I'm trying to help/advise a relation who lives in Scotland - they've asked me because I work in the financial sector but I'm reaching the limits of my ability so if a MN'er out there could advise I'd be very grateful.
My relation took out a store card in 2001, the credit limit on the agreement is £300 according to the form signed at the time. He had a phone call at some point in which, under pressure, he agreed to insure the card payments (PPI in other words). He didn't need this as he has job and good cover for sickness/redundancy etc. but anyway he did it.
Over many years he basically forgot all about the card and somehow failed to notice that he was still paying £25pm to this card. Last year he did notice and cancelled the payments.
I've helped him write letters to the company (it was a GE Capital card so it's Santander) but apart from sending him the original credit agreement, they have been pretty useless - they haven't provided a breakdown of the account and have said their records don't go back far enough to see how much he spent on the card. They have however said that the current debt is £550 approx and that the PPI premium was £929 approx. They've not responded to a SAR request (said the cheque wasn't enclosed although it was sent rec delivery and cashed) and have now said that their complaint process is finalised and passed the debt to an agency for collection, also they are still adding penalties and interest to the balance. The collection agency has sent 4 letters in a week (I don't know what they say yet, I'm seeing them tomorrow).
My relation isn't blameless in all of this - he moved house and forgot to tell them (having forgotten all about the card) so it's possible that information was sent to the wrong place although he thinks this is unlikely as his previous address is that of his parents. However he's a pretty straight guy and isn't seeking to hide from a genuine debt, just wants it explained. I've told him he's to refer to the FOS about the PPI and the failure to explain the debt but in the meantime he's worried sick about the fact that a debt collector is involved.
My questions are:
- is it really possible to still owe £550 if you have been paying £25 x 12 for 11 years?
- isn't £900+ for PPI cover completely ludicrous on a debt of less than half that?
- is is possible to tell the debt collectors that the debt is in dispute and will that hold off any action on that front?
- and is it usual/reasonable to continue adding fees and interest to a debt that is being disputed.
Should he pay it and take his argument to the FOS later?
Any advice appreciated - thanks, and sorry it's so long