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.

Advice from CAB

Today I went back to see CAB about my problems with Paragon.

I took along a copy of my consumer Credit Agreement that I had obtained from Paragon. CAB made some calls to experts and came back with the news that the contract wasn't enforceable. They advised not to pay Paragon and to try and force them into taking me to court as they would likely loose.

Enough is enough. Paragon Personal Finance.

Last month I had a phone call from Paragon asking to increase my payments again. After a long discussion with them I said I was really unhappy with how they are handling my account and asked what they could do about all the interest they have added. As usual they did not seem interested in discussing my account, I was told I had 2 options, increase my payments to what they wanted or send in an income and expenditure form and they would decide how much I could afford each month!.

I explained I was already paying more than I could really afford (£215 a month) and more than the original monthly payments. I asked how a £4200 debt had turned into a £13k debt (plus the £15k I have already paid) and they said they couldn't comment on the account.

After about 30 minutes I told them I wasn't going to increase my payments and hung up. I wasn't getting anywhere, they wouldn't say how much I still owed or even how much interest they are charging. They did say something about capped payments, but that has been mentioned every time they call since 2003 and nothing has ever come of it.

This month I sat and thought about it, I have already paid back the debt four times over and still owe something like £13,000. I made the decision to stop paying, what's the worst that could happen? They could take me to court and I'd get a chance to explain all of this to the court.

Today I got the dreaded call from Paragon. "we notice you haven't paid this month". Once again I had to run through my entire story, how much I have paid, how CAB agreed for the interest to be frozen. Once again I got nowhere with them.

Received CCA from Paragon

I recently sent a letter to Paragon requesting a true copy of the consumer credit agreement under the 1974 act.

In return I received a photocopied application form which seems to have been changed as some of the handwriting is not my own. I also received this CCA which appears to lack a date or any signatures. My next step is to find out if it's enforceable.

The covering letter states -

Thank you for your recent communication regarding the above account.

Please find a photocopy of the original credit agreement as requested. If you require any further information may I suggest you contact this office on the direct line number.

Yours Sincerely

Glen Browne

Customer servicing officer

Introduction

This is my story of how Paragon finance have turned a £4200 debt into a £25,000 debt that gets bigger every month. I'm not alone, there are many similar stories on the Internet.

12 years ago in 1995, I took an unsecured loan with Universal Credit (at that time part of TSB). I wanted to borrow £3700, the condition of the loan was I paid off an existing car loan with Abbey National which stood at £2300. The total borrowed was £6000 with monthly payments of £142.

All was well for three and a half years until I lost my job and couldn't afford the payments. CAB (Citizens Advice) negotiated with them on my behalf and the interest was frozen, I was paying reduced amounts each month. At this point my balance owed was £4212.47. My reduced payments started at £1 and quickly increased to £10 and then £20.

Paragon brought Universal Credit for £25million from the Lloyds TSB group and transferred the debt into their own name. I received a letter saying if I continued to pay the agreed amount by direct debit they would update my credit file to say the account was up to date. Nothing was mentioned about interest. At this point Paragon agreed to my monthly payments of £20 after sending an income and expenditure form.
On checking my credit file I discovered they had actually removed the debt and have never entered anything about it since.

Another couple of years went by, I was now paying £145 a month. At this point I requested a statement to see how much I owed. Paragon are not keen on giving you a balance and after several calls they eventually agreed to supply this for £25.

The statement arrived and I was very shocked to discover they had added interest back to the point when CAB had negotiated for the interest to be frozen. At that point I had owed £4212 with the interest I now owed over £12,000 and the monthly interest was more than my £145 was covering. The debt was rising each month.

At this point I realised I had to do something about the debt, so increased my payments to £176 in the hope of actually reducing the debt. A few years went by with little difference to how much I owed.

Paragon phoned me in Juky 2007 asking for increased payments, They said I had to pay £205 a month. I agreed to this on the condition they reduced the interest and didn't keep asking for higher payments. They sent a letter saying they would consider reducing the interest after 3 months of payments. I increased my payments to £215 (more than they had asked for) and never received confirmation they had reduced the interest.

Six months later they called asking for more each month. They constantly refuse to say how much interest they are charging. My balance now stands at over £13,600, that's after all the payments I have made which add up to £15,227.27. If I paid off the debt today I would have paid £28,227. , that's a whopping £22,000 interest!

This debt has already been with me for 12 years, I have already paid the debt about 3 times over and still owe nearly 3 times what the debt stood at when Paragon took it over.

In 1999 I had debts with several other lenders, all of these froze the interest and accepted reduced payments for the first couple of years. All but Paragon have since been paid in full. Paragon would also have been paid off in full many years ago if they hadn't added all the interest.