It was only a typo, but it meant ?1,000 more to pay

I borrowed £10,000 from Lombard North Central in May 1995 at a variable rate of 1.31 per cent a month for about five years. Last December, I was given a settlement figure of £2,629. I reckoned this should have been £1,642.

A detailed statement showed that the rate applied was 1.47 per cent a month, and indicated that one payment by cheque, in 1996, was not included. I want to settle this account quickly, since each month costs me an extra £20 in interest using my figures, or £40 using theirs.

GS, Accrington

Lombard North Central, now First National Tricity Finance, is owned by Abbey National, which has checked the figures again and agrees that you are right.

At the outset, someone typed in the wrong interest rate so, instead of 1.31 per cent a month (an annual percentage rate of 16.9 per cent) you have been charged 1.47 per cent, or 18.8 per cent a year for five years. During that time, the interest rate changed only once - to go up to 20.9 per cent. But instead of raising your repayments, the lender extended the term, which is why you still owe money after making 60 monthly payments. So instead of insisting that you owe £1,756, Abbey agrees it should be £756.

You have since made another repayment and Abbey is waiving interest on two instalments, so the amount now needed to pay off the loan is £483. Someone from Abbey is contacting you to discuss compensation for the costs and inconvenience Lombard 's mistake has caused you.

Inheritance tax: Spouse's house?


I understand that a wife has a legal right to 50 per cent of the value of the property, even though the deeds may be in the husband's name. So, if I died before my wife, would she have to pay inheritance tax based on the total valuation of the property, or only on my half? Or must I get the deeds changed to reflect joint ownership?

SK, Romsey

Your understanding is not quite right. A wife is likely to be given half the house in divorce proceedings, but she does not have a legal right to a particular share. Even if she did, the Inland Revenue would not accept your conclusion that you should be taxed only on your half. That, however, is academic because she would not have to pay tax on inheriting the house anyway: there is no tax on gifts between spouses.

You do not have to get the deeds changed for your wife to inherit the whole house, but you should make your intentions clear in your will. If you died without making one, part of your estate might go to other relatives, including part of the house's value.

Card confusion: Less than capital


In January, I sent a cheque to pay my Capital One credit card account and, as instructed, wrote my address on the back. I was then unable to use the card for my pharmacy business, and the card firm eventually found that the money had been credited to my wife's account.

They said they had to ask my wife's permission to take back the money. What if they had credited the account of someone I did not know? I was told repeatedly that about £16 interest, accrued during the delay, would be credited to me but I have heard nothing.

RG, Woodford Green

Capital One says you should not have been told that your address was an acceptable alternative to writing the account number on the back of your cheque.

It admits that an operator then failed to check your initials before sending the payment to your wife. It claims your wife was 'informed' of the error, rather than requested to return the money so, if it had gone to a stranger, there would have been no difficulty recovering it. The company is sending you £25 to cover the interest you were wrongly charged and a goodwill payment, although Capital One warns this will take a little time to work through the system.

Solicitor's delay: $40,000 blocked



My brother died in 1979 and his estate passed to me. In April 1999, I received a letter from Fidelity in the US, stating that he had about $40,000 in its Capital Fund there. Nothing had been heard from my solicitor since May 1980 (the solicitor died), so the account, was being transferred to the abandoned properties account.

Through my current solicitor I was asked for a sworn statement, which I forwarded. I have made several phone calls to Fidelity in Boston without success. I have contacted my new solicitor several times and stressed the urgency for action, but with no satisfaction.

AT, Accrington

The logjam appears to be with your solicitor. Fidelity says there is just one piece of information it still needs before releasing the money: a transfer death certificate. Once this arrives, you will have a cheque within a week.

Fidelity has phoned and written to your solicitor several times, asking for the certificate, but heard nothing. Keep nagging your solicitor.



• Write to Margaret Dibben, Money Writes, The Observer, 119 Farringdon Road, London EC1R 3ER. Please include a telephone number, but not SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.