautionary to anyone else who may have a financial interest in the property. If there is sufficient capital in the property to meet the registered notice, a primary lender shouldn't have a problem with it.