Clear your debts?

[jawillwill]

There really are some sad little children on this thread. Im sure you know who you are.

 

There are now.

 

[Weston Super Saint]

 

How would you like it if you took out a fixed rate mortgage and 3 months into the fixed rate, the rate went up? Or you wanted to cancel at a certain point after being told that you could but you noticed the original agreement didnt have your cancelation rights on? Is that fair? That is certainly not legal which is why the debt can be cleared legally in a court of law (or settled out of court early if the lender has any sense).

 

I'm genuinely interested - it's been a long mother's day slaving in the hot kitchen and I'm also a little bored!! - so tell me, what sort of examples are so seriously wrong on these credit agreements?

[Crouchie's Lawyer]

Some of the text on that site is hilarious. If I was going to instruct someone to do some legal work for me I would want someone capable of stringing a coherent sentence together.

 

Most local solicitors will have an initial interview with you for free. I would recommend investigating that if you have genuine legal concerns.

 

It looks to me as though you are paying £450 for a non-lawyer to conduct a tick-box exercise on a loan agreement. If they find something naughty and if the lender refuses to come to some sort of settlement with you, only then does a qualified lawyer get involved. That's my reading of it anyway - is that right?

 

Still waiting to hear which banks have committed fraud in relation to Consumer Credit Act claims as well.

 

That is not the case at all. The company is part owned by a firm of solicitors and your average run of the mill solicitor will not have the in-depth knowledge on the credit consumer act to be able to deal with these kind of cases unless that is their specialist field. So by all means, feel free to go to a solicitor but they will not know much about it. Would you want someone to service your car that had an in depth knowledge of the make and model of your car or someone that happened to own a tool box?

 

A legal team looks over the agreement and tries to find a number of minor or major issues with each agreement, if they dont find any the client is refunded as the agreement is deemed as enforcable, if they do then the lender is informed that they are in default of the agreement and that they will be taken to court for the agreement to be deemed as unenforcable. Some lenders fight it and the case goes to court, a lot of lenders are just settling out of court so they dont incur the court fee's.

 

I do not know which specific banks have done this and even if I did, posting it on the internet would deem me liable for any potential legal issues that bank wanted to take against me or the company. I am merely an agent for the company. The information I get is sent to head office which deal with the cases.

 

I'm genuinely interested - it's been a long mother's day slaving in the hot kitchen and I'm also a little bored!! - so tell me, what sort of examples are so seriously wrong on these credit agreements?

 

I dont personally know all of them as there are hundreds if not thousands of issues from things as major as not listing the cancellation rights and misquoting the apr to things as small and silly as the font type and size the agreement is written on.

 

Another example is that one banks agreement stipulates that all agreements should be signed on their premises which is up north and they are predominantly a phone/internet credit card company so send all agreements out in the post to be signed, ergo the agreement has been breached straight away.

 

Something as small as font size or type alone will not get your credit card wiped but added to other minor or major breaches it all stacks up.

[Weston Super Saint]

So basically this is another case of bureaucracy gone stark raving mad!

 

I'm gonna take a guess that this originated in the good ol' U S of A : roll :

[Crouchie's Lawyer]

So basically this is another case of bureaucracy gone stark raving mad!

 

I'm gonna take a guess that this originated in the good ol' U S of A : roll :

 

I could be wrong but I think the credit consumer act only relates to the UK so no, I dont think it did start in the USA.

 

Yes it is bureaucracy gone mad a bit but it is here and people will use it.

[captain sensible]

I certainly feel the need to chuck my 2 Bobs worths worth into this debate.

 

A lot of this eminates from the Bank Charges debate which as most of us know, is an ongoing case with the Banks and the OFT, God knows why, because if you check the "Unfair Terms in Consumer Contracts Regulations", its there in black and white, and bank charges, are, downright illegall!

 

This is also covered in the changes to the Consumer Credit Act 2006.

 

There is no need to engage Crouchies Lawyer to act on your behalf, as all this information is on the net, and if you can read and write, use a dictionary to translate some legal jargon, you can quite easily represent yourself.

 

The Banks, in my own experience, have been behaving like third rate loansharks, taking every opportunity to abuse there positions by applying extra charges wherever they see fit. They have been behaving like a law unto themselves, and they need there asses kicking!

 

I don't agree with debt avoidance, ie generally borrowing with no intention whatsoever to pay back, but I don't agree with the banks levying hidden charges, that they put in there terms and conditions, that are contrary to the laws of this land, which is what they have been doing.

 

If you look in your credit agreements, you will notice a clause that states something like, "This agreement is goverened by the laws of England and Wales", and this includes the Unfair Terms in Consumer Contracts Regulation", the Consumer Credit Act 2006, and various other bits of legislation.

 

The Banks have brought all this on themselves, they have not only been operating illegal unfair agreements for some time, they have been trying to cheat there way into enforcing them through peoples general ignorance of the laws of this land.

 

I personally believe the banking system as it stands, is morally and ethically corrupt, and unfit for purpose. I am now looking at alternatives, ie credit unions etc, in an attempt to stay clear of the loansharks! Community Banking I believe is the way forward, with agreements that conform to the laws that were made in parliament!

[Crouchie's Lawyer]

Captain Sensible, I agree with the sentiments of your post and have said it is something you could do yourself if you wanted to. But equally, with a working pair of hands you can change a car engine. Doesnt exactly mean you will and in most if not all cases, you take your car to the mechanic. That is for a number of reasons such as:

 

Time - It will take someone who knows what they are doing and what to look out for a lot less time than it will take someone who has no prior experience or real understanding of what they are doing. To add to this point, if it took you an extra 3 or 4 months or swatting up on the knowledge and understanding it and you were trying to clear a loan you pay £200 p/m on, that extra 3-4 months of graft you put in to save you the money (presuming you can fully understand the credit agreement laws in that time period) had cost you an extra £600 - £800 in repayments which you wouldnt have had to of paid if you chose a firm to take care of it from day 1.

 

Confidence - Yes I could read how to change an engine and even understand it, but that doesnt mean that I would be confident enough to do it and trust my ability in getting it right.

 

Botheredness (technical term) - we live in a lazy soceity where we want things done for us, hence why services like this exist.

 

If you make a mistake in changing your engine you risk endangering your life or the life of others, whereas its not exactly life threatening if you mess up a claim for compensation under the CCA. However, you risk getting yourself into a worse state if by taking them to court you incur the court cost fee's and lose.

 

Using a company like this gives you peace of mind that they do everything for you, quickly and efficiently and the added benefit of knowing it will only cost you £50 if you dont have a successful claim, rather than wasting valuable time and effort.

[benjii]

That is not the case at all. The company is part owned by a firm of solicitors and your average run of the mill solicitor will not have the in-depth knowledge on the credit consumer act to be able to deal with these kind of cases unless that is their specialist field. So by all means, feel free to go to a solicitor but they will not know much about it. Would you want someone to service your car that had an in depth knowledge of the make and model of your car or someone that happened to own a tool box?

 

Obviously, it would be prudent to instruct a solicitor who specialises in the area in which you are interested. I'd kind of assumed that most people would gather that.

 

A legal team looks over the agreement and tries to find a number of minor or major issues with each agreement, if they dont find any the client is refunded as the agreement is deemed as enforcable, if they do then the lender is informed that they are in default of the agreement and that they will be taken to court for the agreement to be deemed as unenforcable. Some lenders fight it and the case goes to court, a lot of lenders are just settling out of court so they dont incur the court fee's.

 

What percentage of claims go to court?

What is the success rate of those claims?

What is the average value of debt written off from those that are successful?

What is the average value of a settlement figure if the lender chooses to settle?

Can you site a reported case that your company has been involved in that was successful?

 

I do not know which specific banks have done this and even if I did, posting it on the internet would deem me liable for any potential legal issues that bank wanted to take against me or the company.

 

What legal issues? If a bank has been convicted of fraud in relation to this then you are perfectly free to state that. If you are worried about making defamatory statements on here I'd suggest you take a look at Post One again:

 

"there have already been a lot of success cases which have gone through and seen how the banks and building societies have reacted to some of these cases (like fraudulently producing agreements and doing 'cut and shut' jobs on others!)"

 

 

I am merely an agent for the company. The information I get is sent to head office which deal with the cases.

 

 

 

I dont personally know all of them as there are hundreds if not thousands of issues from things as major as not listing the cancellation rights and misquoting the apr to things as small and silly as the font type and size the agreement is written on.

 

Another example is that one banks agreement stipulates that all agreements should be signed on their premises which is up north and they are predominantly a phone/internet credit card company so send all agreements out in the post to be signed, ergo the agreement has been breached straight away.

 

Something as small as font size or type alone will not get your credit card wiped - no **** Sherlock - but added to other minor or major breaches it all stacks up.

 

Please see above.

 

I'm not trying to have a go, just interested because I find it hard to believe this is worth many people's time or £50.

 

Incidentally, you also advise them to cease payments due whilst your "legal team" reviews the documents. I'd be interested to know what your average turnaround time is.

Edited 23 March, 2009 by benjii

[Weston Super Saint]

Please see above.

 

I'm not trying to have a go, just interested because I find it hard to believe this is worth many people's time or £50.

 

Incidentally, you also advise them to cease payments due whilst your "legal team" reviews the documents. I'd be interested to know what your average turnaround time is.

 

And to add another related question...

 

If you do cease payments whilst the 'legal team' reviews the documents, for the cases where there is no case to answer, what is the average penalty imposed for missed / late payments??

[benjii]

And to add another related question...

 

If you do cease payments whilst the 'legal team' reviews the documents, for the cases where there is no case to answer, what is the average penalty imposed for missed / late payments??

 

I imagine it's about £12 per credit card, something similar for a loan, plus interest ect, plus screwing up your relationship with the lender, plus potentially knackering your credit rating etc...

 

Don't worry though, Crouchie's Lawyer will be on hand to help you challenge the charges!

[Crouchie's Lawyer]

Obviously, it would be prudent to instruct a solicitor who specialises in the area in which you are interested. I'd kind of assumed that most people would gather that.

 

Well a solicitor which specialises in consumer credit law isnt you average solicitor that deals with house purchase, wills or divorce settlements.

 

What percentage of claims go to court?

What is the success rate of those claims?

What is the average value of debt written off from those that are successful?

What is the average value of a settlement figure if the lender chooses to settle?

 

Can you site a reported case that your company has been involved in that was successful?

 

Firstly, the company has only been running around 10 months as the industry as a whole is still relatively infant. They have only started putting cases through in mass for around 6 months because they wanted to make sure they had the infrastruture and support in place to service the clients propperly rather than just running with it and seeing where it takes them like a lot of other firms have done in the industry. Obviously with cases going to court, there are a hell of a lot more cases in pipeline than completions but so far to date CI have written off £1m of debt and have targetted themselves £10m this year.

 

Success rates at this point are a pointless figure. Similar to looking to the league after 1 league match. The reason being is that success rates to cases in will be very low because of the size of the pipeline. I can tell you that cases where refunds have been given (thats cases where they have not either been beneficial to the client to proceed or cases which it has been shown the agreement is enforcable) is only 6% of cases in. I cannot give you the specifics of cases where clients have had their debt written off or reduced as obviously that would contradict the data protection act and to be honest, I dont know names etc for that very reason. However feel free to check out the blog on http://www.creditissues.co.uk which gives all the information of success cases and which banks it was that settled.

 

What legal issues? If a bank has been convicted of fraud in relation to this then you are perfectly free to state that. If you are worried about making defamatory statements on here I'd suggest you take a look at Post One again:

 

"there have already been a lot of success cases which have gone through and seen how the banks and building societies have reacted to some of these cases (like fraudulently producing agreements and doing 'cut and shut' jobs on others!)"

 

I didnt say they were convicted of fraud did I, I merely said they have fraudulenty produced documents. I do not know if CI have decided to take this further or infact just said to the lender in question 'You have to settle now or we will take you to court and prove this and you will be further in the poo'.

 

Please see above.

 

I'm not trying to have a go, just interested because I find it hard to believe this is worth many people's time or £50.

 

Incidentally, you also advise them to cease payments due whilst your "legal team" reviews the documents. I'd be interested to know what your average turnaround time is.

 

I appreciate you are not trying to have a go, it makes for interesting conversation. I would however like to point out that I am unable to always answer your questions, I am merely a rep for the company. Similar to the set up of a company like Virgin Vie etc so Head Office deal with most things and they have all the information.

 

What I would say is that if you think CI or indeed myself is trying to get 'fat' off £50 then you are mistaken. The amount of time, effort and energy I have put into it is worth a lot more than £50 and that £50 doesnt go to me. It doesnt even go to CI. It goes to the solicitors for their time. I seriously doubt it even covers that.

 

I never advise my clients to stop paying their debts. However the point I believe you have picked up on is a valid one. Once the lender has been proven to have breached the CCA, they are in default. Similar to how a client would be in default had they breached it by missing payments. At this point, the client can if they want to stop making payments to the debt until the dispute is sorted. They are legally entitled to do this. As WSS and yourself go onto point out below, this would indeed mess up your credit file. However, by reporting negative information on your credit file, the lender has directly breached the rules of the Banking Act and the Banking Code. This is something which CI are taking a few lenders to court over at the moment as I understand. Because the lender is in default they are not legally allowed to register a ccj or default against you, but because the credit profile companies (experian and equifax) are organisations which voluntarily exchange info with the banks, they are reporting what the banks tell them, and although in default, the banks canstill put missed payments against the debt which is wrong.

 

And to add another related question...

 

If you do cease payments whilst the 'legal team' reviews the documents, for the cases where there is no case to answer, what is the average penalty imposed for missed / late payments??

 

I imagine it's about £12 per credit card, something similar for a loan, plus interest ect, plus screwing up your relationship with the lender, plus potentially knackering your credit rating etc...

 

Don't worry though, Crouchie's Lawyer will be on hand to help you challenge the charges!

 

I thought you weren't having a go?

[Weston Super Saint]

 

 

 

 

I never advise my clients to stop paying their debts. However the point I believe you have picked up on is a valid one. Once the lender has been proven to have breached the CCA, they are in default. Similar to how a client would be in default had they breached it by missing payments. At this point, the client can if they want to stop making payments to the debt until the dispute is sorted. They are legally entitled to do this. As WSS and yourself go onto point out below, this would indeed mess up your credit file. However, by reporting negative information on your credit file, the lender has directly breached the rules of the Banking Act and the Banking Code. This is something which CI are taking a few lenders to court over at the moment as I understand. Because the lender is in default they are not legally allowed to register a ccj or default against you, but because the credit profile companies (experian and equifax) are organisations which voluntarily exchange info with the banks, they are reporting what the banks tell them, and although in default, the banks canstill put missed payments against the debt which is wrong.

 

 

 

 

 

I thought you weren't having a go?

 

LOL.

 

I'm not sure you've really got any claims to the moral high ground

[benjii]

 

 

 

 

I thought you weren't having a go?

 

It was tongue in cheek.

 

[Crouchie's Lawyer]

LOL.

 

I'm not sure you've really got any claims to the moral high ground

 

What do you mean? I built my second house there in case of any immenent floods!

[GenevaSaint]

http://news.bbc.co.uk/1/hi/business/7894840.stm

 

The charity Citizens Advice said there had been a recent "rash" of bogus adverts from claims handling firms.

 

It said statements that most loan agreements were "unenforceable" were particularly misleading.

 

"These ads appear to offer an easy way out to people who have credit debts they are struggling to pay," said Sue Edwards of Citizens Advice.

 

Some claims firms suggest that any credit card or personal loan agreements struck before April 2007, and worth less than £25,000, may not be enforceable if the credit company does not have sufficiently accurate paperwork.

 

"But many credit agreements do meet the legal requirements and therefore can't easily be challenged as unenforceable," Ms Edwards added.

[Crouchie's Lawyer]

http://news.bbc.co.uk/1/hi/business/7894840.stm

 

The charity Citizens Advice said there had been a recent "rash" of bogus adverts from claims handling firms.

 

It said statements that most loan agreements were "unenforceable" were particularly misleading.

 

"These ads appear to offer an easy way out to people who have credit debts they are struggling to pay," said Sue Edwards of Citizens Advice.

 

Some claims firms suggest that any credit card or personal loan agreements struck before April 2007, and worth less than £25,000, may not be enforceable if the credit company does not have sufficiently accurate paperwork.

 

"But many credit agreements do meet the legal requirements and therefore can't easily be challenged as unenforceable," Ms Edwards added.

 

Thats funny as there are a load of cases which have successfully completed that state otherwise! And just because they cannot easily be challenged, doesnt mean they cannot successfully be challenged. It just means you need a company with the nouse and experience to do it for you. The legal body behind Credit Issues are not just you run of the mill legal firm. They specialise in this stuff alone and have employed the services of the barrister which helped go over the new consumer credit act changes in 2007. If anyone knows there are holes in the old act Im sure its him!

 

With a solid refund policy, Credit Issues would not waste the time, money or resources entering this industry to rip people off of £50 a pop. Considering they dont actually get that £50 anyway, it goes to the solicitor and the costs are far greater than £50 anyway. On every case they refund, they probably make a loss. So there would be no point doing this on a whim or a hope that it may go through, knowing the likelyhood is that it wont.

 

Ok there may be a few smaller bandits out there who are happy to sit on people's upfront fee's and in fact a lot of smaller firms are doing just this waiting for test cases from firms like CI to go through before they do any work on them! As I have previously said CI have publicly distanced themselves from this kind of behaviour and this kind of firm.

 

Time will tell, and there will be doubters out there. Thats fine. But there are success cases. Lenders have already settled on over £1,000,000 of debt so the above article from the financial guru's that are the CAB is IMO a load of carp!

[Crouchie's Lawyer]

Oh you failed to print the rest of the article too...

 

The Ministry of Justice (MoJ) listed some of the claims currently being made in newspaper, radio and internet adverts that it said were misleading.

 

Among the bogus claims were:

 

• "Eighty percent of credit agreements are unenforceable"

 

• "Fifty million credit agreements are created every year, at least 25 million are unenforceable"

 

• "We'll get your credit cards written off within 6 weeks!"

 

• "Fast results guaranteed!"

 

• "We have a 100% success rate"

 

• "A positive outcome is guaranteed".

 

The Office of Fair Trading (OFT) pointed out that any business involved in offering advice about paying or rescheduling debts needed a licence under the Consumer Credit Act.

 

A claims management firm that did this without such a licence was guilty of a criminal offence and could be prosecuted.

 

And any debt advisory firms, licensed by the OFT, that also broke the rules on publishing misleading adverts could be closed down or fined up to £50,000.

 

"The OFT will not hesitate to take enforcement action against licensed claims management businesses who engage in unfair business practices by deliberately misleading vulnerable consumers about the services they offer," said Ray Watson of the OFT.

 

The MoJ and OFT issued a similar alert to consumer last August.

 

Citizens Advice said people in trouble with their debts could use its own free services at one of its local offices.

 

The only statistic I have given is that which has been given to me which is of all the cases which CI have taken in, only 6% of cases have been refunded. Make of that what you will, but CI will issue a refund if the case does not benefit the client or if the agreement is proven to be enforcable.

 

CI are only concentrating on agreements prior to April 2007 so have no need or desire to quote that 50 million agreements are being produced each year as that is current, therefore not applicable.

 

Timescales are always relayed to the client as possibly up to 9 months due to the legal involvement within the case. Every case is different and whilst there have been successes which have turned around within 6 weeks, the majority of cases take a hell of a lot longer than this! So we do not promise 'fast results' or completion within a short period of time.

 

We do not quote 100% success rate either. In fact we do not quote a success rate at all. Every case is different and a lot of cases are still in their early days and going through court, so to quote success rates at this stage is misleading and incorrect. And I would never advise of a positive outcome all the time. I merely state the facts and know with the solid refund policy in place, if the client is unsuccessful, it has only cost them £50.

[Weston Super Saint]

Oh you failed to print the rest of the article too...

 

So, of all the credit agreements signed prior to April 2007 - probably millions of them I'd have thought - what is CI's best estimation [and I'm sure they can't say with any certainty, but a guesstimate would be nice], as to the percentage of those agreements which are unenforceable?

 

Is it 1%, or closer to 75% :smt102

[Crouchie's Lawyer]

So, of all the credit agreements signed prior to April 2007 - probably millions of them I'd have thought - what is CI's best estimation [and I'm sure they can't say with any certainty, but a guesstimate would be nice], as to the percentage of those agreements which are unenforceable?

 

Is it 1%, or closer to 75% :smt102

 

I am not Credit Issues so I wouldnt know, we (as agents) have not been given a percentage figure to quote. I can tell you that the percentage of applications which have flaws in the credit agreement is very high. Over 90% but this doesnt necessarily deem the agreement unenforcable and can be for something as simple as wrong font type.

[Weston Super Saint]

I am not Credit Issues so I wouldnt know' date=' we (as agents) have not been given a percentage figure to quote. I can tell you that the percentage of applications which have flaws in the credit agreement is very high. Over 90% but this doesnt necessarily deem the agreement unenforcable and can be for something as simple as wrong font type.[/quote']

 

Cheers.

 

I have another question though

 

Is it regular practice in the finance industry to look at the credit agreements, and decide what is wrong with them - no bad thing I guess if it regulates the industry - then write some legislation to say this is how things should be done from now on [April 2007], then allow these agreements to be annulled because of this new legislation?

 

It seems to me that these new rules are always going to find issues with the old agreements, because they were put in place to prevent those problems from re-occurring. It seems a little odd that the old agreements weren't given 'grandfather rights' like an employment contract would be given if the legislation changed :smt102

[Crouchie's Lawyer]

Cheers.

 

I have another question though

 

Is it regular practice in the finance industry to look at the credit agreements, and decide what is wrong with them - no bad thing I guess if it regulates the industry - then write some legislation to say this is how things should be done from now on [April 2007], then allow these agreements to be annulled because of this new legislation?

 

It seems to me that these new rules are always going to find issues with the old agreements, because they were put in place to prevent those problems from re-occurring. It seems a little odd that the old agreements weren't given 'grandfather rights' like an employment contract would be given if the legislation changed :smt102

 

That I couldnt answer I am afraid. I dont know why the law was not 'back dated' if you like. It would have made sense and certainly protected the banking industry from claims like these but whether there was a law or even clause in the contracts or previous consumer credit act which prevented this I dont know?