QLD Pioneer Cedit debt interest

[Carol Berthelsen]

Hi,
I am just looking for some advice on a situation with Pioneer Credit. I have a $1200 Debt from 2 years ago by Westpac. I arranged a payment agreement of $25/week as it was all can afford at the time due to financial hardship. Arrangement was made in Dec 2016, I want to get the debt cleared so I went through my banking history calculating a total of $925 paid. I thought I'd give them a call and get the remainder paid and finalise yesterday. Well....turns out I'm paying 19.2% annum in interest and outstanding amount is $850, so all this time in the agreement and I've only made less then a $400 dent. I was not impressed as NEVER in any conversation or letter was it disclosed that I would be paying interest on the account. I had no idea as I do not receive any statements from them. If I had of know I would've borrowed money off family and paid it in full instead of dragging this agreement on for years. I have never had to pay interest on any debts before, so my question is. Can Pioneer Credit do this without disclosure and if so is that percentage of interest justifiable???

 

[Rob Legat - SBPL]

How do Pioneer Credit come into the picture if your debt is with Westpac?

When you go through the hardship process, it results in a change to the existing credit contract - it doesn't replace it. You'll need to look very specifically at the terms of change made on hardship. Westpac may have agreed to reduce your repayments to $25.00 per week, but if nothing is said about interest rates then they don't change. This can have the effect of pushing the term out, and this is anticipated in the hardship process.

As for the rate of interest itself, this must be supported somewhere in the credit contract. I suggest you check them carefully. There would certainly have been some mechanism for Westpac to charge interest on the debt, it's a fundamental premise of how lending works.

 

[Phanelope]

Hi, I am handling my mums estate and I have actually just received a letter today from Pioneer. This letter also did not mention anything about interest, however the collection agent is claiming there is $400 in interest owing on top of the initial amount (without documentation). This was from a commonwealth bank credit card.