Dispute with my business loan - Do you think I'm being reasonable?

['chelle]

Ok I know this is re my business loan, but I'm putting this in chit chat because it's not really the business aspect of this I want to talk about. Please can you geeks give me an honest opinion as to whether you think I'm being reasonable with the following dispute:

I'll condense this as much as I can:

I have a business loan from the Chamber of Commerce. As a condition of this loan I have to participate in a mentoring programme, this consists of a business advisor coming to see me once a month, I get 2 hours per month and for this I pay £50 plus VAT per month (in addition to the loan repayment).
Basically, the business advisors are slack. I have to constantly ring them and chase them to find out when they are coming to see me, when they do come they are worse than useless, they have no specific knowledge of the nail industry, and in all they are a waste of space.

Last month, a business advisor did not contact me or arrange to see me, yet their bill for mentoring in November still arrived with me promptly. This bill was due out of my account by direct debit at the end of this week. I've tried to contact them by phone to discuss this but no one called me back. I went to the bank today to cancel the direct debit and rang them to tell them what I've done and why.

Miraculously, someone called me back within the hour. I was told that the loan contract states that I must participate in the mentoring programme and that as such if I cancel the direct debit I'm in default on the loan (I'm not - the loan is up to date and that direct debit is still in place). He said that whether I get mentoring or not, I still have to pay the bill, and that is purely based on the contract saying I have to participate in the mentoring programme.

Here's my view: participating means receiving and paying for mentoring. By them not delivering the mentoring they are in breach of the agreement anyway, and they cannot reasonably expect me to pay for their breach of agreement. I notice that in the contract, if I receive more than 2 hours mentoring a month, they can charge me for it, but they are telling me that if I receive any less than 2 hours it's tough I still have to pay for it.

Thing is, I used to be a legal executive, employment law was my area and this ties very closely in with contract law and I feel very confident that I have a good case. I'm very tempted to stick to my guns, let them default the agreement and let it go to court so that I can get this resolved legally. Of course, if in the meantime they agree that I shouldnt pay for what I dont receive that would be great, but they havent exactly played fair so far so I dont expect them to start doing.

What does everyone think? Am I being reasonable? What would you do?

 

[Ruth Mills]

Sounds reasonable to me. The Chamber of Commerce isn't a bank, and it seems strange that they are asking you to pay £50 for non-existent mentoring - I'd be in agreement with you that they are in breach of contract for charging you the £50 for mentoring and you getting nothing in return...

 

[loubylou]

You are been reasonable and in my eyes you are right,
without your knowledge i would still think this is a breach on their behalf as they have not delivered on their contracted promise,
i would stick to my guns, not pay them and take it as far as is necessary hth

 

[Sassy Hassy]

You know if that was me I'd be paying a little trip to my MP. You are paying for a service that you're not receiving and that's not good enough.

 

[fiona wallace]

Here's my view: participating means receiving and paying for mentoring. By them not delivering the mentoring they are in breach of the agreement anyway, and they cannot reasonably expect me to pay for their breach of agreement. I notice that in the contract, if I receive more than 2 hours mentoring a month, they can charge me for it, but they are telling me that if I receive any less than 2 hours it's tough I still have to pay for it.

Whilst I understand where you are coming from, and completely agree with you on a moral and personal basis, I would have concerns regarding the above quote. You signed the contract on this basis. Take Sassy's advice and contact your local MP and try to get some free advice and back-up before you have to go the legal route.

Good Luck!

 

[ValencianNails]

...or possibly an appointment at your local CAB.

 

[bombini]

I would be inclined to take this further within the chamber of commerce as I do think you should pay the £50 BUT what is the point of paying it if the advisor is not doing their job.

Up until a year ago I met with a business advisor through the chamber of commerce and he was fabulous, I actually had his advice free of charge and I quite missed him when I wasn't entitled to the free sessions anymore !

Basically I would be saying that as the business advisor is not doing there job properly you shouldn't have to pay the £50 until they find someone that can do it. My advisor had no real knowledge of the beauty industry but he was still really good and it in no way affected his ability to help my business.

With regards to paying for it if you don't have the sessions then I can kind of see their point of view, its a bit like if a client bought a course of 6 facials off me then only had 5 I wouldn't be happy to refund one if they decided they didn't want it. I know thats not a particuarly good comparison but only one I can think of.

 

[skymark]

Sorry to hear that you are having such issues with these people. I think it's quie terrible that they would even make a contract like this, the 'mentoring' aside, basically what they are saying is that in addition to interest, they would like to make £50 extra a month off you and make it compulsory for you to pay.

If they haven't been keeping up their end of that contract i'm sure you have a case.

In the mean time, is there any chance of you obtaining a loan elsewhere so you can pay this one off and get rid of this whole 'mentoring' charge?

Hope you manage to figure it out

 

[AndyP]

I think really you should find a solicitor that offers the first consultation free, because if there the contract states you must participate in the scheme then you must pay the fee - however is there anything in there that says what you should be getting for your money and does it also stipulate the 'quantity' of your participation i.e. if it is a 10 year loan and you participate for two months during the term are in breach as you have participated in the scheme. Or does it state you ahve to participate & pay every month for the duration of the loan. This may also imo come under ' an unfair contract ' if the advice you recieve is useless and you can't get out of it.

 

[Zo Zo]

Miraculously, someone called me back within the hour. I was told that the loan contract states that I must participate in the mentoring programme and that as such if I cancel the direct debit I'm in default on the loan (I'm not - the loan is up to date and that direct debit is still in place). He said that whether I get mentoring or not, I still have to pay the bill, and that is purely based on the contract saying I have to participate in the mentoring programme.

I am cross on your behalf! What a twerp. This kind of thing happens so often, it's as though he is reading from a script and not actually thinking about the words coming out of his mouth. I would phone him tomorrow and ask for the name of his manager and speak to him/her. Unfortunately they may same the sme thing, but I would be tempted to just ask, 'Surely you can understand why I think this is unreasonable?'

It might be worth contacting Trading Standards.. I have no idea if they can help, but you have nothing to lose by asking them. You can email them. I did it recently it.. took them about 4 working days to reply, so not instant, but the reply was very useful.

 

[number1kitty]

I would demand another mentor that would be able to help and be more professional and when they do this you will continue to pay the £50. Put it in writing by recorded delivery. Then if they take it further you can use your letter as back up that you want the mentoring as you do not want your business to fail and any advise is worth its wait in gold, but its pointless if you spend hours out of your week you could use to earn money chasing these people then listening to crap advice!

Hope you get it sorted

Kate

 

['chelle]

Thanks so much for your replies everyone. There's actually more I could say about this but I condensed it so that the original post didnt turn into war and peace!

When I spoke to the business advisor today, he said "you wont necessarily get mentoring every month, we are short staffed etc and if you had something urgent to discuss you could ring us and we'd make an appointment to come and see you, but otherwise it wont always be every month". In the next sentence he said "participation in the mentoring scheme is a compulsory condition of the contract". Hmmm, so it's not compulsory when they cant be bothered to come and see me, but its compulsory when they want paying. Convenient eh?:lol:

Regarding the mentoring payment, I'm completely happy to pay for the mentoring provided it's delivered. When I signed the loan I did understand the condition about participating in the mentoring, but to me, participating means actually receiving the mentoring and paying for it, not just handing money over to them for no reason. To date this is the second mentoring session that has been missed and I paid for the first one (begrudgingly), but now I have decided that I have to draw the line. I'm a small business and I cant afford to throw money away, more importantly they are supposed to be there to nurture and guide my business, not rip me off!

With regards to paying for it if you don't have the sessions then I can kind of see their point of view, its a bit like if a client bought a course of 6 facials off me then only had 5 I wouldn't be happy to refund one if they decided they didn't want it. I know thats not a particuarly good comparison but only one I can think of.

I know what you are saying with this Bombini, but look at it this way: if I had booked the mentoring sessions but made my excuses and cancelled them, I would completely agree I should pay for them. Using your analogy though, what would you do if you had a client that told you that she was going to book and have a facial with you every month. She books in most months, but then one month she doesnt ring and book and appointment. Would you still send her a bill for a facial that month?

Regarding the payments, defaults, taking it further etc, I'm contacting the Office of Fair Trading tomorrow and the financial ombudsman for their advice. So far I'm advising the chamber of commerce in writing that I will not pay Novembers mentoring fee based on the fact that mentoring was not received in November. I have advised them that the direct debit will be re instated as of January (so that will cover mentoring from December onwards) but that I shall cancel it again should mentoring not be received. I cant see how they can default the loan to be honest because the payments are up to date and I've never missed one, but I'll see what the OFT have to say about what could happen and what I should do.

I'll keep you all posted!

 

[bombini]

Ive thought of a better example lol Gym membership, you still have to pay even if you don't use it, but I totally see where you are coming from and they are not providing their side of the agreement so I think you are right to question it.

 

['chelle]

Ive thought of a better example lol Gym membership, you still have to pay even if you don't use it, but I totally see where you are coming from and they are not providing their side of the agreement so I think you are right to question it.

With a gym membership there is no minimum attendance, you just go when you want, so provided the gym is available to you at all times you have to pay and I agree that this is reasonable.

In my case, I have spent so much time having to ring these people to find out "will you be coming to see me this month", then getting a vague reply along the lines of "someone will be in touch", then getting excuses about staff shortages, which results in no one turning up at all. The very essence of our contract is that they are my business mentors, they are meant to be guiding me, it's not my place to have to chase after them and make sure they are doing their jobs properly. As far as I'm concerned I have made reasonable efforts to participate in the mentoring programme, but this effort has not been matched by them. Because (in my view) they have made the mentoring service unobtainable, I believe that I have a right to not pay for those mentoring sessions that I dont receive. Using your gym analogy, I believe that what has happened with me is more along the lines of you taking a gym membership, then the gym being closed for a month for repair work, but they still want you to pay for your gym membership during that month.

 

[Jaffacake]

I make you right 100% - I think they are taking the 'P' and I would not be paying for it either! Get some legal advice, good luck :hug:

 

[mrs o]

I am not familiar with this type of loan,but this is how i see it.
You needed the loan,they provided it - with conditions.
You agreed.
End of.
You should have discussed paying a massive 50 quid extra per month in greater detail.Hello?
There is an old saying,your parents lived by it-Let the borrower -beware.

Its all too easy when you desperatly need cashflow to agree terms.that you really havent looked at.We,ve all done it.We are so glad that the bank etc have provided the funds that we will think about the terms another day.That day comes back and bites you in the bum!!

However i think you have a case to get out of this commitment
The mentoring that they are providing is irrelevant to your business.
They know nothing about your business that can help grow your business.
There is no advantage what so ever for you to continue in this direct payment .
In actual fact this direct payment is putting you in a negative position and contravenes the ethics and purpose of this Chamber and Commerce loan.
Therefore i wish to cease and desist this payment forthwith.
This is the route i would try and if that didnt work -i,d try another !!

 

[Marley's Ghost]

What you really should do, is to phone the national Business Link number and get some free legal advice - they still run the 'Lawyers for youir Business' scheme, which buys you some free time.

Business Link work very closely with the chamber, so that should put the cat amongst the pigeons.

I worked for both organisations for 3 years, and they are pretty badly organised to be fair....well the one in Gloucestershire was anyway, but you shouldn't be paying for something they are not delivering

 

['chelle]

I am not familiar with this type of loan,but this is how i see it.
You needed the loan,they provided it - with conditions.
You agreed.
End of.
You should have discussed paying a massive 50 quid extra per month in greater detail.Hello?
There is an old saying,your parents lived by it-Let the borrower -beware.

Its all too easy when you desperatly need cashflow to agree terms.that you really havent looked at.We,ve all done it.We are so glad that the bank etc have provided the funds that we will think about the terms another day.That day comes back and bites you in the bum!!

However i think you have a case to get out of this commitment
The mentoring that they are providing is irrelevant to your business.
They know nothing about your business that can help grow your business.
There is no advantage what so ever for you to continue in this direct payment .
In actual fact this direct payment is putting you in a negative position and contravenes the ethics and purpose of this Chamber and Commerce loan.
Therefore i wish to cease and desist this payment forthwith.
This is the route i would try and if that didnt work -i,d try another !!

You have completely missed the point.
As a qualified legal practitioner I am a stickler for understanding legal contracts and scrutinising paperwork before I enter into such an agreement. I understood perfectly what the conditions of this loan were prior to signing. The point I am making is that the Chamber of Commerce are in breach of the agreement by not providing the mentoring which they claim to be a compulsory part of the agreement, yet they still expect me to pay for the service which they are ill equipped to provide. This is not a case of me taking the money with no questions asked, then disputing the terms of the agreement when they dont suit me.

Marley's Ghost, thankyou for that advice, that's really helpful, I'll give them a ring tomorrow.