Interest on buy now, pay later purchases

[CYNthesys]

Re: Interest on buy now, pay later purchases

Whats your thoughts on this bit please?

As it would be paid off in 72 weeks the APR you calculated far exceeds the contractual rate quoted. Would this be considered a breach of contract on Littlewoods part?


When she made the payment of £329 she specifically told customer services that this payment was being made to avoid having to pay the full interest. Customer services said they would send an email to the relevant department, so that the interest could be adjusted.

[WendyB]

Re: Interest on buy now, pay later purchases

I think that they will tell you what you want to hear. If there is no proviso for the interest to be adjusted, then it won't have been done, no matter what customer services said or who they emailed (if indeed they emailed anyone)
I really think that it's one of those where unless you pay the whole lot, you get stung for the interest.

A few years ago, I was going to buy a PC from PC World, under a similar thing. i mentioned to the salesman that we would probably be able to pay some off beforehand, and he told me it didn't matter, unless the whole lot was paid, we would still have to pay all the interest.

[CleverClogs]

Re: Interest on buy now, pay later purchases

Personally Cyn, I think you're reading to much into it, I think it's just incorrect grammar. As in, what they mean is, in order to not pay the interest.

That may be what they meant to state in the contract and/or pre-sales literature, but one should not have to guess what they may have intended to state when they have stated something else and not bothered to correct their misstatement before the contract was agreed. If they lose money because they had employed a profo reeder rather than a proof reader, so be it.

[WendyB]

Re: Interest on buy now, pay later purchases

It's not necessarily a misstatement though, is it? Unfortunately the use of dodgy grammar is not a crime. All it means is that there is more than one way of interpreting it, so, if it went to court, the claimant would have to rely on the judge interpreting it the same way. On the other hand, the judge might say that it was easy to understand and that Littlewoods made it as clear as they could with no intent to mislead. Who knows?

[CleverClogs]

Re: Interest on buy now, pay later purchases

I believe that any ambiguity in a consumer contract would be interpreted to the benefit of the consumer, as the supplier would have the benefit of legal advice when the contract was drawn up, whereas the consumer would not have such benefit before they signed the contract.

[CYNthesys]

Re: Interest on buy now, pay later purchases

This bit is a misstatement though-
Interest will not be applied to the account until the end of the BNPL period

[Turboman]

Re: Interest on buy now, pay later purchases

Right---back after another go with my AmortiZit

I'm confusing myself--let alone you Cyn (wish Bill was around)---but this is what I have just got:


1--- Entered £629 as loan amount and 104 @£10.19 anf first payment date 12 months after origination.
Got interest at £57.28% and £359 interest year 1,£307 at year 2 and £123 at year 3
Which is £790---
It does state in T&C that interest occurs from delivery of goods---so cannot understand where contractual interest of £431 comes from----although year 2+3 gives ££431 interst

2---Entered £629 over 2 yrs -104@£10.19 gives $431 interest at 58.66%

3---Entered £629 over 72 weeks @£10.19 and got £104.74 interest at 23.22%

4---Entered £300 over 72 weeks at £10.19 and got £433 interest at 62.18% interest

5----Entered £629 over 72 weeks @ £10.19 and got £246 interest at 22.55%

So---what does this mean--I'm sorry Cyn--I don't know----but I think its odds on that you are legally contracted to pay the pre-calculated £431 irrespective of part payments.

[CYNthesys]

Re: Interest on buy now, pay later purchases

Thanks anyway Turbo

What interest rate do you get if you enter £731.00 over 72 weeks @ £10.19 per week please?

[Guest]

Re: Interest on buy now, pay later purchases

HI
Hope nobody minds me putting my two penneth in.
As someone said earlier APR is really of no use when you are trying to work out what is left to pay on an agreement in this way, its function is merely to give an indication of the quality of the bargain and takes into consideration things like repayment intervals and stuff. Better working with flat rate interest .Which is
(Total interst due cost / total cost)/ Period (years) I n this case it works out at 19.7%.
This means that in the first year she should have paid £124.41 in interest.
If the OP paid £300 then that means that £300 – 124.41= £175.59 would be the excess and therefore this amount comes off the balance 629-175.59 so the amount due after the payment should have been £453.41.
Applying the flat rate interest to this it would give a total cost of the remaining loan of ((19.7/100)*435.41)= £89.68(interest due) +453.41(remaining balance) = £543.10.
This is the total amount she should have to pay in my opinion including interest.
This is an approximation because the repayments would have been made on a reducing balance but it is close enough I think to make the point.
I did a thread on there that talks about APR some time ago don’t know how useful it may be.
http://www.legalbeagles.info/forums/showthread.php?t=23763
Also it is as well to remember that when using an on line calculator for APR they are usually set up for monthly repayments not weekly, the different intervals have an effect on the figure and the formula has to be altered accordingly.
Peter

[Guest]

Re: Interest on buy now, pay later purchases

HI Again

I can calculate the amount owed more precicely if it is of any use and tie it up wth the APR but it will take a bit more work, let me know.

Best regards
Peter

[CYNthesys]

Re: Interest on buy now, pay later purchases

Hi
Thanks for that, think its near enough for the purpose of replying to the Ombudsman

When I was trying to work it out on paper I used the same formula and arrived at roughly the same figures as you

[Turboman]

Re: Interest on buy now, pay later purchases

Thanks anyway Turbo

What interest rate do you get if you enter £731.00 over 72 weeks @ £10.19 per week please?

Wheres £731 come from Cyn?
------------------------------- merged -------------------------------

HI Again

I can calculate the amount owed more precicely if it is of any use and tie it up wth the APR but it will take a bit more work, let me know.

Best regards
Peter

Yep -- help me Peter---its doing my head in----I'm used to just verifying PPI refunds/predicting them where the interest rate of the loan don't come into play cos the PPI ptmnts are "contracted"

Lopve to have another LB man to bounce ideas off!

[CYNthesys]

Re: Interest on buy now, pay later purchases

Hi Turbo
The £731 = the £300.00 balance + £431.00 interest repayable at £10.19 per week (roughly 72 weeks)

[Guest]

Re: Interest on buy now, pay later purchases

Hi Turbo
The £731 = the £300.00 balance + £431.00 interest repayable at £10.19 per week (roughly 72 weeks)

Hi
I get
Total credit = £300
Total cost of credit= £433.68
Interest flat rate = 104% P/A
APR 362.4% Calculaing on weekey payments
if this was over 18 calender months the APR would be 279.1%
Peter

[Guest]

Re: Interest on buy now, pay later purchases

Wheres £731 come from Cyn?
------------------------------- merged -------------------------------



Yep -- help me Peter---its doing my head in----I'm used to just verifying PPI refunds/predicting them where the interest rate of the loan don't come into play cos the PPI ptmnts are "contracted"

Lopve to have another LB man to bounce ideas off!

Hi T

Yes and i have couple of PPI reclaims that i have been intending to get arround to, so i will be knocking on your door soon

Peter