[Alty]

This is a hard story to tell, so any questions, I'll try to answer them. I'll give as much info as I can, but I just found out about this today, and it's a bit foggy, my husband is not great at explaining this sort of thing, and I only have what he's told me, and a very confusing statement sent by email today, to go by.

In April 2007 my husband took out a loan to get lasik eye surgery. The full loan amount was $2440. It was a four year loan, and should have been paid in full by May of 2011. Well, we had a few hard times, and had a few NSF charges, so the loan was not complete in May, it took an additional 7 months.

We've never gotten a bill, no account balances, nothing. We just paid every month, and in December 2011 the loan should have been paid. Since we never received bills, or account balances, we figured it was done.

Well, they took out another payment in January 2012, and my husband, thinking the loan was paid and they had a clerical error on their end, put a stop payment on these charges. In February they took out a payment, as well as March. My husband didn't notice those payments, but once he did, he put a stop payment on the April payment, thinking they'd finally realize they were mistaken. Long story short, since February 2012 they've continued to take payments out of our account, and my husband has caught 6 of them, and put a stop payment on them.

Well, it's now Feb 2013, and they're still trying to take payments out of our account, so my husband finally figured it was time to call them, find out why they haven't figured out their clerical error, and why they're still trying to bill us for something that should have been paid over a year ago.

Well, that's when we found out that they're charging us $150 for the NSF fees (7 during the contract, which is why we paid an additional 7 months on the contract) and now an additional 6 for the stop payments. All in all, they're claiming we now owe them an additional $3700!

We never once received a bill from them, never once received a statement showing our balance. We just did the math ourselves, and when we (due to the payments) had realized we paid the amount agreed on, we stopped paying, or tried (they still got an additional 6 months worth of payments that weren't stopped.

We're at a loss on how to proceed.

Do we have a legal leg to stand on, or are we going to have to pay an additional $3700 to these people?

Those of you that don't know, I'm in Canada, Alberta to be exact. Please give me some good news. Lie if you have to.

[Alty]

Addition:

The contract does say that there's a $150 NSF charge. My husband was reading it while I typed out this post. So, for the 7 NSF charges we would be charged an additional $1050. Six $100 payments did go through after December, so $1050-$600 means we should owe $450. How they're coming up with $3700, is beyond me.

[Wondergirl]

Who is "they"?

Why no billing or any accounting process?

[Alty]

Who is "they"?

Why no billing or any accounting process?

They is the company we got the loan from, and I'd rather not post their name online.

Not sure why they don't send billing, or statements. They just never have. Must be company policy.

WG, no offense, but how do your questions help me? I know who they are, the legal experts don't need to know. I know we've never gotten a bill or a statement. Why? I don't know, and can't tell you. So how do these two questions help anyone give me an answer?

[Wondergirl]

Did you check out this company before getting the loan? Are they reputable with no previous complaints?

Why did you choose them?

I have never had a loan without paperwork, monthly tearoffs to send in from a payment book, regular accounting, so that part scares me about your situation.

[AK lawyer]

Or perhaps they don't have your correct mailing address.

[Alty]

Or perhaps they don't have your correct mailing address.

They have my mailing address, my email address, and everything else. They sent us a statement today (as per our request) via email. If you'd like I can get them to sign an affidavit stating that they have never sent us a bill or statement.

I know it's hard to believe, but really, in the almost 6 years since we got the loan, we have never once gotten a statement.

I should add, we paid $100 a month, 4 year contract, for a $2440 loan. Ya, do the math. Hubby got taken. He may as well have had "sucker" written on his forehead.

I didn't agree to this loan, and my name isn't on it. Hubby went, he signed, and told me about it after the fact, long after the fact. I can tell you that I was not impressed, and I'm even less impressed now that we're dealing with this! :(

The loan company works with the people that did the lasik. Hubby went in for a consult, wanted the surgery, saw the cost, said he couldn't afford it, they said "we can get you financing", they made a call, he was approved, and didn't read the writing until afterwards. Many weeks afterwards, when his eyes focused again. Me, I just read the contract today. :(

But really, does it matter? He signed the stupid contract, he made the payments. Until today I had no idea we were even still paying on this stupid loan, and I didn't know the details of the loan. I had no idea that we were getting fleeced this way! But now I have to deal with it, and I don't know what to do!

[Wondergirl]

First thing I would do is figure out if they are correct according to the terms of the contract he signed. I also would find a way to stop more charges from accruing.

Do you have to pay this off to stop the parade? Are charges still being piled on as late fees?

[Wondergirl]

Does the contract spell out the interest rates and the increases for missing payments?

What percent interest rate are you paying now?

[Alty]

First thing I would do is figure out if they are correct according to the terms of the contract he signed. I also would find a way to stop more charges from accruing.

Do you have to pay this off to stop the parade? Are charges still being piled on as late fees?

Pay it off and then some.

Apparently they're also charging us $150 each for the stop payments, which is why it's now $3700! So, we either pay the money they say we owe, with the same interest rate as the original loan (do the math, a $2440 loan for 4 years, $100/month, well, that's a pretty high interest rate) and end up paying almost $8000 more, or we continue to stop payments, hope this is settled in our favor, but risk incurring even more NSF charges, bumping up the amount owed.

[ScottGem]

Here's the thing. Apparently he agreed to direct debit for payments. That's why there were no statements. I have a similar loan on a time share.

What I'm afraid is inflating the balance is interest. Clearly, the loan had an interest rate. That's why you were to pay $4800 (4 years @ $100/month) for borrowing $2440. I just did a quick amortization. It looks like the interest rate was over 38% to to total $4800 over 4 years.
So that's the first thing I would check, see what the legal rate of interest is.

Now lets say you bounced just 1 payment at the beginning of the 2nd year of the loan. So they add the $150 fee to your principal. That would add almost FIVE more payments to loan Another $500. And you said you incurred 7 NSF charges. I can easily see how interests charges could easily add up to another $3700. If I knew the exact months you missed I could run the numbers more accurately. Or I can send you the spreadsheet so you can do it. And that's not including the charges for the stopped payments after the 4 years. And yes the contract could hold you responsible for them.

I'm sorry my friend, that the news is bad. So here's what I would do. First, as I said, check the usury laws in Canada, 38% sounds illegal, I think it would be in the US. Never mind, I just checked, its 60% So scratch that idea.

So what I would do is try to work out a settlement. See if they will accept a lump sum of 1/3 to 1/2. At the very least, see if you can get them to stop the interest from accruing and just pay off the current balance.

[Alty]

Thank you Scott.

I'm willing to send you the statement they sent us today. I won't post it on this site since there is info on it that shouldn't be posted online. I will add that according to the statement they sent today, we owe $617.86. The person hubby talked to said that the NSF charges and interest have not been added to the statement they sent, that with those charges we owe $3700. In other words, the $617.86 is from the original loan, which doesn't make sense. That should have been paid in December of 2011, if the NSF charges weren't added.

I have to admit, trying to figure it all out is not easy. Their statement is not easy to decipher.

I did suggest to hubby that we try to settle for a portion of the bill. He's against that, because he feels like he's right, they're wrong, and it's the principle of the thing. I tried to explain that principle doesn't matter right now, that if he refuses to deal with them, we could be out a lot more than the $3700 they say we currently owe.

Also want to add that the contract does say that NSF charges will incur a $150 charge, but it says nothing about charging for stop payments. Does that matter?

[ScottGem]

No I don't think it matters, NSF or stop its all the same to them. And I'm afraid hubby is wrong. He signed a contract. The contract sounds like its very clear.

And yes, still owing on the original balance makes sense to me. Like I said, just one NSF could add $500 to amount you owe. I'm afraid if they sue they will win.

[Alty]

No I don't think it matters, NSF or stop its all the same to them. And I'm afraid hubby is wrong. He signed a contract. The contract sounds like its very clear.

And yes, still owing on the original balance makes sense to me. Like I said, just one NSF could add $500 to amount you owe. I'm afraid if they sue they will win.

In that case, do me a favor and shoot me. :(

We just got ahead. We just got our heads above water! Now this! I don't know if I should scream, cry, or go postal!

It's never ending! Who the hell did I screw in a former life that this bad karma keeps following me around? I'd really like to know when they're going to be done getting their pound of flesh.

Yes, I realize this isn't a personal thing, it's a legal thing, and hubby screwed the pooch big time, and now we'll pay. All of us. He better enjoy his eyesight, because those are some damn expensive eyes! Glasses would have been cheaper, and paid for by his work.

Thanks Scott. I appreciate your advice. I just wish it didn't make me want to crawl in a hole, cry, and kill something (you know that's a joke. I'm in Canada, the only thing I get to kill are mice, flies, and mosquitos).

Going to go have a good cry now.

Thanks everyone.

[cdad]

You may have an out in all of this. This is where your going to need to break out the glasses and read the fine print. The contract he signed was for repayment of a loan and in that paperwork he authorized them to take an amount from your account. Depending on how it is written they may not have the right to take the other charges directly from your account and should have been billing you for it. If that is the case then you wouldn't owe the NSF charges. Im not sure without doing more research or seeing the original contract but they may be doing something that isn't entirely legal. Also you might want to consider changing accounts to another bank and then you gain control. It is a ahrd line attitude but it sounds like he went through a shady loan company. Here in the US they don't charge interest if its from a medical condition. I guess that is one big difference between our health systems.

[Alty]

Dad, thank you. I'll definitely read the fine print. Thanks to that same surgeon, I also had lasik, so my vision is 20/20. We paid cash for mine. A much better deal than hubby got.

The only thing in your post that's not right, is that this wasn't a medical condition. He had lasik eye surgery, so he could stop wearing glasses. It was elective surgery. :(

[cdad]

Dad, thank you. I'll definitely read the fine print. Thanks to that same surgeon, I also had lasik, so my vision is 20/20. We paid cash for mine. A much better deal than hubby got.

The only thing in your post that's not right, is that this wasn't a medical condition. He had lasik eye surgery, so he could stop wearing glasses. It was elective surgery. :(

Yes but its still done by a doctor (medical procedure). It would be like elective anything medical which includes dental. In the US unless you get a private loan those offered by the doctors office or hospital are interest free.

[cdad]

You may want to consult a barrister in you area. It seems this contrat that you entered into may be able to be recinded. Or they may be liable to you for charges in a lawsuit.

Canadian consumer law:

Unconscionable representation

15. (1) It is an unfair practice to make an unconscionable representation. 2002, c. 30, Sched. A, s. 15 (1).

Same

(2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person's employer or principal knows or ought to know,

(a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;

(b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;
(c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;
(d) that there is no reasonable probability of payment of the obligation in full by the consumer;

(e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;
(f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;
(g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or

(h) that the consumer is being subjected to undue pressure to enter into a consumer transaction. 2002, c. 30, Sched. A, s. 15 (2).



Ref:

Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A

[Alty]

Thank you so much Dad.

Great info, and for the first time since I found out about this, I have hope.

Thank you.

[ScottGem]

It can't hurt to consult a lawyer (I don't think Canada has the same solicitor/barrister system the UK has and a barrister only gets involved if it comes to trial). I don't want to dash your hopes but I think what Dad is referring to is a long shot. On the other hand, it may come in handy to get a settlement.

I think the lender is going to look at this like, just getting their money back will be better than having to pursue it in court.