Paragon send a statement

After many attempts at getting a figure of exactly how much is owed on the account I finally received a statement from Paragon. Normally they don't like to tell you how much interest they have been adding and always refuse to give a figure on the phone.

The statement shows the account was opened on 27/03/1995 with a balance of £6000. Monthly payments of £142.41 continued until 03/01/1999 when I first visited CAB to seek advice about debts I could no longer afford. At this time the balance was £4212.47.

CAB made an agreement with Paragon (and Barclays who I also had a debt with) to receive token payments of £1 and for the interest to be frozen. Paragon agreed to this (as did Barclays). Barclays kept their agreement and the balance was paid in full some time ago. Paragon kept me in the dark, they added interest without informing me.

The first reduced payment was made on 03/02/1999 for £1, Paragon added £86.28 interest (but I didn't find out about this until many years later). By the 26/11/1999 I increased my payments to £10 per month. Paragon added £109.74 in interest that month. At this point Paragon wrote to me and said they would consolidate my arrears if I agreed to pay by standing order. No mention was made of the balance or of interest being added. By this stage the balance was over £6000.

Payments at £10 by standing order continued until October 2002, by which time Paragon added £192.87 for every £10 I paid. I upped the payments slightly to £15 and then £20 a month, Paragon added £240.38 a month in interest, by now the debt was spiraling out of control, but I still though the interest had been frozen and Paragon happily accepted my reduced payments.

On the 25/02/2002 I agreed to start paying the full monthly amount as I had largely sorted out my fiances. What I didn't know was my balance was now £13,203.54. I started making payments of £145 a month in the belief I was now paying off the debt and would clear it within a few years. I carried on paying £145 a month until 11/01/2007 when I discovered the balance was £12830.62. Only slightly less than four years earlier. The reason was Paragon lied about the interest and all I was doing was clearing the interest each month.

From 05/02/2007 to 12/05/2008 I paid £176 a month. Then after taking some legal advise I was told to let Paragon take me to court.

My total payments come to £15,227.27. Paragon claimed I still owed £12,000

Legal threats from Paragon

Today's letter from Paragon included a threat of legal action.

13th August 2008

Dear XXXXXXX

I am very concerned you have chosen to ignore previous letters.

We are here to help you but can only do this if you make contact with us so we can discuss any difficulties you may be experiencing.

It is now essential therefore that you contact me upon receipt of this letter.

If this letter is ignored, I can only presume that you do not require assistance and you simply have no intention of making payments on your account. If this is the case then I would advise you that we have no alternative than commence legal action against you.

Please be advised your account may be charged a fee should we be required to write or call you regarding outstanding payments.

I would urge you to read this letter carefully, fully considering it's potential implications

Yours Sincerely

Jessica Smith

collections officer.

I have since contacted Paragon to invite them to commence legal action as I would like to get this before a judge due to the large amount of money I have already paid to try and clear the debt.