Wrong %APR applied - dispute with Bank

As the spam fairy hovered like a flatulent buzzard on Mon, 14 Jun

2004 08:50:09 +0100, "fostertom" sensuously caressed the keys and exposed:

That seems to be that. If you did agree, you should have it in writing and there can be no argument.

Perverse verses, putrid poetry, diabolical doggerel...

regardless of the advert what did the contract you signed say ?

documentation

The APR is whatever you signed up to on the agreement which you would have signed just before they deposited the money to you. There may have been three copies (or at least two), one of which you should have kept (or they returned to you when they'd signed their bit). The leaflet won't stand for anything - it's just simply 'an invititation to treat'.

The leaflet may have no contractual value, but it might indicate a degree of misrepresentation.

However, the original poster made it clear that s/he has only recently discovered the leaflet, and there is no indication that the leaflet was relied upon when the contract was signed, therefore there does not appear to be any misrepresentation at the time of entering the contract (although, given that the OP does still have the leaflet, the bank is not to know this ;-))

What were the loan rates offered to other customers? Was the OP a particular risk, thus justifying a higher rate? Why was the rate set at a particular amount, given that a different rate was advertised (e.g, was the leaflet out of date compared to the loan date and the base rate had shot up?) Shano

The OP didn't give enough information to reach that conclusion. He appears to have found the leaflet among his own papers, which suggests he may well have relied on it at the time.

On the other hand, one would have expected him to notice rather sooner that all was not as he had expected.

Thanks guys this is very helpful.

A bit more background. Been with this bank for 13 years now and found them reasonable enough to use for all purposes without shopping around.

The present loan was the third consolidation/renegotiation of a loan that started 3 yrs previously. First and second times I got 11.9%APR, exactly as advertised, no problem. Come the third time (the present loan) I got 12.9%, again no problem with acceptance, after 2 yrs healthy balance and no misbehaviour on my account. Yes, my fault - though surprised and worried, I just assumed that was the correct advertised rate at the time. Then just recently I checked and found that the advertised rate for that time was

8.4%APR. I rang and said 'there's been a mistake - can you put it right' but no - apparently there are no mistakes - it must be due to my 'status' at the time. But having spent some time looking through my statements and personal information, she could see nothing wrong, so suggested I should write in. The written reply says "our advertised rates for Personal Loans are 'typical' and subject to status" (which was news to me), gave some very ordinary reasons (which don't look like black marks to me) for the punitive rate, and as I did accept the rate offered, that's it.

As Tiddyogg, Zoe Brown, D.A.L. are telling me, also Eric Jones on uk.legal.moderated - thank you, but I'm not so sure. And to answer Shano, thanks, I don't think I was a particular risk (that's not my point anyway), and the 8.4%APR is as advertised in the leaflet dated for the time of the loan.

Having received year after year an update list clearly stating "these are the rates that currently apply to your accounts (as from such and such a date)" and never having seen any suggestion that these rates are in fact merely 'typical' and subject to status, I truly didn't know that any other rate might be applied - why should I, the bank didn't tell me, back then. Nowadays they do say a bit more clearly "rates may alter, but once taken, the rate is fixed for the duration" (thanks to Barry Salter on uk.legal.moderated for his survey of various banks' clauses). But back then, the only thing I can find, deep in the Terms and Conditions is "we may vary rates, and give you notice no later than 30 days after, and/or advertise it in the press". It's a long stretch to make that mean "advertised rates are 'typical' and subject to status".

So Ronald Raygun, thanks to you - I was relying on the clear honest "this is our tarrif" message of the leaflet (though I admit I didn't take note of the actual rate offered), and the lack of any statements from the bank to qualify or contradict that message. I had no doubt that, if the bank offered me the loan, it would be at the currently advertised rate. Wouldn't a Small Claims Judge hold that to be a reasonable and correct belief, given the bank's published material, supported by my past experience? Why should I think to doubt the correctness of the rate offered?

And D.A.L., if this was just an invitation to treat, then I agree with Ronald Raygun it comes close to misrepresentation. Maybe I ought to take it to the Trading Standards guys?

Looking forward to your further comments!

Thanks guys this is very helpful. As Original Poster, I've posted my reply on uk. legal.moderated, as this looks like becoming a legal rather than a financial debate, including to people who replied to my similar posts there and on the chat forum of Martin Lewis'

which is a fantastic site, take a look and see.

I look forward to your further comments, on uk.legal.moderated, if you please.

snipped-for-privacy@compuserve.deletethis.com

In message , fostertom writes

A good summary. A number of other thoughts go through my mind

The mere possession of a leaflet today dated when you took the loan means nothing because the leaflet may not have been on public display. It may have been in a box behind the counter each with a different rate on that was produced at different times.

It may have been a leaflet that you obtained with a statement or covering letter in which special conditions applied.

You may have bought ASU cover which can sometimes have the effect of increasing the APR.

There is a query about your 'status' and you say you have checked your statements. That isnt how it is done, you credit score may just have been a bit low at that time according to the profile the bank was then using for the purposes of marketing that loan.

How do you know the leaflet was a public offering?

The 'tariff' leaflet of rates generally covers everything except personal lending interest rates unless they are part of a specifically packaged product.

APR almost always have to be 'typical' because no 2 loans can have exactly the same APR (ignoring decimal restriction) unless they are taken out on exactly the same day and are exactly the same in every respect, although this is only likely to make a tiny difference, but is sufficient to show that APRs in adverts will always be approximate.

Is the size and term of your loan similar to the size and term quoted in the leaflet?

Have you got the original loan agreement, and leaflet. Are you prepared to let us see them in some way? Im not sure how you could do this, do you have a web page?

Thanks, John

I posted a full answer today on uk.legal.moderated, to everyone who had kindly answered my simultaneous Original Posts there, here, and in the chat room of

I don't want to reveal which bank, just yet. I can say the leaflet was a very public offering, posted every year to all the bank's customers, I'd guess, "to ensure you're kept up-to-date with the rates that apply to your accounts". Within it, there was some small print but nowhere any hint that the advertised rates were merely 'typical' and subject to contract. Good point - there may have been a covering letter saying that, which I've chucked. I'm waiting for a second reply from the bank, in answer to my request to show me exactly where I was told.

I didn't buy ASU. The tariff says "with effect from (date) the following rates will apply to Personal Loans", and for a loan of 12,800 it says

8.4%APR, no quibbles.

I'm not really arguing about whether I was a good or bad risk, to explain the 12.9%APR I was given instead of the 8.4%APR advertised. I'm saying the bank hadn't given itself any powers to give any other rate than the advertised rate, in any documentation I am aware of. It wasn't obliged to offer me a loan, but if it did, all its proclamations stated the rate would be 8.4%APR, and nothing, not even the T&C small print, contradicted or qualified this, at that time (it does now, but it didn't then). Banks take it as gospel that advertised rates are merely 'typical' and subject to status. But where was I informed of that? - I truly didn't know.

Best wishes,

Tom

In message , fostertom writes

Yes, I know you've posted a full answer elsewhere cos I've read it there. I choose to reply in this forum - OK?

You seem to reply selectively.

Let me get this straight.

You have recently found a leaflet, which I assume is dated from around about the time you got a loan from the same institution who granted the loan.

Just recently you have realised that the APR of the loan you have is different from the APR in the leaflet.

For some reason you seem able to say that the leaflet was distributed to all the bank's customers (I dont know how you can say this) and was "to ensure you're kept up-to-date with the rates that apply to your accounts".

You have 'chucked'; the supporting documentation.

Apart from asserting that you have the leaflet quoting the APR you dont appear to have any other supporting evidence, especially as you have not answered my question about the existence of the CCA agreement.

You have also failed to address 'invitation to treat', but I accept that there may be a trading standards offence.

Can you explain your expectation that a leaflet for an offer of one particular personal loan should apply to all personal loan lending?

On the annual list of terms & conditions can you see what the personal loan rate (for NEW loans) is?

You say " I'm not really arguing about whether I was a good or bad risk, to explain the 12.9%APR I was given instead of the 8.4%APR advertised. I'm saying the bank hadn't given itself any powers to give any other rate than the advertised rate, in any documentation I am aware of. "

This is the crux of it. Can you scan the leaflet with OCR and show us the words? I find it hard to believe there isnt a 'subject to status' or other 'get out' clause because otherwise they would have to lend the dosh to everybody who applied.

If there isnt such a get out clause then I think you have a case, but the time that has expired and your inability to link the leaflet to the loan you have will defeat you.

Well, obviously, as I said before, like, all credit to your little tidy mind, but at the end of the deah, many of us do not have access to uklm, and some of us do not like what we hear about it