Retiree’s loan arrangement fear

May 31 2009 by Mr Justice, Sunday Sun

JOYCE HOLLAND was caught between a Rock and a hard place after a top lender changed its mind.

The retired education welfare officer had an agreement to pay off her two loans at a reduced rate.

The deal – giving more time to pay off the debts – had been agreed with lenders Northern Rock.

No problem, she thought. The arrangement, brokered through the Citizens’ Advice Bureau, CAB, would give her the time needed to get her financial affairs in order.

But her hopes were dashed when Northern Rock asked for full monthly payments.

And, within days, they went on to send letters and make phone calls demanding the monthly payments at the old rate.

The Rock’s change of position seemed to be triggered by an error by another bank Joyce had an account with, which led to the Rock receiving more payment than was agreed.

Joyce, of North Shields, North Tyneside, said: “Will Mr Justice please look into my problem with Northern Rock? I have two loans with the company but I am struggling to pay. I handed over my finances to the CAB who worked out a credit agreement which was agreed with Northern Rock.”

It worked well for about a year until the bank demanded full payment.

Joyce said: “I got a letter saying the offer of reduced payments were no longer acceptable. All I am asking is that they go back to the agreement set up by the CAB.

“After all they accepted it in the first place and should honour what was agreed. I am baring my soul to you and, hopefully, there will be a reasonable result.”

I was struck by how quickly Northern Rock acted to obtain a full month’s payment on one of the loans after telling Joyce her offer of reduced payments was rejected.

Only two days after telling Joyce the bad news, the bank demanded immediate payment, saying: “This is a serious matter and non-payment may affect your ability to obtain credit both now and in the future as information will be registered with credit reference agencies regarding the conduct of your account.”

A bank spokeswoman agreed to investigate. A few days later, she said: “Thank you for the opportunity to comment on the case. I am pleased to say the issues relating to Mrs Holland’s unsecured loans have now been resolved directly with the customer to her complete satisfaction. The original arrangement made for reduced monthly payments on her unsecured loans will go ahead.”

The spokesman said they were not aware of Joyce’s full circumstances when they demanded full payment.

The decision means Joyce can continue to pay reduced payments.