I have a secured loan with a variable interest rate with Firstplus. They have been very quick to increase the interest charged in the past when rates were rising, however now that rates have reduced, we have had no reduction offered at all. Is it possible to challenge this? has anyone been sucessful in negotiating reduced rates on similar loans?

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On a crusade against Firstplus

I am in exactly the same situation. Surprisingly, around March last year I received a rate reduction from Firstplus, sadly soon followed by 2 rate increases. Two days ago I received an (unsolicited) leaflet with budget calculators and advice on how to keep our finances in check...! I was so tempted to reply "why don't you cut the rate instead"? The problem is that our loans with Firstplus are unregulated ... I think they will have to reduce the rates, but it may well take 3 or more consecutive base rate reductions to achieve this. No I have never negotiated anything with them (nor indeed have I tried to contact them), out of sheer pessimism, really. Their variable rate is not tied to the base rate, so they can do what they want. Perhaps even more so now as they have closed all new business, so they don't even have to keep up their reputation as much. I had thought that if we all knew about each other we could send a petition, or write to the papers...

Hi I don't know if you know but firstplus is owned by Barclays or more accurately Barclaycard who are owned by Barclays. Interestingly it is Firstplus Christmas party this evening and i'm sure there are lots of reporters who are fishing for stories regarding this. Firstplus are based in Cardiff and I have just left the party [not invited] to gain a bit of knowledge for my own website!! Another interesting snippet is Barclaycard are in the process of writing down [writing off] tens of thousands of accounts believed to be some 70-80, million pounds [this was buried in the financials last week]. My advice is to write to firstplus for a copy of their credit agreement and regulated or not [what makes you think they're unregulated] check that the terms are legal under the statutory legislation AND check alll clauses pertaining to the variable rate and the base rate.

I can't go into all the legislation here and now as it would take about 10000 words to explain it but I would make a complaint and threaten the banking ombudsman to Barclays citing the FSA mantra of TCF [treating customers fairly] I would not deal with Firstplus but go direct to Barclays and Barclaycard. You are right that Firstplus are not taking new business they have also laid off a fair chunk of staff.

Remember even if a product is free from regulation it is not free from statutory law and is overseen by the OFT. In light of the news today I'm sure there would be a lot of interest to know that Barclays are seen to be towing the government lead in helping the poor consumer and Firstplus are ensuring their customers are even poorer. MiKe

Thank you Mike ... OMG. I do (did) have a Barclaycard and *just today* settled it and cancelled it, because my credit limit was slashed down TWICE after I made a substantial repayment (and I have a perfect credit file, so I was really baffled and outraged)... is this what you mean by Barclaycard writing down accounts? You mean credit cards (and slashing doen limits immediately after customers clear the balance)? Well if so I can tell you it's no joke that I sent them a long letter of complaint together with my card cut in half. But of course cant do the same with the Firstplus loan. I was just planning to ride the wave for a few years, and then pay them off with a remortgage if I can get it. But basically ride the storm until the economy picks up again (I am an economist).

Anyway it is very reassuring that statutory law still binds unregulated contracts. I am very ignorant in these matters. I will study the Firstplus loan terms and conditions further, and see what, if anything, can be done. Kindest regards. GG65

Hi both, thanks for your responses. I think it would be good if we could band together and start putting some pressure on them to play fair. They have made money out of us in the good times, and yes, they even increased our rate last year just after rates had been cut 1/4%. We have always made our repayments on time and have never defaulted on repayments so how can they justify not reducing rates now? Time to start flexing our consumer muscles & the ombudsman may be the thing to threaten them with. I have a bee in my bonet now so i'll draft a letter today - let me know if you do the same and how you get on.

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On a crusade against Firstplus

It is quite unusual to have a variable secured loan usually they are fixed at somewhere about 2-4% above the lendng rate SVR, Although lenders can levy any interest rate , at the outset depending on an applicants credit history, for instance both NR and the Blemain group use a credit score system which is colour coded put the score in for one applicant and a blue colour will come up blue would equal say 12.9% put another applicant in with a poor record and red would come up red would equal 25.9%. These would be fixed rates regardless of the movement in the bank rate. The fact that these are variable would suggest that they would work the same way as a tracker mortgage but as we have seen recently the bank rate has come down and lenders are not passing on the savings.

There is a movement at the moment challenging contracts on loans and credit cards that they meet the contractual law that binds them notably the Consumer Credit Act 1974. Where contracts say were done over the phone or online and no physical signature was obtained then that contract is deemed unenforceable OR if not all relevant paperwork was supplied and signed I.E. an application for a credit card pops through the post you apply and sign the application and the lender issues the credit card without the contract [the application form will usually only pertain to the conditions of the application and not the actual contract] then that contract is unenforceable. What does that mean????

In fact it means you don't have to pay it, YES YOU HEARD ME RIGHT!! Regardless of how much you owe if the lender cannot provide an original signed contract that sets out the conditions of the aforesaid act and a borrower defaults a court will not recognise the contract and the borrower doesn't have to pay!!

Your contracts are still bound by this act, I assume Firstplus sent you a contract that was signed by you setting out the conditions if so you would have no redress for that but you have to question why a variable rate contract rises when interest rates come down. Apart from anything else with the government out to help people through this crunch/recession/depression one would assume that all lenders would be seen to be acting fairly remember Barclays products are still regulated by the FSA and their codes and also the Banking code, having an unregulated loan doesn't mean there is no legislation to cover it. It just typifies the mess the whole financial system is in where you have regulated and unregulated loans [remember this only pertains to the size of the loan] and regulated and unregulated mortgages; residential v buy to let[commercial] sometimes I think this is done to confuse the public to seeking so called EXPERT advice.

Regarding the writing down of Barclaycard accounts [it does mean writing them off] I assume that this was done on defaulted cases but it would be interesting to know how many people have challenged them regarding their legality [as above] and have had their debt written off even though they are not in default!!

I realise that all this legislation and terminology is confusing and baffling, nothing is easy where the FSA is concerned, but you have to persevere and get to grips with it, If you are going to try to band together i would suggest getting on as many sites as you can, I don't think Monetsupermarket will let me put links in here but try motley fool on a search and click on the uk link. very good site with lots of good people knowledgeable and very proactive. all the best Mike

Hi Crocky.. Wow, you certailnly know your stuff and your advice is much appreciated. I have started with a polite letter asking them if they are going to drop the interest rates and act fairly to customers. I have also mentioned that I am in touch with other customers who feel the same way and we would act collectively if necessary. It may do the trick, but in the meantime i'll get onto other forums as you suggested. I've just checked the paperwork and we did sign a loan agremment so I guess we are tied to that! My Hubby & I are not struggling to pay the loan, i'm just not going be taken for a mug by first plus whilst rates are falling. Thanks again for your response.

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On a crusade against Firstplus

I would also ask them [politely] that if you are not saisfied with their response that you would like to know your avenue for official complaints I usually word this with something like ''I assume you are are governed by a trade or iindustry body and would be interested in checking with them to validate what you say, could you tell me who that body is'' that usually gets their notice and are duty bound to tell you !! Good luck, Mike

I took out a secured loan with firstplus in January of this year, i have been on the phone to them twice in the last 3 months to see if they are dropping their rates, but never get any joy off them! i will now take the advice off this thread and will be writing to them in the morning. One point that i find hard to beleive is that there is a redemption penalty for the whole term of the loan! will be interesting to see if stands up legally.

I will keep you all informed on my progress.

Sean did you take out ppi with the loan. You may not know but there is a compensation fight on at the moment regarding overselling of ppi. I'd be interested to know the redemption penalty plus if your ppi was paid in a lump sum you would be due a refund if you did redeem.

For all you other Firstplusers out there the ppi issue pertains to you and is a very good tool at the moment, let me know. Mike

We took out PPI on our loan which is underwritten by Barclays (funnily enough) We were offered a deal that if our loan repayments were all paid on time and we do not default in any way, we can claim all of the cost of the insurance back at the end of the term. That amounts to just over £7300 for us so we are looking forward to this as a windfall we can expect in just under 3 years time. We took our loan out in Oct 06 - its worth others checking to see if this offer is part of their agreement.

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On a crusade against Firstplus

Hi Crocky,

i didn't take out the ppi as i have my own unemployment insurance in place, as for the redemption, it is at 2 months interest! i am adament that i will get past it as it stinks! i could understand if it was a fixed rate, but to have a redemption fee on a variable rate beggars belief!

You can see why Barclaycard and Barclays used the name Firstplus to market these!! It would be interesting to know if a lot of Firstplus customers were Barclaycard holders and if they used this information to target these loans to customers who had relatively big Barclaycard balances. It would be interesting to know what the OFT would make of this I would suggest one of you writes to them to get their opinion!!

Mike

Hello Crocky,

I don't have a barclays card but i can see where you are coming from on this! tha way it is at the moment firstplus have us by the short and curly's, and because no one has made a fuss they are happy to carry on, time to turn the table on them!

To Welshdresser

I don't really want you to tell everyone about your finances on an open site but I assume if your ppi rebate is £7300, then your ppi is £7300+. i also assume that your loan is 10+ years in term that equates to a whopping £60 per month on a ten year plan and £40 per month on a 15 year plan just for ppi. Obviously it depends on the size of your loan [again don't disclose] this kind of thing is exactly what the FSA is trying to outlaw and if these ppi plans appear to be excessive then there are remedies to put this right.

Just to let you know there are [were] some mortgage brokers charging £2000=£3000 per case [client fee] a lot of these brokers sold single premium [added to the mortgage] ppi and earned sometimes thousands of pounds in commission as well. As this practice flourished the FSA frowned upon it. It then became rampant in the industry with even greater ppi plans [and commissions] added to the mortgage. Eventually it became de rigeur to practice it and finally the FSA did unnanounced raids on brokers who flouted their guidelines and in some cases banned these brokers from their ranks. But secured loan companies have been allowed to carry out this practice and even worse, in this case, the commission went directly to Barclays.

More ammunition for your guns people!!