Repaying a loan early

[vagrantbrain]

Hi all,

I had an unsecured loan which I wanted to pay off early last month, I asked for a settlement figure which was provided, I paid the full amount the same day and received an email the next day saying " We write with reference to the above loan agreement and can confirm that your account with us is now settled and no further payments are due". They've now come back to me saying the loan payment that was due yesterday hasn't been paid (not surprising as the DD was been cancelled) and chasing me for a further months payment - it now appears that their settlement figure includes the September payment, even though the settlement letter says "The amount required to settle your xxx Loan on 26 August 2020 is £xxx" - Are there any industry standards or legislation on how the settlement figures are calculated? It seems a nonsense to me for a lender to be able to provide settlement figures that don't actually settle the loan..

TIA

[swill453]

Are you sure it wasn't just an automatic message because of the failed Direct Debit, and it hasn't caught up with the status of the paperwork?

You have 2 separate pieces of information from them supporting your case, I would just forward them back to them and ask for further confirmation nothing is owed.

Scott.

[vagrantbrain]

That was my first thought, but after speaking to them this morning their position is that "the law" requires them to factor in any payment due to be made in the next 28 days when calculating the settlement figure, and as such the figure provided is what is still owed after the next monthly payment. The letter confirming no further payments are due is apparently correct because no further payments are due, except for any in the next 28 days Sounds complete BS to me, and trying to debate the finer points of English language with someone who barely speaks it was getting me nowhere so i've told them to start a complaint and i'll go from there.

[Arborbridge]

That was my first thought, but after speaking to them this morning their position is that "the law" requires them to factor in any payment due to be made in the next 28 days when calculating the settlement figure, and as such the figure provided is what is still owed after the next monthly payment. The letter confirming no further payments are due is apparently correct because no further payments are due, except for any in the next 28 days Sounds complete BS to me, and trying to debate the finer points of English language with someone who barely speaks it was getting me nowhere so i've told them to start a complaint and i'll go from there.

Is it worth the emotional bother? It depends on the amount, of course.

Logically, it should be black and white - their position sounds quite possible, but can they send a statement to show the account balance etc? Either they allowed for the yet unpaid payment into account or they didn't - either way it should show on a statement.

Arb.

[chas49]

Assuming that the loan in question is a regulated credit agreement under the Consumer Credit Act 1974 (as amended), the inofmation they gave you is covered by s97 which says:

Duty to give information.
(1)The creditor under a regulated consumer credit agreement, within the prescribed period after he has received a request to that effect from the debtor, shall give the debtor a statement in the prescribed form indicating, according to the information to which it is practicable for him to refer, the amount of the payment required to discharge the debtor’s indebtedness under the agreement, together with the prescribed particulars showing how the amount is arrived at.

If they only supplied a bare figure without the details, they may not have complied.

Ask them what "law" they are referring to in their claim that they don't include normal payments due in the next weeks....

[Clitheroekid]

Sounds complete BS to me, and trying to debate the finer points of English language with someone who barely speaks it was getting me nowhere so i've told them to start a complaint and i'll go from there.

It's not worth the effort of going through a formal complaint. Just email them and say that there has been a concluded offer and acceptance, no further payments will be made, and no further correspondence will be entered into. You shouldn't then hear from them again.

[mc2fool]

... i've told them to start a complaint and i'll go from there.

I take it this is a kosher financial services company that would fall under the Financial Ombudsman ... do make sure they take it as a formal complaint, letting them know that you hope they will give you their full and final response well before the eight weeks maximum required by the Financial Ombudsman (that'll let them know you're serious).

Now, while the FOS won't take up your case unless you've made a formal complaint to the company and received their final response (or 8 weeks have elapsed without one), I have found that if you just give them a call anyway they're willing to chat and offer informal general advice (although maybe covid has changed that). https://www.financial-ombudsman.org.uk/

It's also possible that they might just know if you are being fed bovine manure or not. Indeed, it might be worth taking a look through the case studies on their website.

You could also try contacting Citizens Advice to ask about it. https://www.citizensadvice.org.uk/about ... ontact-us/

BTW, their site on repaying loans says: "Write to the lender and ask them to tell you the total amount you must pay to clear the loan in full, this is called an 'early settlement figure'. The lender must tell you the amount you need to pay in full. How much interest you have to pay depends on how much of it you've paid already. You’ll then have 28 days from when they received your request to pay the amount off in full.". https://www.citizensadvice.org.uk/debt- ... ent-early/

[vagrantbrain]

Thanks all for the advice - much appreciated. Having managed to speak to someone with some authority they've admitted they wrongly calculated the settlement figure due to 'human error' and have offered to write off the outstanding balance as a measure of goodwill, so alls good.