Help needed with an neverending loan

ROCKMAN

Hi all


I am posting this on behalf of a friend .

In late 1999 early 2000 my friend got a car loan of IR£12 ,000 (to be paid back over 5 years )from her local credit union , She set up a direct debit with her bank for weekly repayment sum (around IR£100)to be taken from wages every week , Everything ran well until March 2001 when because of pregnancy difficulties and the later lost of the baby she had to take sick leave and later stop work (spending up to five months in hospital. )Her sister approached the credit union and bank and was assured the loan would be frozen for 1 year. (Due to the circumstances)
A year later she gets a letter requesting a meeting with her and the credit union , At this meeting she was informed that the loan was never frozen and that she was way behind in payments. .Around this time her saving disappeared (around IR£3500) she taught as repayments.
When she approached the bank she was informed the bank never stopped the direct debit a fact denied by the credit union saying payments never came into them (cash for weekly direct debit payments would be in the account due to sick pay been still paid in throughout her hospital stay)That cash has never been accounted for.
She reach an agreement with the credit union and has been paying €50(euros) a week since then ie for the last seven years .Her weekly receipts have/had nothing but the loan amount printed on them ,this amount has never changed and when she inquired about this she was informed that she was still paying off on the interest, Last month the figure jumped down to €11,150.

So after nearly ten years and near €24,000 or more paid she still has over €11,150 to pay .

Can this be right?
Could rates and non-payment fine account for this ?
Can she demand a statement from both the bank and credit union going back ten years?
Should she get a solicitor involved?
Any advice great appreciated .


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dotsman

I'm not quite sure what to make from this.

• What do you mean the 100 was to be taken from her wages?
• What exactly went on between her sister and the credit union (and bank)? There is no way her sister could have given instructions to either institutions without a whole load of documentation and/or legal intervention.
• With regards the £3,500 "savings": was this in an actual savings/deposit account or was it money sitting in her current account?
• What did all her bank statements say regarding this? Did they show the money coming out every week (and sick pay coming in)?
• Was there any formal complaint lodged with either the bank/credit union at the time the £3,500 went "missing"? If so, what was the outcome. Unfortunately, as this happened more than 6 years ago, it is outside the remit of the Financial Ombudsman. Not quite sure what avenues she can go down with this one.
• At the meeting of 2002, what documentation did they give her? How much did they say was outstanding at the time?
• What have her statements (other than the weekly receipts) since then said?
• What does her original credit agreement say? How much interest should she be paying, what penalties, surcharge interest etc apply?

To answer your questions:

Can this be right? Possibly. Put it another way, if the 50 per week wasn't enough to even cover the charges/interest, the capital could even be bigger than the original sum! It all depends on the rates/charges being applied. The original documentation (and any subsequent documentation) should specify what rates/charges apply.
Could rates and non-payment fine account for this ? As above
Can she demand a statement from both the bank and credit union going back ten years? Not quite sure what the legal rights are here. If she hasn't being receiving statements all along, then I'd imagine she would very much have the right to that information. If she was receiving statements, she would probably have to pay to have them reprinted. Whatever about the credit Union, I am surprised that a bank would not have been issuing statements on, at least, an annual basis.
Should she get a solicitor involved? Not yet, I would only go through the expense/hassle of a solicitor if it is proven that there is something wrong (or if the credit union stone-walls any investigation)
Any advice great appreciated .I know this is coming way too late for her, but the time to move on this was way back in 2002 when things first started to get very strange. As already mentioned, it is now too late to get the Financial Ombudsman involved regarding the £3,500. He can however be referred to regarding the payments since. However, you will have to go through the Credit Unions complaint procedure full first. For the moment, all she can do is demand the statements from the Credit Union and see for herself what's been going on.

http://www.financialombudsman.ie/

100gSoma

Original agreement was to pay IR£100 a week to pay of a IR£12,000 loan over 5 years?

What am I missing here. Even with huge interest this loan would be paid off in 3 years at that rate.

sarahlulu

banks have to issue statements, at least once a year. The only time this does not happen is if a customer moves without informing bank of their new address. In that case a statement will be returned to the bank by the post office marked 'Gone Away', and until the bank can obtain the new address, they are unable to issue statements.

ROCKMAN

dotsman wrote: »

I'm not quite sure what to make from this.

• What do you mean the 100 was to be taken from her wages?
• What exactly went on between her sister and the credit union (and bank)? There is no way her sister could have given instructions to either institutions without a whole load of documentation and/or legal intervention.
• With regards the £3,500 "savings": was this in an actual savings/deposit account or was it money sitting in her current account?
• What did all her bank statements say regarding this? Did they show the money coming out every week (and sick pay coming in)?
• Was there any formal complaint lodged with either the bank/credit union at the time the £3,500 went "missing"? If so, what was the outcome. Unfortunately, as this happened more than 6 years ago, it is outside the remit of the Financial Ombudsman. Not quite sure what avenues she can go down with this one.
• At the meeting of 2002, what documentation did they give her? How much did they say was outstanding at the time?
• What have her statements (other than the weekly receipts) since then said?
• What does her original credit agreement say? How much interest should she be paying, what penalties, surcharge interest etc apply?

http://www.financialombudsman.ie/

Thank you for our info .
We did not even know about a financial Ombudsman may be a route she can avail of,
I don't have all the information myself till I speak to her again but I'll try clear up a few things
The IR£100 was to be paid out of her bank account after her wages where lodged every week (wages at the time paid through bank)
The IR£3500 savings where in the credit union not the bank , just an ordinary savings account as far as i know.
No formal complaint was lodged at the time she though it was taken to balance the arrears ,
As for the freezing of the loan she remembers signing documents at the time but because of the grief she was going through she cannot remember anything about them really (she ended up having to carrying a baby full term knowing it could never survive ) It took her a long time to get over this and start to get on with her life , unfortunately it was during this time the meeting with the credit union was and also trying to deal with the bank and the missing payments and trying to track them down because of their attitude and stone-walling . She ended up walking out of the bank and has never returned, She just could not handle it at the time .And she has changed address since without informing the bank .

100gSoma wrote: »

Original agreement was to pay IR£100 a week to pay of a IR£12,000 loan over 5 years?

What am I missing here. Even with huge interest this loan would be paid off in 3 years at that rate.

Yes the IR£100 would have paid the loan off early , she had a good job at the time and increased the payment up to IR£100 a week so she could finish early (paying extra every week), which adds to the situation because she would have been a fair bit ahead when everything when wrong