Hi All,

Two years ago I was in a financial mess and needed some help. Unfortunately, no high street lender would touch me - it's always been a problem and I have never known why. Even checking my credit report didn't highlight anything. Anyway, Welcome Finance offered me a life line and I took it.

I took a loan out for £2000 with a repayment of £155 per month over two years (what I thought). I was desperate for the money so signed on the dotted line. Me and my partner bought a house last year and it prompted me to have a look at my credit agreement which stated my loan term was over three years, not the two I had originally thought. I had already signed and paid for a year so I didn't do anything.

Earlier this year, I cancelled my PPI and they sent me out a new credit agreement. Instead of changing my monthly payment, they shortened the term of the loan but today I phoned the office because I wanted a settlement figure which they can't tell you over the phone, only by post so I am awaiting that. Whilst I was on the phone, I asked what my outstanding balance was and they told me £2170.00 - WTF?! The original loan was for £2000 at £155 per month which means I have already paid £3720 off and still another £2170 so in total for a £2000, I would be paying back £5690!

I asked the lady what the total was to pay at the start of my loan and she told me £3053. When she told me that she said that there was something wrong with my account because she said in theory, you have paid more than you needed to. She transferred me to the Branch Manager who is sending me out a settlement figure and statements but didn't seem to understand what I was saying. My loan was for £2000 and the APR is 60% = £3200 to pay. I have paid £155 for the past two years = £3720 so don't they owe me money?!

The Branch Manager said I owed them £311.90 that I was in arrears which is incorrect - I have never missed a payment and I have my bank statements to prove it.

Please tell me, am I going insane or have I paid more than I should have already with still a year outstanding?

Sounds like the PPI has added quite a bit on to your loan, this could explain why you still have some to pay.

That's why I am a little confused as I had that cancelled and everything was amended. I have phoned them again today and they tell me to speak to the branch. So I speak to the branch and they just say they are sending a statement out.

I think my only option is to go into the branch and demand to know the in's and out's of all this as even the four call centre reps I have spoke to agree that there is something wrong with my account!!

Because you only cancelled this recently, you will have paid a lot for PPI, the PPI cab sometimes be front-loaded which means that what you are paying to your loan in the early days is mostly for PPI and interest.

Kirst, you need to get someone to mediate for you with this. I would take both your original credit agreement and later one to CAB and get them to check them thoroughly. Sounds as if you volunteered for the PPI but a common trick when revising terms is to change the term (usually extend though) and/or increase amount of loan. They'll do this by lumping excessive charges onto the redemption of the original agreement thus meaning a bigger figure is needed to redeem it from the new agreement. Difficult to comment further without seeing the credit agreements.

Both previous posters suggest PPI prob the cause and this could be so. However 'welcom' being who they are I would always assume the worst and let them prove otherwise. Good luck and don't let the bu$$ers drag you down.

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Thanks for the reply.

I recieved my statement and settlement figure on Friday afternoon and again, am even more confused now I have seen this.

My settlement figure says £2374.39 even though my balance outstanding on my statement is £2171.93 at the end of September. However at the end of December 2007, my balance outstanding was £2618.71 so after paying £155.95 a month for nine months which calculates £1403.55, they have only cleared £446.78!

Apparently my total amount repayable at the start of the loan for £2000 was £5614.20 (£2000 loan, £978.63 for insurances, £2635.67 interest). To pay, £155.95 for 36 months.

My new credit agreement that I recieved in June states loan amount £2000, no insurances, £1814.97 interest. To pay £105.97 for over 36 months = £3814.97. They told me not to sign that agreement and that I will continue to pay £155.95 but reduce the term of the loan which was absolutely fine with me.

However, I have on my settlement agreement that I have already paid £3274.95 which doesn't include a payment of £311.90 I made in August so I should have paid £3586.85 so I should only have £228.12 to pay with October's payment of £155.95 needed to be taken off, leaving me just £72.17 left to pay.

So my question is, where the hell have they got £2374.39 as a settlement figure?

I phoned the call centre up as soon as I saw this and they put me through to the Account Manager who said everything was right on my settlement figure and statements, that if I didn't like it to write a letter, who told me that he wasn't going to help me and eventually hung up on me!

The silly man even said my interest is added monthly to which I proceeded to ask so you are telling me 60% is taken off monthly and he said yes! I then told him to be careful what he says because I know that's not the case as APR actually stands for Annual!

I have contacted the FSO and I am just waiting for their response.

APR does stand for Annual however it is purely used for comparison purposes, interest may well be charged monthyl but calculated daily. AER is another calculation for comparing rates.....it really is a whole complicated system!

I am going to assume that your name 'In the know' is ironic.

Interest can be charged daily, hourly, monthly or in fact at any interval of time. However if you have an annual APR of 60% this absolutley does not mean that you will be charged 60% each month!

This issue sounds liek a classic example of nobody in the organisation knowing how Interenst is calculatd on a loan and indeed the generally poor standards of maths we have in these organisations that they couldn't even spot very large accounting errors.

I am afraid that FOS is probably the only cause now as Welcome seem unable and unwilling to resolve the issue.

Please let us know how you get on

"Interest can be charged daily, hourly, monthly or in fact at any interval of time. However if you have an annual APR of 60% this absolutley does not mean that you will be charged 60% each month! "

Cerbius, cerbius, cerbius, please before you question some one elses knowledge READ their statement. I did not stipulate that the interest would be 60% each month, i clearly stated that for the OP not to get too hung up on the Annual element of APR, i advised her that APR was generally a tool for comparison purposes as it also involves other costs.

I also find you name ironic, the fact that you chose to not use one brain yet alone the three ones that stand upon your canine head.

ALSO advising that the FOS is the only solution shows a lack of WORKING market knowledge, they will not assess a case until they feel that the Claimant has exausted the companies complaints procedure.

This looks like another financial advisor spawned from reading their copy of the Sun money page.

right let me set this straight,

Personal loans are interest bearing, your apr is 60% so interest is going on at 5% monthly on the balance remaining with welcome finance..

Your ppi as you didnt cancel it within one month you did not get a full rebate, you only recieve a part rebate, its all in the welcome finance leaflets

Personal loans are progressive, like a repayment mortgage, when you first take out a loan, the majorioty of your monthly payment goes towards interest and a little off the capital, over time it gradually increases so you pay more and more capital

It annoys me when people state that companies like welcome are rip-offs and are always mis-sold PPI, well all I can say is that what kind of person does not look at things like APR's and work out what you will be paying in total, if you look at the top right of the credit agreement, it has in bold what your total interest repayable is yet you still sign it..

on the credit agreement it also states in the bottom left hand corner that we have the right to add charges at our discretion and even quotes the charges we can add on, just underneath the signature box, yet you still sign it, just pay it, you've signed for it, no point complaining a year later!!!

"I have paid £155 for the past two years = £3720 so don't they owe me money?!" - all i can say this is is with out interest, they are not charities

"on the credit agreement it also states in the bottom left hand corner that we have the right to add charges at our discretion and even quotes the charges we can add on, just underneath the signature box, yet you still sign it, just pay it, you've signed for it, no point complaining a year later!!!"

A nice impartial view.

I am sure you are fully aware of the industry needing PPI and its place is justified however a lot of people are not fully advised of the exclusion and T&C's when signing up to it

Thanks again everyone for your comment.

b-singh: you come across as though you work for them or have done in the past as many people have had very similiar problems so when you say that it annoys you when people complain about Welcome Finance, people only complain when they have experienced very poor customer service and their reputation is only due to the amount of customers who have had such service.

I am not trying to get out of paying anything and my calculations are correct. I was given a full rebate and have a new revised credit agreement to prove it - which they are denying all knowledge of. I had another conversation with them on Monday and again, they tell me the amount I am paying is correct yet when I proceed to go through my calculations and talk about the recent credit agreement I recieved, they suddenly can't speak!

I have wrote a letter to them now including all credit agreements I have recieved from them. I am sending a copy to the FSO also and retaining a copy for myself also.

If I didn't think I had a 'leg to stand on', I would not be causing such a fuss.

i thought loans from welcome are now interest only

no not at all.. its still part capital part interest..

and kirsty. .the people you are dealing with must be new people who have not worked there for long.. I do not work for welcome finance, I work for a bank however even we get complaints of these, dont get me wrong welcome finance may have ridiculous interest rates etc HOWEVER they do not advertise that much, their branches are always well out of the way so people come to them.. and their credit agreements are very clear cut for that reason..

I know with welcome finance they people who 'sell' ppp do not make any money even though the company do however what you should do is pay the £155 for 36 months then dispute your remaining balance because at the moment as we speak, for every month you do not pay you will be paying default interest and they will then use that excuse for that balance being so high.. so keep paying, at the end of your 36 months then dispute it

oh and the new credit agreemement you got the branch will not know about it as all PPP cancellations are done through head office so the local offices will not have a copy of your new credit agreement

I don't think you understand what I am saying.

The interest is calculated at the start of my loan therefore I knew what I was paying on the interest - no problem. However, if the interest has been calculated at the start of the loan and added to the total to equal £155.95 a month over three years, why are they added interest on each month? I'm not the only person who finds this extremely bizarre. On my credit agreement, there is now 'total amount to pay' so I never knew from the get go exactly how much they expected of me and being extremely desperate, the ins and outs were not my top priority - getting my rent and council tax paid were.

I never said I was not paying. I have always paid monthly with a direct debit and have not cancelled this so no charges will be added onto my account. None that I know of anyway.

Regarding the new credit agreement, I know my branch will not know anything about hence phoning Head Office ... who then put me through to the branch ... who then put me back through to Head Office! It's clear to see that no-one there knows what they are doing. All I want to know is why they still expect me to pay over £2000 when my original loan was only for £2000 two years ago over three years considering a revised credit agreement indicates that I should nearly have paid this off.