August 15, 2022

Should Peverel customers pay up using Premium Credit?

premiumcreditCampaign against retirement leasehold exploitation readers have been in touch saying that if they wish to pay their Peverel service charges monthly by direct debit they must now enter a loan agreement with Premium Credit.

Details are sketchy and Peverel says the payment system has been in place for more than 10 years and there is no change in policy.

Those using Premium Credit pay a one-off transaction fee of 3.65 per cent of the loan amount, with a minimum fee of £15. Interest payments are obviously on top.

In turn, Peverel Retirement receives 0.05 per cent of the fee collected by Premium Credit, which “covers administration costs associated with the service”.

“This is explained in the information sent to customers by Premium Credit,” says Peverel.

Unlike direct debit payments to Peverel, using Premier Credit means leasehold residents are taking out a loan. If service charges are £3,600 and a resident pays over 12 months, they will be agreeing not to what might be thought of as normal staged payments but instead a loan agreement for £3,600.

This may come as a surprise if you have been paying Peverel directly with direct debits. Pensioners belong to a generation that has an abhorrence of debt.

It also begs the question: what should retirement leaseholders do if their flat becomes uninhabitable for some reason, such as a Gibson Court-style fire? Are Premium Credit customers to go on paying even though those who pay half-yearly directly to Peverel may have stopped?

“In this instance our first priority would be to ensure people could return to their homes,” says Peverel. “We would, of course, help address any concerns they had over payment of fees.

“We would not treat customers who have agreements with Premium Credit differently from customers using one of our other payment methods.”

All of which sounds nice, but doesn’t answer the question.

Campaign against retirement leasehold exploitation advice: pensioners should not be taking out loans to pay their service charge.

Comments

  1. Michael Epstein says

    Since the use of Premium Credit for direct debits mean that rather than a monthly payment into a service charge account the whole amount is paid in one payment, could Peverel clarify as to whether the whole payment from Premium Credit is credited to the service charge account, or is the whole payment credited to Peverel who pay monthly into the service charge account?

  2. In March/April, Peverel sent me a leaflet insisting I can no longer pay my ground rent and service charge by Standing Order and I must now pay these charges by Direct Debit through a private loan company Premium Credit that I refuse to do. I would not implicate myself in such a dubious set up, as I would be subjected to a fee taken or credit search history, when I don’t even have a credit card or ever intend to!

    As a consequence, these charges are now being returned to my bank account. For some strange reason Peverel kept the ground rent only for April but returned all the other payments for April and May. I am saving all the returned money into a separate internet bank account. Why should I be forced to pay postage to send the payments by cheque? I wouldn’t pay Peverel by Direct Debit either, even without the Premium Credit being involved, because I would have no control over the payments and where the money might end up if Peverel went under?

  3. Michael Epstein says

    It would be interesting to know if Peverel Group has a Direct Debit Service User Number, or do they have to use Premium Credit’s Service User Number?

  4. Bank account holders can pay any type of bill directly through the online internet banking service and, since Peverel sent me all their new Nat West bank account details, I’ll have another try sending the ground rent and services charges – now in arrears – by that method. It will be interesting to see what happens but I wouldn’t be surprised though if it boomeranged back into my account! It it does I will certainly make an official complaint. What an absurd situation.

  5. Campaign against retirement leasehold exploitation says

    From DJ:

    The more interesting point is the legal one. If the service charge debt is financed by a debt agreement with the lessee, how does this affect the statutory rights? I assume the debt agreement is a ‘consumer finance agreement’. On execution of the finance agreement the service charges for the ensuing year are presumably paid in full to Peverel by PC. One must assume that PC then has the right to execute that debt agreement regardless of whether or not the service charges prove reasonable. What happens if the charges prove to be unreasonable and the lessee wants to challenge them? The finance agreement is a seperate obligation and must presumably be paid irrespective of any dispute with Peverel over the validity of the charges? Or can the lessee stop paying on the grounds it has not received the goods/services supplied under the contract? Do normal consumer rights apply? If the charges are subsequently found to be unreasonable who repays any refund to the lessee, PC or Peverel? In another situation, if the lessee defaults in payments, presumably the only right of enforcement against the lessee is the normal route of dent recovery by PC but NOT right of forfeiture etc, as Peverel has already had its monies and has no grounds to seek forfeiture or other right of recovery. What happens of in the interim the flat is sold? Can Peverel withhold its re-sale certification on account of monies still owing to PC? Does the debt get settled on resale or does the sale proceed leaving PC to recover its debt independently? I havent thought through all the implications but it seems to me some questions should be asked!