Free bank loan or not

I took out a small tesco loan of 3000 euros last april with repayments of 92 euro per month to be taken form my current account direct debit set up etc . I receievd a letter last week from ulster bank ( who run the loan for tesco) informing me that not enough funds were in my account to meet the payment and to please send the payment directly to them. I knew that thw fubds were there andWhen I telephoned them to enquire why the payment was not made they said it must be a mistake with my bank and that in fact no repayments had been made since september of last year and i now owed over seven months installments. I checked with my bank Aib who told me that I had set up the direct debit correctlty but it appears that aib bank were never asked for payment from ulster bank. I got back onto to ulster bank who told me that their compluter system had changed last year and that it appears that some error had been made and my details not processed. They proposed restructuring the loan to repayments of 99 euro a month however as mno repayments have been made for 7 months i am incurring additional charges and also as the interest rate has gone up i am now exepcted to pay extra and i dont think that this is fair. Also they want to send me a new direct debit form for signing . I think that they have lost my details and are unable to enforce the payment unless i sign the new form. I think that the loan was only rea ctivated after i applied for a top up from them two weeks ago. Any advise . By the way they were to come back to me on friday by telephone and i have not heard a thing from any one.

If you are asking whether you still owe €3,000, well the answer is yes.

You should not be out of pocket due to the bank's mistake however.

I agree with CCOVICH you still owe the money regardless. However i would demand they clear all penalties and interest incurred. You would be entitled to commence repayments now at the original interest rate not the increased one.

thanks for the replies, I agree that I should not be penalised for the banks mistake . I am just aggrieved that the initial letter from ulster bank implied that it was my fault that the installments were not paid (seven in all) when it fact that it was the banks mistake all along. I would have liked to get an apology from the bank but I dont soupose that that will be forthcoming any time soon. I might report it to the ombudsman.

The first step is to make an offical complaint to the bank (in writing).

If you are not satisfied with their reponse/action, you should then seek redress from the Ombudsman.

The bank should also give credit in lieu of the higher interest rates that now apply. Whether they apply all the interest at the start or each month on the balance outstanding, the OP should be put back to where she would be , had the mistake not occured. If the instalments were credited at the correct time, less of the capital would attract the higher interest rates of today.
As for the title of the post-well it would be asking a lot!

Make sure you get a copy of your ICB record, to make sure its been cleaned up...

I might report it to the ombudsman.

Click to expand...

The Ombudsman will only entertain a complaint if you have exhausted the banks complaint procedure.