Welcome Finance Settlement Figure

[The cobbett slayer]

Based on a conversation I had with the "Senior Branch Manager" (do they have Junior Branch Managers?), it would appear that WF add the interest to the loan right at the start, so in my case £10,000 became £34,000 before I had even signed the agreement.

 

Of my £289 per month repayments, £244 was to repay interest, only £45 of the capital was repaid each month.

 

I intend to argue, in court if necessary, that I have been paying interest that I have not accrued and that more of the repayments should have been applied to the capital repayment.

[maybelline]

precisely! isnt it against the CCA regs to whack the interest on the whole thing, fees (assuming even they were lawful and necessary?!) so you end up paying interest on the arrangement fee etc, I have been paying for nearly ten years and it has barely budged, I am more than prepared to go into court against WF and finally get the matter looked at. surely what WF are doing is not right and if it is then there must be something seriously amiss with the whole system!

[The cobbett slayer]

Please don't think I'm boasting but I have the money to take WF to court if I have to.

 

Their branch manager cant even string a letter together. Chances in court?

[maybelline]

that can only be a good thing for the rest of us because it will prove they are wrong and maybe they will be wiser than to mess people about!

[chancer1]

Please don't think I'm boasting but I have the money to take WF to court if I have to.

 

Their branch manager cant even string a letter together. Chances in court?

 

I don't doubt it for a second, I took great pleasure in reading your NatWest thread - i managed to get my £455 back from them, not as big a victory, but a victory none the less.

 

They must train all their branch monkeys in the same tree, as the one I spoke to advised that he had never heard of anybody getting their charges back, and the best discount from my redemption figure would be £250, as that was all he was authorised to give, i did advise i was speaking to the wrong person, but that didn't go down well.

 

The other great moment was when their compliance dept advise me that they didn't know policy's, or procedures.

 

If it's not far away, I would love to watch - what stage are you at with WF?

[tembo]

Referring back to an earlier post in this thread, it is possible that WF are using the "rule of 78" to calculate the redemption figure. This could account for why the figure is higher then it should be.

 

I found out some more info about rule of 78 recently. Under the terms of the CCA 2002, from May 2005 it became illegal to apply the rule of 78 to a new loan. From May 2007 it became illegal for existing loans with a term of less than 10 years, and in May 2010 it will become illegal for all loans.

 

So unless your loan was for more than 10 years, WF may not use rule of 78. Worth checking?

[The cobbett slayer]

My loan was actually taken out in October 2004 so it's highly likely that the rule of 78 has been applied.

 

For anybody who doesn't know what the rule of 78 is, I've not been able to find a clear enough expalnation to link to without going to commercial sites, which I can't post links to here.

 

There is a thread that seems to suggest that it might be possible to overcome the problems of Rule 78. I haven't read it fully yet because there are some very long posts and I have a 2 year old who keeps pushing buttons on the computer so it will have to wait till he's gone to bed tonight!

 

http://www.consumeractiongroup.co.uk/forum/ppi/59087-rule-78-unfair-could.html

[tembo]

My loan was actually taken out in October 2004 so it's highly likely that the rule of 78 has been applied.

 

As your loan is 10 years, it is now illegal (since May 2007) to calculate the rebate based on rule of 78. I have found a government website that details the changes to the CCA (Early Settlement Regulations 2004) regarding this and also details the complex formula that replaces it. It's not easy reading but it does make sense if you try very hard! The link is: The Consumer Credit (Early Settlement) Regulations 2004

 

For anybody who doesn't know what the rule of 78 is, I've not been able to find a clear enough explanation to link to without going to commercial sites, which I can't post links to here.

 

A quick google search will reveal a number of explanations of the rule of 78, and the reasons for its name. One site I found has a calculator of rebates based on rule of 78. It is American and I believe non-commercial. I plugged in the details of my friend's loan and the quoted rebate figure and the calculator agreed with the figure to the penny. So that is proof that rule of 78 is being used. Unfortunately this is a 25 year loan so rule of 78 is still legal until 2010. The link for the calculator is Rule of 78 Loan Calculator

 

When you play with the figures for rule of 78 the results are frightening.

For a 25 year loan, the redemption figure goes UP every month for the first 7.5 years.

After that it comes down, but it takes until the 15th year before the redemption figure becomes less than the figure originally borrowed.

It is certainly worth researching the redemption terms before taking out any loan if you think there is any chance that you will repay early.

[chancer1]

On my settlement statement is said:-

 

Persuant to section 97 ???? is that different or am I being dumb?

 

OK.. I have read section a ilttle about section 97, that is just to comply with the request.

 

I have today requested via email another settlement statement and asked how they intend to work this, i.e. will they be using the section 78 rule?

 

Lets wait for the answer, they will not give me a figure over the phone, I asked how they work it out, (whilst on the phone) and the guy replied, we press the button on the computer and it prints it out, it would be funny it was so shameful?!?!

[The cobbett slayer]

Thanks Tembo

 

There's a bit of reading there but at first glance it could be really useful. I can't imagine for a moment that WF will have a clue what I'm talking about, which is probably to my advantage!

[tembo]

will they be using the section 78 rule?

 

Oh you WILL confuse them if you call it that. It's called "rule of 78" because as part of the calculation they break a year down into 78 parts and weight it accordingly.

 

12+11+10+9+8+7+6+5+4+3+2+1 = 78

 

so in the first month the rebate is 12/78, in the second month the rebate is 11/78 etc.

 

There are better explanations out there if you google it.

[The cobbett slayer]

This is about the clearest explanation of the rule of 78 I can find.

 

Home.co.uk: Loan Glossary: The Rule of 78

[maybelline]

Land Register Online

 

did someone want to look up their title, here is the link.

[chancer1]

Got a new settlement statement, it's gone up a £1000 since November, so this new rule is just about as good as the last one then???

 

[chancer1]

Right then...

 

Complaint sent 6th July to WFS/ICO/FOS/OFT/FSA

 

S.A.R sent 11th July

 

2nd copy of request for credit agreement sent 11th July (i sent it to the wrong address first time round)

 

They have failed on the credit agreement, I have been told by phone that they cannot find it.

 

I believe I have to wait a further 14 days now, and then I can report them?

 

Any advice appreciated

 

Thanx

[maybelline]

Welcome Finance have altered the details of the Default as I pointed out that it was inaccurate to the cra, they asked WF and then amended it!?

 

they have not sent a Notice of Default, they are in dispute over unfair charges, hearing pending and their allegred agreement is unenforceable due to interest charges incorrect and other faults!

 

they cant just amend something to suit themselves surely??