On the 2nd May 2003, we had a settlement figure for our car finance. We had remortgaged and wanted to pay it off. When the money came through, phoned the company up to check the settlement figure still stood, was told yes, so paid it by debit card over the phone. A couple of months later received a letter saying that we owed a payment from 6th May therefore the settlement figure was void and we owed a further £2400.We sent a letter stating that we had checked the figure was still correct (it was available for 10 days, we paid on the 7th) and basically refused to pay.We received no acknowledgement of this letter from the company therefore thought the matter over.
Three weeks ago we received a statement from them showing our payment of £6375.90 and an outstanding balance of £2400.We have never had a statement before this. Last week we received a letter informing us that our account was £126 in arrears.What they have craftily done is used the £6375.90 as advanced monthly payments, as it is 3yrs worth.
As the settlement figure was given to us before the May 6payment was due we had cancelled the DD as we knew we were paying it off. Can anyone help as regards to where we stand with this?
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They may not be considering the date you paid over the phone as the date the payment was received onto your account. Payments by debit can *can* take more than a day.
Check the following with the finance company:
1. The date they issued the original settlement figure.
2. Their policy on how long settlement figures are valid for.
3. The date the payment for £6375.90 was credited to the account (try to reconcile to your bank statement showing the debit card transaction).
With these dates you should easily be able to prove to the finance co that they have made an error.
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We can infer that the original settlement figure was given on the assumption that the 6th May payment would have been made. The logic of this (which you might not agree with and it sounds as if it was not made clear to you) being that (a) the DD for that payment was in the pipeline, (DD data is loaded about a week before the payment date), and (b) the assumed settlement date used was after 6th May on the assumption that it would take a period of time (10 days or so) for the settlemnt to be made.
Mathematically they probably have an argument - it's not possible to say without having all the relevant paperwork. If you bury your head in the sand you will probably end up with a judgement against you, so you have to deal with this matter head on.
They (or their systems) appear to have handled this badly. I would suggest you write the the Managing Director and say that
1. It was made clear to them that you were intending to settle the account - otherwise they would never have asked you for the £126 rather than putting your account advance paid.
2. You declined to pay the £126 on the basis that you sincerely beliveed that your liability had been discharged.
3. You received no further response, which you took to mean they had accepted your argument - with hindsight, you acknowledge that was a mistake and you should have sought confirmation.
4. Whilst you now understand that they did not accept your belief that that debt was discharged, that does not in your view justify the treatment of the £6375.90 as advance payments, since they clearly knew that you intended it as a full capital repayment - otherwise they would never have asked you for the 6th May payment until the 'advance payments' were used up.
5. Offer them the £126, subject to a proper clarification of the settlement calculation, in full and final settlement.
6. You think that you are acting reasonably in unfortunate circumstances, and if they are not prepared to accept your proposal and close the matter you intend to seek guidance from the Financial Ombudsman Service* and the relevant licensing authority, the Office of fair Trading.
*The FOO will handle consumer credit complaints from next yeat sometime - but most lenders will already come under the FOO in respect of other banking/insurance activities.
The usual health warnings apply about advice given on internet forums - if you are threatened with legal action or proceedings are issued, get professional advice; the foregoing is just opinion based on partial (in both senses) information.
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Sorted. Sent a letter to the company concerned last week and have received a reply today to confirm that payments are now complete. What a weight off my mind. Thanks to the above for the advice on here, much appreciated.
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