25 August 2005
The need to be careful when choosing the right loan for your personal circumstances was reinforced this week.
A retired couple who thought they had repaid a £13,000 loan they took out in October 1990 were shocked to find themselves hit with a charge of £9,556.
Mr and Mrs Bullen told This is Money that the request from their lender, CMR Loans Servicing - part of GE Consumer Finance, to make an additional 82 monthly payments of £189.22 would have kept Mr Bullen working until he was 74.
The debt accrued because Mr Bullen missed some direct debit payments and each payment missed incurred a £15 fee. Along with arrears letters administration fees and telephone call fees yielded a shortfall of almost £10,000.
Luckily for the Bullens, their lender relented and agreed to charge them £1000 instead.
Carol Riley, founder of advice group the National Association of Mortgage Victims, told This is Money: "We estimate that up to 50,000 people could be in for a shock. The majority of these loans were taken out by vulnerable people in the early nineties so they are only just realising they may have a problem."
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