Discrepancy on Statement and Agreement

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

Hi Wendy, I'd be interested to find out what they say.

My understanding, until somebody points out the error of my thinking, is that if you're paying the admin fee yourself from your own funds at the same time you're paying the first instalment then you shouldn't be paying the interest to your lender for using your own money. Also the sum payable for the admin fee, because you're paying it from your own funds, should not be added to the money you borrowed to buy the car in the first place (the Total Credit) as you supplied the money not the lender! Does that make sense? It reminds me of keeping a dog but barking yourself!!

ToP

[WendyB]

Re: Discrepancy on Statement and Agreement

It makes perfect sense. Personally I don't care if its counted as part of the TCC or not, as long as we aren't paying interest on it or paying it twice., who supplied the money isn't really the question in my book, they can stick the figures wherever they like in order to make it balance. But absolutely NO WAY is my daughter going to pay interest on money she hasn't borrowed. A quick calculation reveals the 300 is obviously being paid back to them at a rate of 10.23 per month (including interest). Which leads back to your point - why are we paying back money we never borrowed in the first place??? In effect she is paying the admin fees twice - once up front, paid out of her own pocket, not borrowed, and again over the life of the loan plus interest!!!

The more I think about it, the more annoyed I'm getting.....I can't believe I never questioned this before, although to be fair we haven't actually had a statement yet, it would have probably clicked then.

I will be on the phone tomorrow morning, the finance is through Santander Consumer Finance...let's see how good their Customer Relations are, shall we?

[WendyB]

Re: Discrepancy on Statement and Agreement

Me and Amethyst have been messing around with the figures, and it seems that it's even worse then I thought. We have come to the conclusion that they have worked out the interest on the original amount of 3500, then added on the 300 fees to that, added on interest to the 300, then added on the 300 again to get to the TCC!!! Unbelievable, but it seems to be the case.

Soooo

bear in mind that the calculator I used rounded figures, so that's why no pence are shown and would account for the small discrepancy

purchase price 3500
credit fee 150
completion fee 150
3800

interest on 3800 455
credit facility fee 150
completion fee 150
interest on 300 35
sub total 790 (interest shown on agreement 787.60
plus credit fac fee 150
completion fee 150
TOTAL 1090 (TCC shown on agreement 1087.60

sorry about t being all out of line, but try as I might it won't let me put it all nice and neatly lol.
this means, in effect, that not only has my daughter never borrowed the 300, having paid 150 along with the first dd and is to pay the other 150 with the last dd, she is paying back to them money she has never borrowed, and she is paying it back TWICE. With interest!

Sorry, did I say IS paying back?? Whay I meant to say was, she WOULD HAVE BEEN paying it back.....had not Tiredofpaying started this thread.

I think my plan is this: to ring them in the morning, act a bit thick, say I've been looking at the figures and I can't make sense of them, would they mind very much explaining in writing, in simple terms, exactly how it breaks down please?? Then see what they say and take it from there. Not to let on that they have made a complete pigs ear of things and they are a bunch of scammers I think I'll just wait and se what they come up with, then point out the error of their ways. You never know, they may realise they have made a dreadful mistake and put it right

Once again, ToP, thanks for starting your thread in the first place, and I'm sorry for hijacking it!

Wends x

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

I'm glad you think it makes sense because I thought I was going mad. Probably still going mad but for other reasons. I hope I'm right. If anybody spots a flaw in my logic then please let me know.

It would be interesting to see what is on your statement as an opening balance. Is it the same amount that you thought you borrowed, i.e. the Total Credit? The other things that make up Total Charge for Credit, i.e. interest and admin fees are taken after the agreement starts. You pay the Admin Fees with the first and last payment and the interest on the Total Credit accrues during the lifetime of the agreement and you pay that and the capital back in monthly instalments. At least that's using my fixed sum loan as a reference point. I think that the point to note is that the agreement says that the Admin Fee is payable at the same time as the first instalment and the back end Admin Fee is payable with the last instalment. Some agreements WILL have the Admin Fees added into the Total Credit because they are borrowed from the lender and paid back within the monthly instalments. In this case I would expect that all the monthly instalments would be the same throughout the agreement and the Total Credit to include fees.

Let me know how you get on. What time did you go to bed? I thought I was late at 1 but you're just burning it at both ends.

ToP

[WendyB]

Re: Discrepancy on Statement and Agreement

No statements yet, the first payment was 2nd August. So I am pre-empting it, might as well get it straight from the beginning than down the line hadn't I?

I went to bed about 10 mins after my last post, but fortunately I'm not in work this week and didn't have to get up this morning, that's why I haven't done anything about it yet today - I've only hust got out of bed

Will update after the phonecall.

[WendyB]

Re: Discrepancy on Statement and Agreement

Right then ToP. I have phoned Santander and surpisingly enough, they are right and I'm not. Basically, they have used straight Simple Interest which when calculated does indeed work out at the figure quoted on the agrement. So we have not been charged for borrowing the 300 and are not paying it back twice.
I have no idea why all the online calculators gave me the same, lower figure, can only presume that they work it out on APR rather than Simple Interest.

In the interests of not confusing people further, I think it might be best if I deleted the above posts, otherwise it might give anyone reading this completely the wrong end of the stick......

[Amethyst]

Re: Discrepancy on Statement and Agreement

pmsl : for clarity the interest on Wendys debt is worked out

7.5% of £3500 = £262 x 3 years.


Online calcs do work on APR - but the quoted APR on Wendys agreement is 20.3% which is wrong by about 2% but I presume that is within the accepted level.

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

Hi Wendy, I couldn't comment about your interest calculations as I've only just got to grips with the XL spreadsheet that PeterBard recommended but I do know there's something not right on my agreement because the Total Credit is showing the "extra" £150 and I paid that Admin fee separately and at the time of the first instalment, as per the wording on the agreement. So I am being charged an extra £150 and the interest thereon and unless somebody can convince me otherwise then I still believe that to be the case.

Sorry if I sent you on a wild goose chase. It would be interesting to see what your opening amount shows on your first statement.

ToP

[Guest]

Re: Discrepancy on Statement and Agreement

Hi Wendy, I'd be interested to find out what they say.

My understanding, until somebody points out the error of my thinking, is that if you're paying the admin fee yourself from your own funds at the same time you're paying the first instalment then you shouldn't be paying the interest to your lender for using your own money. Also the sum payable for the admin fee, because you're paying it from your own funds, should not be added to the money you borrowed to buy the car in the first place (the Total Credit) as you supplied the money not the lender! Does that make sense? It reminds me of keeping a dog but barking yourself!!

ToP

Hi

Both fees should be in the charge for credit, your calculation for APR should just be the amount of credit without any charges and your TAP or repayments.

You cannot pay out of your own funds because thaat would mean that whatever you paid woud not be factored onto the APR it must be contained within the tcc.

Peter
------------------------------- merged -------------------------------

pmsl : for clarity the interest on Wendys debt is worked out

7.5% of £3500 = £262 x 3 years.


Online calcs do work on APR - but the quoted APR on Wendys agreement is 20.3% which is wrong by about 2% but I presume that is within the accepted level.

Hi

Acccepted tolerence for APR on Credit Greements are .1 below the actual value or 1 above.

so if an agreement is 27% then as long as the agreement says between 26.9-28% it is compliant

Peter
------------------------------- merged -------------------------------

Me and Amethyst have been messing around with the figures, and it seems that it's even worse then I thought. We have come to the conclusion that they have worked out the interest on the original amount of 3500, then added on the 300 fees to that, added on interest to the 300, then added on the 300 again to get to the TCC!!! Unbelievable, but it seems to be the case.

Soooo

bear in mind that the calculator I used rounded figures, so that's why no pence are shown and would account for the small discrepancy

purchase price 3500
credit fee 150
completion fee 150
3800

interest on 3800 455
credit facility fee 150
completion fee 150
interest on 300 35
sub total 790 (interest shown on agreement 787.60
plus credit fac fee 150
completion fee 150
TOTAL 1090 (TCC shown on agreement 1087.60

sorry about t being all out of line, but try as I might it won't let me put it all nice and neatly lol.
this means, in effect, that not only has my daughter never borrowed the 300, having paid 150 along with the first dd and is to pay the other 150 with the last dd, she is paying back to them money she has never borrowed, and she is paying it back TWICE. With interest!

Sorry, did I say IS paying back?? Whay I meant to say was, she WOULD HAVE BEEN paying it back.....had not Tiredofpaying started this thread.

I think my plan is this: to ring them in the morning, act a bit thick, say I've been looking at the figures and I can't make sense of them, would they mind very much explaining in writing, in simple terms, exactly how it breaks down please?? Then see what they say and take it from there. Not to let on that they have made a complete pigs ear of things and they are a bunch of scammers I think I'll just wait and se what they come up with, then point out the error of their ways. You never know, they may realise they have made a dreadful mistake and put it right

Once again, ToP, thanks for starting your thread in the first place, and I'm sorry for hijacking it!

Wends x

This is correct

The fees plus the interest derived on them are contained in the tcc.

The APR is correctly catculated usig this figue and the3500 as the total credit.
Have a look here

APR,TCC and TAP and how they affect enforceability - Legal Beagles Consumer Forum



Peter

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

Hi

Both fees should be in the charge for credit, your calculation for APR should just be the amount of credit without any charges and your TAP or repayments.

You cannot pay out of your own funds because thaat would mean that whatever you paid woud not be factored onto the APR it must be contained within the tcc.

Peter

Hi Peter, I can see that the fees should be in the Total Charge for Credit for the APR calculation and I can see that what I paid from my own funds would not be factored into the APR calculation.

My reasoning is nothing to do with the APR calculation. It's to do with the money that has been added to the Total Credit amount shown on my statement (showing I've borrowed that extra amount) in the name of Admin Fees (or whatever) and the fact that those fees were paid by me with the first instalment so I didn't need to borrow the Admin Fee amount and therefore it shouldn't be added to the Total Credit. I think that I'm paying the money twice. If I'm not then what happened to the money that was added to the Total Amount at the beginning of the agreement? Where did that go? I can see the point of the lender adding the Admin Fees to the Total Credit if I'm not paying the fees with the first instalment and the fees need financing. In this case then I would have thought that all my instalments would be the same amount. I realise that the APR calc is important but it's not what concerns me - it's where the extra money that I appear to have borrowed has gone. I paid it back but who got the benefit of it? Not me as far as I can see.

Let me know if I'm wrong and where I'm wrong cos it's driving me nuts!

ToP

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

Right, in the absence of any suggestions which suggests that either everybody's confused (possible) or everybody's bored (probable) I came up with the following whilst peeling the spuds. The money that has been added onto the Total Credit at the beginning of the agreement is to pay the Admin Fee one month into the agreement and the kissoff fee at the end of the agreement (I can hear some people cheering!). This now works for me but for one thing. If the Admin fee isn't due until 1 month into the agreement why am I paying one month's interest on it but more importantly, if the kissoff fee isn't due until the end of the agreement then why am I paying several years' interest on it? And why doesn't the Admin Fee and the kissoff fee add up to the extra money that was added at the top of the agreement? No, I don't know how that affects the APR!

Confused even more? And to think my ex-boss thought I'd make a good accountant. I fancied it for a while until I realised that double-entry referred to book keeping!

ToP

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

OK, I can see that it's only me that's confused.

Does anybody know if the Lender has to explain any amounts that have been added to the amount borrowed and thus attracting interest? Say the aforementioned £150 had been added to the opening balance on the statement as it was meant to be an Admin Fee and some kind of termination fee, then where would it be listed on the agreement to notify the borrower that they were being charged interest on fees that they may be tempted to believe were interest free as they were notified as being payable at the beginning or more importantly at the end of the agreement? Does that make sense?

ToP

[WendyB]

Re: Discrepancy on Statement and Agreement

Well of course you are entitled to an explanation of what is on the account. If you don't understand it then ask them to explain it simply, and put it in writing to you exactly what each item is, what it's for etc. You can't really do much about it until you know exactly what's what.

[TiredofPaying]

Re: Discrepancy on Statement and Agreement

Hi Wendy, thanks for your suggestion. This course of action suggests that the borrower has spotted the addition of an unexplained amount and realised that they should raise a query with the lender. I didn't spot the addition when I took out the loan and would suspect that a lot of other people would not spot it either. I think that this is what the lender was hoping for. It's hardly open and transparent with the lender not pointing out the addition of "fees" especially when these fees attract interest over the life of the agreement. If your final fee is £50 -100 then you're paying that amount + several years' compound interest on it. Or have I got it wrong?

ToP

[WendyB]

Re: Discrepancy on Statement and Agreement

Well with the greatest of respect it doesn't matter what it suggests does it? Unless you are clairvoyant or a mindreader the only way you are going to get an answer is if you ask the question first. Perhaps they have indeed hoped you won't spot it, but now that you have, it's no good conjecturing what it might it might not be, you need to know,and indeed have the right to know, exactly what you are being charged for and why. Otherwise you can't do anything about it. There may be a simple explanation then again there may not be. But you can't take any action without getting the facts straight first and it seems to me that the only way to do that is to ask.