Hi All

Can someone help with the following...?

Clode Retail Finance e-mailed me on 18 March with the following:
______
We need to let you know about new charges for payments being made by cheque or debit card. This is because of an increase in the costs for us to process these particular types of payments and the charges will not apply to any direct debit payments, made on time.

So, from 1st April 2008, we will have to introduce a charge for cheque and debit card payments received on any account and these will be charged at 1.6% of the payment being made. This will be added to your overall account on receipt of any cheque payment and will be included within any debit card payment at the time of processing.

We would re-iterate that, If you pay your account regularly via Direct Debit, then there will be no additional charges made.

Please accept this communication as formal notification of changes made to your loan agreement's stated terms and conditions.

Yours sincerely

Nick Davies
Chief Executive
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I replied asking the following:

(1) Which clause in the signed Fixed-Sum Loan Agreement or the Consumer Credit Act 1974 gives one party a right to amend terms without the signed approval of the other?

(2) Does settlement by BACS incur a transaction fee? If not, can you please supply your bank details? If yes, how is this justified when there is no charge for your receiving funds?

(3) How is the 1.6% fee proportionate to the costs involved of banking cheques (c.50p per item) or accepting debit card payments (c.20p per item)?


Other than telling me that they do not accept BACS as a payment method and that I could pay by postal order without them charging me a fee (yeah right - £8.75 charge per £250 order from the post office!) they failed to answer the other questions.

My question is - do I have to pay this extortionate fee? Also, if I don't pay and ask them to take me to court over it I can see them treating the fee as me underpaying the full loan settlement and charging their 29.9% APR on the whole value for the interest free period. This smacks of bullying to me! What can I do?!?

Sorry for the long-winded post but I thought I should give all the detail.

Thanks

Dan

i think it was bt who thought up this additional little earner, now everyone is jumping on the band wagon. you could argue that the interest payable on your loan should cover costs of receiving payments from you. i recall reading recently a lady took bt to court over same , sadly the judge found in favor of bt.. good luck, please get back to us with their reply.

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Hi - Did you get any response, I am due to pay off my TV after 10 months 'free interest' and am really annoyed that they are going to make me pay this charge? I have contacted trading standards for advise so am just waiting for reply

Thanks Janine

Hi Dan

My agreement with them is at that point where I have the option to pay in full. I too received the letter asking me to add 1.6% to cover increased handling costs! I called them and asked them where this was mentioned on my agreement to be told they sent me an email in March. I called Trading Standards who told me I was right to question this charge as they do not have the right to alter a credit agreement once signed unless agreed in writing by both parties. They suggested I write to Clode again giving them the option of sending me a letter waiving the 1.6% or if they insist on the payment let them know I will be referring the matter to the Office of Fair Trading.

I find this scandalous to say the least; this is a licence to print money; what's to stop them charging me £100 to cover their handling costs! I asked them how I pay so that I didn't incur the additional charge and they told me there was no alternative means of payment; I would have to pay the 1.6%. It bothers me that most people will simply pay the additional charge assuming this is something that was on their original agreement.

Any progress on your side??

Hi Dan (an all other participants in the debate!),

I raised pretty much the same questions as you with CRF ie scale of charges they intend to levy compared to what they'd pay in reality with regard to banking cheques, processing debit card payments, etc. When they eventually replied, it was to state that they reserved the right to vary their charges at any time without actually addressing my points on how disproportionate the charges are, and also confirming that I could pay by postal order (not an option, as you rightly point out Dan, given the £8.75 charge per £250!). Not satisfied with their response, I requested the contact details of the Financial Ombusdman from them, however a week later still having heard nothing, I sourced these myself and forwarded my e-mail on the issue to the FO's offices via their website, copying in CRF's MD and the Customer Services Dept from whom the unsatisfactory reply had come and am currently awaiting a response. I called to check on the status of my query about 10 days ago and was informed that there is a currently a backlog of queries which they apparently deal with in strict chronological order, irrespective of the nature of the query so I await their response with interest. I also forwarded the same to BBC Watchdog via their website, however as yet, no response. Interestingly, having forwarded my mail to the Financial Ombudsman, and CRF's MD, about a week later I received not an e-mail acknowledgement from CRF but an actual letter, no less, confirming the FO's details. This, I suspect, will be an attempt on their part to have correspondence on file confirming they are responsive to their customers. I will post the reply, if/when received, on the forum accordingly.

For reference, were we to pay directly through our respective on-line banking systems there would be no charge, however it is proving impossible to ascertain their bank account details to be able to make a payment. Even my own bank won't supply me with these despite having been obliged to set up a direct debit for them as part of the "Buy now pay later" process should we be stupid enough to not want to take advantage of the interest free option and pay 29.9% interest!

Regards

C

Dear all,

Following the involvement of the Financial Ombudsman on this issue, and 2 further conversations with employees of Clode Retail Finance, the latter agreed to waive the payment charges on my account if settled it by the date of expiry of the interest free period. I therefore recommend that anyone else who feels as strongly as I did about this should pursue a similar course of action as I suspect they won't reverse their decision across the board and will only do this for those prepared to take them to the wire!

Regards

C

I found the above conversation useful. I gathered an argument from the conversation and wrote them a letter stating I was unprepared to pay the 1.6% charge and had no intention of settling my account by any means that will incur an extra charge. They replied (within 3 days) ignoring the points I raised but accepted my payment (by cheque) as a goodwill gesture. I'll encourage everyone to do the same.

Hi All

Sorry - haven't been looking at the boards much lately.

I paid the fee with the settlement so that it was all clear - I was particularly worried that they would deem the non-payment of the fee as paying the loan back short and giving them an excuse to charge me with a full year of interest at 30-odd percent!

Since then I replied to the e-mail dialogue that was going back and forth between us giving them 14 days to refund the fee which they duly did as 'a gesture of goodwill'. I still believe it was 'a gesture of we're trying it on and don't have a chance of getting away with it' so like the previous poster, I urge anyone caught in this to fully defend themselves!

Good luck!

Dan

Hi OK I think the 1.6% is genuine as I work for a finance company and we have just had to introduce a charge for payment processing, we get told if we took the charge on then there wouldn't be any people in the offiice to help you with your finance. I think you are all taking this a little too far and should start looking into the light.

Unfortunately, I think you are missing the point! The issue at hand here is about Code Retail Finance introducing a charge subsequent to the acceptance of the terms and conditions of a contract which is legally binding on both parties. This charge is not covered anywhere in these terms and conditions which only cover charges related to default on payment. I work in credit myself and debit card payments amount to no more than about 36p in payment processing charges while cheques typically attract a fee of around 15p by the main clearing banks. They are not based on a percentage of the value of the loan which is what Clode were trying to impose. When Clode inform you after you've signed the contract that they are introducing a charge 50+ times more than these actual costs, you know they are just trying it on. Those of us who challenged Clode don't need to "start looking into the light", as you put it - we actually saw the light months ago, stood up for our legal rights and won the argument. If Clode were so convinced of the legality of their position they would have pursued us remorselessly rather than capitulating and relinquishing their claim "as a gesture of goodwill".

C