Not upheld: early settlement figure calculation accuracy and complaint handling delay complaint against East End Fair Finance Limited trading as Fair Finance

Decision detail

Summary

Mrs M complained that Fair Finance provided an inaccurate early settlement figure for her £400 instalment loan and ignored her queries and complaint. The ombudsman examined the settlement calculation of £322.46 against the credit agreement and statement of account, finding it was correctly computed under The Consumer Credit (Early Settlement) Regulations 2004, resulting in an interest saving of approximately £98.24. The ombudsman acknowledged the significant 8-month delay in Fair Finance's complaint response but determined that complaint handling procedures fall outside FOS jurisdiction. The complaint was not upheld, though the ombudsman noted Mrs M may seek assistance from Fair Finance regarding the outstanding balance.

The Ombudsman's reasoning

The ombudsman applied The Consumer Credit (Early Settlement) Regulations 2004 to verify the settlement calculation. The calculation was found to be accurate: Mrs M had paid £330.50, the outstanding balance was £420.70, and the early settlement figure of £322.46 was correctly computed with a statutory interest rebate applied. The ombudsman noted that interest is not applied equally across monthly payments but rather on the outstanding capital balance, which is standard practice and disclosed in the credit agreement. Regarding complaint handling delays, the ombudsman determined that complaint handling procedures fall outside FOS jurisdiction and therefore cannot be investigated or remedied, despite acknowledging the significant 8-month delay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website