Consumer complaint received 2022-02-19
Company: Scratch Services, Inc.
State: IL
Product: Payday loan, title loan, or personal loan
Sub-product: Installment loan
Issue: Charged fees or interest you didn't expect

Complaint:
Installment Loan Amount borrowed = {$2700.00} in XX/XX/XXXX No interest for the first 12 months Monthly payments would be {$140.00} I am supposed to have the first 12mos interest free on my loan however I am being charged interest and none of my payments are being applied toward principal. 

Principial parties to transaction : Vendor Store : XXXX - XXXX - XXXX XXXX XXXX Financing : PatientFi ( done online ) XXXX XXXX XXXX XXXX XXXX XXXX, CA XXXX https : XXXX * ( Will not let you use a Debit or credit card to make payments ) Loan serviced by : XXXX https : XXXX? XXXX Scratch Services, XXXX XXXX XXXX XXXX XXXX XXXX XXXX CA XXXX XXXX Services, XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX, CA XXXX. 
* ( Will not let you use a Debit or credit card to make payments ) However, when I inquired why I am being charged interest when it clearly states on each bill and email that it is interest free on for the first 12 mos. 

At the time of origination, it was my understanding that I would not be charged interest until after the first 12 mos. 

When I called scratch and inquired, I was told that I am not being charged interest and if I pay off the entire amount prior to the end of first 12 mos. That I will be refund the interest ( that I am not being charged ) LOL. 

If you have an interest free period? All payments made during that time period should be applied towards principal and at the end of the interest free period interests should then be applied towards the remaining balance. If this is to be different then the lender needs to clarify that upfront Commonly held business practices At the time of origination, it was my understanding that I would not be charged interest until XX/XX/XXXX This is not a Zero Percent Promotion as I was led to believe. It is in fact a Deferred Interest Loan Which should have been clearly highlighted and spelled out in the Truth in Lending Documentation. 

If a lender or financing company has a different way of or understating as to how they want to treat payments during an interest free period, then it should be clearly spell out and explained prior to funding or before one a borrower decides to actually borrows funds from them. 


The truth of lending document should have highlighted that this was a Deferred Interest Loan and not a true Zero Percent Promotion transaction. I was led to believe that I would not be charged interest until XX/XX/XXXX. It was explained numerous times and sold as a zero interest ( NO INTEREST paid or applied until XX/XX/XXXX for the first 12 months. 

Furthermore the XXXX XXXX XXXX XXXX XXXX payment section should have also had a separate figure reflecting what the monthly payment would have to be to pay off the loan in 12 months 12 Payments @ {$220.00} = {$2700.00} Loan payment Option 1 First 12 months interest free payments @ {$140.00} = {$1700.00} will result in a balance of {$960.00} in XX/XX/XXXX and interest will be assessed against the outstating balance in 12 months Second 12 months payments with interest @ {$140.00} = {$1700.00} Loan payment Option 2 12 Payments @ {$220.00} will be needed to pay off the loan in 12 months with no interest accruing. 

Please note that the application process was done on a tablet, and I executed my signature on that device and once that was done about 3-5mins later the full Retail Installment Contract was generated and printed Doing the application process, I did inquire about the Finance charge and was told if the loan was paid back in 12 months and my monthly payment of {$140.00} there would be no finance charge as the first 12 months are interest free I believe and feel : Deceptive, Bait and Switch with regard to the 0 % interest period and monthly payments to what actually has occurred or should have been fully disclosed

Company public response: Company believes complaint caused principally by actions of third party outside the control or direction of the company
Company response to consumer: Closed with explanation