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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Had a loan set up in March 2004 all linked to FHBR. On 5th

Customer Question

Had a loan set up in March 2004 all linked to FHBR. On 5th March I received a letter saying that my rate would decrease by 1.1% to 10.8% pa. This is the last letter and reduction that I have received. After many attempts to have the rate corrected, nothing has been done by the Company. Do I have case please?
Submitted: 4 years ago.
Category: Law
Expert:  Ash replied 4 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
Alex Watts : Is it a tracker and if so what is the rate, is it exactly the FHBR?
JACUSTOMER-lcc23v7w- : Many thanks. There is no actual reference to a tracker as such but the contract clearly states that it is "variable". They did not offer a fixed rate at the time. The monthly payment can go up as well as down according to their T's and C,
JACUSTOMER-lcc23v7w- : ,s
Alex Watts : Does it say it is linked to that rate in any way, or just variable?
JACUSTOMER-lcc23v7w- : They quote "the way in which our interest rates are calculated is based on the FHBR" they also confirmed that the rate at application was not a special low start up rate. Our concern is that no further rate reductions have been passed on since March 2008. It's stuck at that figure since even though we had received many letters from 2004 to 2008 advising us that in line with interest rate increases our loan would increase. Can see no reference whatsoever that there would be a minimum interest rate figure that they would never drop below regardless of what the B of E and FHBR sat at.
Alex Watts : What do the terms state about the rate please and any link?
JACUSTOMER-lcc23v7w- : Item 8 in the Firstplus PLC T&CS state that "we may from time to time vary our interest rate. We may increase or reduce our interest rate for one or more of the following reasons namely to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently efficiently and competitively ". Their letter dated 5th March 2008 confirms that the rate is variable and that that reduction was in line with Market conditions. Attached to that letter was a list of FAQs which confirmed that the reduction was down to the fact that the loan is variable. They go on to say that "the way in which our interest rates are calculated is based on FHBR.". "We will always advise our customers of a rate increase or decrease tat affects your monthly repayments as soon as possible". quite clearly they have not and the rate now is even higher than the one quoted in the "reduction" letter of March 2008.
Alex Watts :

Does it say HOW it is based on FHBR?