Saturday, 11 February 2017

The Voice - Consumer's Voice

How can it be so much?

In June/July 2016, I got a P20,000 loan with my union and they charged me a stunning P14,000 interest! In November 2016, I cleared the loan and to my surprise I was further charged a settlement interest amounting to P3,644.99! The whole set up is confusing, how can I be charged twice? When I asked the reason why I was told because I was breaching contract by repaying! How weird is that? Is it really possible to penalize an early payer? It's the weirdest thing I have heard by far! All I know with lenders, is late payers, defaulters are the ones penalized rather than pre-payers! Please help me understand all these!

Thank you very much for your assistance in advance.

This depends on what the agreement you signed says. Very often loan agreements will describe how things work if you choose to settle the loan earlier than originally agreed. The only piece of law I know that relate to the amount they can charge is the “in duplum” rule which says that when a debt is settled the interest charged cannot exceed the capital amount that is outstanding but that rule hasn’t been broken in your case.

I assume that the loan was over a period of several years because that’s the only way I can see that the interest would have been so much. That’s the sort of amount a lender would charge for a loan period of 10 years or more.

You have to remember that lenders don’t offer loans because they’re kind and charitable, they do it because they make lots and lots of money from the deal. They were looking forward to a steady income over ten years or more and you’ve disappointed them by settling early. That’s why there’s a penalty, to persuade you not to leave them without steady income. I suggest you get a full statement from the union or the lender they used to give you the money. You should also ask them whether there’s any refund due to any insurance policy that might have been included in the loan.

Forgive me for saying this but don’t you think it’s ironic that this is a union is doing this to you. Aren’t they meant to stand up for worker’s rights rather than impoverish them?

Where’s the laptop?

I bought a laptop on high purchase and it got stolen from my house as it was broken into while we were away attending a relative's funeral. However I reported the issue to the shop and was asked to submit all the necessary documents from the police as proof of theft. An officer from the store also called in at my house to do assessment for further verification of theft.

I was then asked to wait while the necessary procedures are done hence be given a replacement thereafter; that was in June 2015. Up to now I haven't received any response but rather I recently received a phone call from a debt collector's office that I am owing the shop money and that I am requested to pay such monies or I will face some repossession.

My account was not in arrears when the laptop got stolen I only stopped paying when they took long to refund me as was the promise.

I'm asking for your help with regard to this.

I can imagine how frustrating this experience must be for you. Clearly the store has catastrophically let you down. There’s no possible reason why it should take one and a half years to process an insurance claim and replace a laptop. They’re not that expensive and they’re not that difficult to find.

I don’t think you should have waited for more than a few weeks at most for the store to process the paperwork. If you‘d come to us earlier I’m sure we could have helped encourage the store to speed things up a little bit. Unfortunately, your biggest mistake was to stop paying your instalments. That’s always the worst possible thing you can do, even though it seems reasonable at the time. Despite what you said, you are now in arrears and if you look at the small print in the hire purchase agreement you signed it will say clearly that the store isn’t required to do anything to help you while you’re in arrears.

I suggest that you contact the store again and ask for a full statement of your account and then see what you can do to settle the debt. Meanwhile we’ll contact them and see what they say about the insurance claim.

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