HSBC Watch News Release Forum Index
Forum Name: - Yamaha
Topic Title: Yamaha Balance Never Goes Down
Sun Dec 19, 2004 1:41 am
3 years ago I opened an account with Yamaha for a motorcycle. The amount was for $6,000 dollars. Of course the first bill was late, and I was charged a late fee and forced to pay the 2 months, even though I was told the first statement would average 1-2 months after the purchase date. It didn't matter what I was told - now they were telling me I was late.
Also after 3 years of $134.00 monthly payments the balance went down $500.00 at a 17% interest rate. I calculated that we paid $4900 in payments and the balance went down only $500. That sounds a bit off. HRS is a company that gives people with a history of good/excellent credit a bad credit history.
Sun Dec 19, 2004 12:46 pm
3 years ago I opened an account with Yamaha for a motorcycle. The amount was for $6,000 dollars. Of course the first bill was late, and I was charged a late fee and forced to pay the 2 months, even though I was told the first statement would average 1-2 months after the purchase date. It didn't matter what I was told - now they were telling me I was late.
We see too many reports where the first statement was not the first billing cycle and late charges had accrued. All too often the "borrowers" know the payment was due, and relied on the billing statement to provide the account number, payment address, and customer relations telephone numbers. Without that information the borrower can't make any payments and generally the dealership where the purchase was made is in the dark, because Household satisfied their requirements when the loan was made paying for the merchandise. There is also the point of "on-going compensation" to the merchant where they get a percentage of the interest, fees, and penalties assigned by Household.
Also after 3 years of $134.00 monthly payments the balance went down $500.00 at a 17% interest rate. I calculated that we paid $4900 in payments and the balance went down only $500. That sounds a bit off.
Using our payment calculator, the term on the loan should be 72 months, based on the original figures for the loan and payment. At 36 months the principal should have been $3745.65, a reduction of nearly $2300.
Now here is the rub -- the payments must be on time and late charges must be paid every month or the next payment is applied to previous fees and the shortfall is added to the principal balance. Every month the loan accrues interest at the loan rate, or sometimes even a default rate. Even though payments are made, they are not enough to pay penalties, additional interest, and pay any of the principal. This results in a negative amortization. In other words you will owe more in finance charges and fees than your initial purchase. When you throw in depreciation of the purchase it puts the borrower "upside down" in the loan, or owing more than the adjusted resale of the product.
HRS is a company that gives people with a history of good/excellent credit a bad credit history.
When your first payment is late through no fault of your own, due to no billing statement and not having the information available to make your payment, it starts the cycle. The account is not adjusted to waive the penalty and payment is not adjusted to include the late fee and interest, the borrower is going backwards in paying anything off on their bill.
We also know the borrowers have little or no control of how and when their payments are credited to their accounts. Many of our complaints include finger pointing at the postal service for delays in delivery. It should not take 10 days for a mailed payment to be received and processed. We recommend using the USPS Delivery Confirmation to see when the payment was delivered and received by the HSBC/Household processing center for future appeals to late fees.
Sat Jan 29, 2005 4:28 pm
If you balance is not going down, here is an article you may want to read. It is called "Welcome To The World Of “Upside Down” Motorcycle Loans!" from a website http://www.motorcycle-financing-guide.com
Here is a link to the article:
http://ezinearticles.com/?Welcome-To-The-World-Of-“Upside-Down”-Motorcycle-Loans!&id=8966
We monitor customer trends for possible violations of Regulation Z and other possible illegal actions.