Moneybarn - HP VT - Payment Holiday

[WightSedge]

Good afternoon,

Following C19 related difficulties with Job/salary I applied for a Payment Holiday with Moneybarn in March 2020 for three months, and went back to paying in full from July. The three months have been added to the end of the Agreement. Moneybarn have also sent a Notice of Sum of Arrears.

I am still in financial difficulty and need to VT the agreement, I pay £460 a month – Car price was £13,500 in Jan 2018, total payable was £21,769, I've repaid £12,963. The car is worth somewhere between £7k and £8k (whether it will get anywhere near that at auction is anyones guess).

The below is what their most recent email stated in terms of the Payment Holiday:

How will the payment holiday affect your agreement?

Your payment holiday is a ‘temporary concession’ which means the terms of your agreement remain unchanged. Any payment(s) which were held during the payment holiday will be due at the normal natural end date of your agreement. We will then take these payments in monthly instalments, as agreed when we offered your payment holiday to you. We will not charge you any additional interest or charges under this arrangement as a result of you repaying arrears in this way.

Please note - we will need to send you a ‘Notice of Sum in Arrears’ every 6 months going forward. We’re required to send this to you in line with regulations, to reflect the fact that you have missed payments due to an agreed payment holiday. As long as you’re up to date with the agreement (other than the agreed payment holiday) you can ignore the fact that it will request you to get in contact with us to address your arrears.


The question is, will I need to repay the three month payment holiday?

[R0b]

The rule is that you only need to pay 50% of the total price, so I don't see how you need to repay the payment holiday if you have already met the threshold. There is also the fact that the email confirms that the payment holiday will be due at the end of your agreement, so although you are treated as having 'missed' those 3 months, there is an arrangement in place to pay at the end of the agreement, so in fact they are no longer due as of now.

Only way to find out is to VT and then take it from there.

[WightSedge]

Many thanks Rob, much appreciated. I think I know what Moneybarn will say, and will take it to complaint/FOS if necessary.

[WightSedge]

Good morning,

Following my initial post above I have received a letter confirming that the billing has been completed.

The account balance is within a couple of £ of what I thought, but they are looking to recover the 3 missed payments, plus another on top (no reason why as I VT'd before my next payment was due).

So as previously mentioned, at no point was I told that taking a Repayment Holiday would effect a Voluntary Termination, plus there was an agreement to add these payments to the end of the finance term.

What really confuses me though, is that they have reduced the Half Rule to £6947.70 - when the total amount financed was £21,769....

Could anyone point me in the right direction as to how to go about complaining to Moneybarn and/or approaching the FOS?

Any help would be greatly appreciated.

[R0b]

I'm not sure either. I think you need to write back to Moneybarn and ask them for a full explanation as to how they have arrived at this decision, whilst putting forward your interpretation.

Why don't you write something out and post it up for critique.

[WightSedge]

Thanks Rob, I've drafted the below which I think they will deem as being a complaint? Anything you would remove? or add?

Dear Sir or Madam,

I write with reference to your letter dated 16^th October 2020, confirming that the billing has been completed, and that a balance of £1,852.72 remains.

I would like to make the following points, which I would like to be looked into, and look forward to your response:

Half Rule
Your letter explains that the Half Rule has seen my balance reduce by £6947.70. However, the total amount financed was £21,769, meaning the Half Rule should total £10,884.50. I have repaid a total of £12,969 up to the date of my notice terminating the agreement.

Payment Holiday
In April 2020 you agreed to allow me to take a 3 month repayment holiday, as I had previously been made redundant and had a job offer rescinded due to Covid19. At no point during this process was I made aware that taking this repayment holiday would effect my ability to Voluntarily Terminate my agreement, and it was confirmed that these payments would be added to the end of the finance term meaning these payments were no longer due until the end of the agreement. Whilst I have started back at work, I am earning considerably less than I was previously, and this was the reason for me needing to Voluntarily Terminate the agreement, before experiencing any further payment difficulties.

I do not believe that I have been treated fairly, and that Moneybarn did not provide the relevant information about how the Repayment Holiday would have effected my rights to Voluntarily Terminate the agreement, nor was I given alternative options that would not have left me with a considerable balance outstanding, ie Voluntarily Terminating in April may have been in my best interests in my particular circumstances.

I look forward to receiving confirmation of receipt of this letter, and your reply in due course.

Yours faithfully,

[R0b]

To be honest I think it can be much shorter than that and no need to refer to the half rule or payment holiday piece.

Dear Sir or Madam,

I write with reference to your letter dated 16^th October 2020, confirming that the billing has been completed, and that a balance of £1,852.72 remains.

Having exercised my voluntary termination right, my understanding is that liability under the contract is limited to one half of the total price:

Total price payable: £21,769
One half total price: £10,884.50
[number] monthly instalments of £460: [total amount]

Based on the above, I am not sure how you have determined that there is a balance of £1,852.72 left to pay. Please can you explain with a breakdown as to how you have arrived at the outstanding balance, because I am not expecting to pay anything more.

Yours faithfully,

[name]

[WightSedge]

R0b I finally received a response from Money Barn today, ref my complaint in relation to the above.

They have stated that because they did not inform me of the impact of the Repayment Holiday that they will be writing off in full the three months added to the end of my contract. So thats a good result.

However, they are still requesting that I make the September payment in full (£463). Their explanation is as follows:

I would like to inform you that, after investigation, I can see that the source of these arrears are from the previously mentioned payment holiday. As well as the month of September 2020, where your direct debit payment was unsuccessful. Please note that your billing date is the 8th of the month in line with the start date of your agreement, 8 January 2018. Therefore, your payment is expected from that date but not late until your agreed Direct Debit date has passed. I appreciate that you voluntarily terminated your agreement on 21 September 2020 and your Direct Debit was not due until 25 September 2020, however, your payment was billed from 8 September 2020. I am sorry for any confusion this may have caused.

I'm not entirely sure if this is accurate, or whether I should fight it further?

Thanks for all your help in this matter, it really has saved me a lot of money!