Interest frozen and then added back later?

As you'll see from Paragon's letter above, they claim Universal Credit had a policy of suspending interest only to add it back later! I have never heard of this before and fail to see how that is of any help to anyone. CAB negotiated the interest free terms on the debt when I run into difficulty, they also arranged the same terms for a debt with Barclays. Barclays never added the interest back later, and I managed to clear the Barclays debt within a few years.

Paragon also seem to be forgetting that they purchased Universal Credit in March 1998 (it even says so in their letter above), I didn't run into difficulty until the end of January 1999 and it was Paragon who CAB negotiated with, not Universal Credit. It was Paragon who in fact charged interest from the start on the reduced payments.

Paragon go on to say they reapplied the suspended interest in November 1999, at which time I was still in great difficulty meeting the payments due on my various debts. I was paying Paragon £5 a month and they charged me £96.24 in interest without telling me. They happily accepted my £5 token payment and never once mentioned the interest had been reapplied.