The ugly face of debt: working with the banks

Most of us have been or are still paying for various loans. We decided to ask for ‘help’ to be able to fund a business, a new car, a house or whatever we couldn’t pay for in cash at the time. Sure, some of us might not have been to smart when it comes to taking on loans, but the deal’s been done and we had/have to pay.

When you sign the papers, everything is pretty clear: the bank is lending you the money, you have to make x payments, maybe there are minimums,  maybe you have fixed payments, there’s an interest, maybe some fees (some hidden or not) etc. Ideally it should all run smoothly, you pay off the debt and everyone walks happy.

And yet it doesn’t always happen this way.

1. Situation no.1: made the payment in another account (same bank), never got the money back

After signing for my car loan with UniCredit (an European bank I clearly DO NOT recommend working with), I started making the payments for my car. I’d have to pay the normal fixed rate (130 Euro) each month, plus 150 Euro every 3 months for my premium insurance they forced me to take on. Yes, the insurance was almost 1/4 of the car price (which is very high, compared to how much we usually pay if we don’t use this system).

4-5 months into payments, I make the payment for my fixed rate in its account and by mistake send the insurance money in the same account. Yes, it was my mistake, agreed on that. The 2 accounts are on the SAME bank though, something like no. xxxx01 and no. xxxx02.

Few weeks after I receive a call from the bank that I skipped my insurance payment. I talk to the lady, give her the transaction no. and she’s saying ‘ah, it’s in the other account, let me check and it’s all fine’. Well it wasn’t fine. Until this day they never bothered move the money to the right account or send it back so that I can make the payment correctly. I had to pay once again for the money and the bank never bothered refunding the ‘wrong’ money, as any normal institution would do.

I mean, if I have 2 accounts and you send the money into the wrong one (even if it’s used in the same contract), I either make a note and move the money myself or refund it and ask you to send it to the right account. Sure, for them this doesn’t work like this, so 150 Euro got ‘lost’.

Lesson: ALWAYS be careful where you send the money, some banks won’t have an issue with ‘trapping’ the money and pretending it never happened.

2. Situation no.2: we had a deal, but I had to pay extra

Back in 2010, the VAT in my country went from 19% to 24% (yes, you read it right, it’s one of the biggest in the world). My contract was initially signed for 19%, which was used for each monthly payment calculation. The moment the VAT turned 24%, my bank IMMEDIATELY calculated my rates based on the new numbers. So I paid for it from the moment it became official.

Imagine my shock, when, at the last payment (when I was also closing the contract with the bank and then taking the car in my name), I received an invoice for around 40 Euro (‘VAT difference calculation’ or something like this). My husband was crazy angry with them, since he knew I had paid everything under the sun and the moon, including the damn VAT change. We had to choose between paying and just having it all done with it or starting a very lengthy process of contesting the fee etc. This would mean the car was still in their name, I couldn’t finish the contract and it would take god knows how much time.

Instead of this, since we were living the country in 3 weeks (and I imagined it will take some time for the contact to be closed and the car to be ‘moved’ in my name), I decided to pay and stop stressing about it.

Lesson: there can always be extra-fees, hidden commission and all kinds of money the bank will ask for you, even if you had a FIXED rate as I did. Always be prepared to deal with this crap.

3. Situation no.3: we closed the contract, but, if you don’t have the invoice, we’ll ask you again for the money

Fortunately this didn’t happen to me, but to my father. Back in 2011 he closed down a personal loan and made the last payment. I can attest to this, we were actually together there, since I was making my regular car payment (you guessed, it’s the same bank). He paid the last money asked from him and got the receipt. Which he so stupidly never bothered keep, since he knew he’s all nice and dandy with the bank.

Guess who received 1 month ago, after more than 2 years, a notice from a collection company, that he still owes $150. As you again guessed, NOBODY bothered mention anything to him all this time (he never received any invoices or notification that he still appears in the system as someone who skipped the payment. 60% of this money is the penalties/interest they freely added, while my father was at peace that he didn’t have any debt.

He went to the bank to find his records there, but they weren’t still able to see the exact payment. He did appear there in some instances, but with the wrong CNP (some sort of a Social Security Number). Even if we both knew he paid the money, as long as they couldn’t find the correct payment in the database, they claimed he never paid. Our word against their messed up records. So yes, my father had to pay AGAIN. I hope this time he’ll keep the receipts till the day he dies.

Lesson 1: people are idiots and will make mistakes with your records. ALWAYS check to make sure they didn’t misspell your name, didn’t screw your SSN, the account or whatever else they can mess up, because they will. And when the bank doesn’t pay attention, you’re the one to pay the money (again).

Lesson 2: ALWAYS keep the receipts. Even if they couldn’t find the records, as long as my father had their receipt (with the signature, stamp and everything else), if they wanted more fun (even to take legal action), we could have broken their necks. If we didn’t have the proof, we had the pleasure of paying them again.

One of the reasons I’m now so ‘against’ debt is because of all the crap we had to take these years from the banks. Sure, you can sue them and many people in Romania are actually doing this. The banks have abusively changed the contract terms, added new fees, changed how the interest is being paid etc., so many of the people who had to deal with this are now taking legal action. And most of them are winning. This does take money and A LOT of time (our Justice system is moving at a snail’s pace), so there are still many who just swallow the hard pill and, just as I do, vouch to never deal with these sharks again.

If my debt payment was all nice and not so eventful, I might have not be left with such a sour taste in my mouth. I had to deal with people who never bothered solve any of my issues, who charged me for things we never agreed on, who even made mistakes when my father paid them and had the audacity to come ask for money again, I had to deal with disrespect and carelessness.

As I was trying to solve my contract issues (as I was in the US), one of their employees, who was supposedly my ‘credit officer’, told me to get to their office, since he didn’t have the time  to discuss it with me. I had to start yelling to him that I’m thousands of miles away and can’t just go to their damn office for something that I could discuss over the phone, not to mention I was paying 2 bucks/minute (and was already on hold for 20). After I raised my voice (and also threatened to contact the ‘consumer protection’ – there’s an authority here that companies kinda fear) he found 2 minutes to provide me with the details he HAD to provide anyway.

So, always be on the lookout for trouble. They’ll steal your money, change your contracts, disrespect you and most of the time you can’t do anything about it but pay and suffer until the entire ordeal is over.

Your turn now. What did your bank mess up with your debt payment? Are you some of the happy people who never had anything like this happen to them?