First Active Loan with account Charges

My Partner took out a First active loan in the summer that was advertised at 6.8%. At FA's insistance she had to open a current account to get the loan, thus paying from BOI by direct debit to FA current then onto FA loan account. Why does it have to be this way only FA know.
Yesterday she got a statement which shows a quarterly charge of €6.40odd which is a quarterly maintainance fee on the current account. The account gives you no interest and is only in existance to serve the loan account at their insistance. She was not even made aware of the charges but told its just the way FA do their loans and would make no differerence. Its not the amount it's the principal here that troubles me.

Do people this think this is underhand? or a correct way to treat customers?

Ceatharlach said:

At FA's insistance she had to open a current account to get the loan

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I thought that financial product bundling was illegal? On the other hand I guess that some of it is not since you see the likes of Quinn Direct/Life/Insurance offering benefits for those who take out multiple policies (home, car, health insurance) with them...

Yesterday she got a statement which shows a quarterly charge of €6.40odd which is a quarterly maintainance fee on the current account. The account gives you no interest and is only in existance to serve the loan account at their insistance. She was not even made aware of the charges

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Did she not read the application form and terms & conditions when signing up!?!

Do people this think this is underhand? or a correct way to treat customers?

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Perhaps there's an element of that. But nothing that punters reading what they sign could not easily deal with. She could try complaining to them about it but I'd imagine they'll just say "well you signed up to these terms & conditions"...

In quinns case there is incentive - Thats fine. But in a banking climate where banks charges not only becoming a thing of the past, but now you can get interest on current accounts, this is a bit rich.
She only verbally went through the T&C details with one of their people, who claims they would never ommit this when speaking to borrowers. But they did. If they insist on having the account to get the loan surely there should be no charges then. They claim the charges exist on their current account regardless of the loan - Fine - then just sell the loan and not the compulsary current account with it (It all a bit Ryanairish)

The lack of interest on the current account is irrelevant and they are doing nothing wrong in offering such an account. Ditto for an account with charges. The only questionable thing is the seeming bundling of the loan and account products but I would presume that they are covered here. They are also most likely covered in terms of herself signing an application form on which she agreed to any terms & conditions applicable. If she did not read them then that's her own mistake.

I don't see what Ryanair has to do with this issue to be honest.

It's the fact you cant buy what you want unless you pay for something else you dont need. Ryanair have a tendency to try to slip you add ons if your not carefull when booking. There is no legal or logistical reason for the account to exist (Ala most other banks) so if their 'protocol' insists on it there should be no charges.

Ceatharlach said:

Ryanair have a tendency to try to slip you add ons if your not carefull when booking.

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Or if you don't read actually the content and links that they present on screen. Hardly their fault?

There is no legal or logistical reason for the account to exist (Ala most other banks) so if their 'protocol' insists on it there should be no charges.

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This argument makes no sense to me.

I cant see why you dont understand. If you take out a loan, you pay back the loan say by a DD from an account of your choosing into the loan account (2 Accounts involved). E.G Using an account and bank where your salary is paid into, DD to Loan account in other bank. It is hardly neccessary to set up a third account to be a go between from where your money is and your loan account.

Yes - it's not absolutely necessary but that's the way that FA do things it seems and your partner agreed to this and all the terms & conditions that go with it. Has she made a formal complaint about the bundling of the products and the fact (?) that she was not apprised clearly of the terms & conditions and charges that applied? Personally I don't think that she has a leg to stand on but if she is bothered then she should complain (in writing).

Thanks for your input Clubman. Will look into it.

Have just been made aware by different branch of First Active that the wrong type of current account was set up for the loan. The Loan officer in question did not made us aware of this at the time of set up. They are going to change the type of current account to the correct one and refund any charges incurred, and cant explain why a trained loan officer would have done this. We will complain to FA head office about the Loan officer who set up the accounts.

People should be aware of these situations can occur as even though we queried it, the loan officer in question was adamant the account was correct and the charges were correct.