Panorama Tonight - BBC ONE, 8.30pm

guyb99

Can't Pay, Won't Pay

"With the credit crunch affecting everyone, Panorama reveals the lengths some lenders are now going to in order to get borrowers to pay off their debts.
Reporter Paul Kenyon meets a woman threatened with repossession over a sofa, and a couple who have exploited loopholes in the law to have thousands of pounds worth of debt written off."

---

Might be interesting viewing.

guyb99

More Info ...

A Panorama documentary to be broadcast tonight on BBC One reveals how growing numbers of people are escaping their consumer debts – by finding flaws in the paperwork.

The programme speaks to a British law firm which claims that it is successfully writing off one in four of the consumer debts it deals with.

Top 100 law firm Stephensons says it has had 1,000 credit card and loan debts written off – many as a result of simple flaws in the credit agreement paperwork.

And Panorama shows that some debtors are taking on the banks themselves, without outside legal assistance.

Borrowers Basil and Amanda Rankine have had £37,000 in debt written off by studying their credit agreements and then challenging the lenders.

The Rankines say that, if they include debts that have effectively been frozen, the total is closer to £100,000.

The programme looks at how an entire industry has emerged, offering to find flaws in borrowers' credit agreements – and therefore getting debts paid off.

Solicitor Andrew Leakey of Stephensons said: "Of the agreements we see, we think about one in four may have a problem under the Consumer Credit Act of one sort or another.

"The ones that we see are often being filtered by other people – so it's about possibly one in ten (that could be written off).

"It can be how the loan was sold or indeed how charges have been put into the paperwork... in the wrong place, that kind of thing.

"The other warning flag is if a lender is asking you to resign an agreement. There maybe a reason that they're doing that – they may be trying to correct a problem that's already there in the existing paperwork."

However, he warned that simple errors such as spelling mistakes or incorrect dates probably would not be enough.

"You need to show some prejudice – and probably serious prejudice... that will then assist you to show that it's an unfair relationship.

"Inappropriate policies, interest rates that are too high, difficulties that a particular clause has caused, such as hidden legal fees – those kind of things."

Basil and Amanda Rankine first started researching the possibility of writing off debt after the collapse of their mortgage brokerage company left them with debts of £120,000.

They studied the Consumer Credit Act, which lays down rules for lenders – and had their first success with an HSBC credit card.

"I wrote a letter to HSBC, thought I had everything correct, sent it off," Mr Rankine said.

"A few months later they said, 'We're prepared to write the balance off'. That was about £10,000 on the HSBC credit card."

HSBC wrote it off because they had lost the paperwork.

Realising they were on to something, the couple tried the same procedure with several other lenders, highlighting a long list of flaws in the credit agreements.

They were amazed when some of these lenders also agreed to write off their debts.

"Some would say they couldn't find a copy of the agreement, so they were prepared to write it off. Others would just say they're prepared to write it off without giving an explanation – they wouldn't commit themselves and say this is the point that was wrong," Mr Rankine said.

Encouraged by their £37,000 success, the Rankines then decided to take on some of their other lenders in court.

But they had pushed their luck too far. A High Court judge threw out their case accusing them of deliberately trying to wriggle out of debt.

However, as some lenders had failed to claim their money back during the case, these lenders could now take no further action.

This meant the Rankines had escaped tens of thousands of pounds more in debt payments.

But there was a nasty sting in the tail for the Rankines and a warning to others planning to go a stage further, and take lenders to court.

Having earlier proved it was possible to escape debts through writing loophole letters, the Rankines were hit with a £100,000 court bill – effectively leaving them back where they started.

Sir Roy Goode, who was instrumental in the creation of the Consumer Credit Act, confirmed that, as the credit crunch bites, the act, originally designed to protect the consumer, is now being used by borrowers to escape thousands of pounds in debt.

"The rules relating to the formation of agreements are extremely complex. It is very easy for a creditor to make a little slip.

"Indeed in some respects some of the rules are not very clear. So any slip that is made entitles the consumer to refuse to pay unless the court gives leave to enforce the agreement."

Typical credit agreement flaws include: whether the agreement has been signed; if the APR is accurate and in the right place; whether the agreement has been lost altogether.

However, the British Bankers' Association warned that the costs of borrowers failing to pay their debts will be passed on to other customers.
"It is unfortunate when some people look to the loopholes to get out of credit agreements... because the money that they don't repay has to be repaid by the rest of us," it said.

mcjordi

i will be watching

SarahNeedle1872

Sounds interesting.... I'll be watching too!

stapeley

I highlighted this situation last year in my post LETS ALL ASK FOR OUR CCA .

mcjordi

and to you i am grateful stapley

DawnW

I can't help agreeing with the judge re the Rankine case. I do agree that companies should not stipulate unfair terms etc, but other than that, I think that if the money is borrowed, then morally, the borrower should pay it back. Otherwise it is going to become really difficult or impossible for most people to borrow any money at all - and yes, I have been in debt myself in the past, and I have paid it all back.

guyb99

In usual times, I would agree with you Dawn but these ain't usual times.

Kids can't eat or wear morals.

curly_cabbage

Intresting idea. Part of me thinks that if you have run up the debt then you know you must pay it back, but the other part says would the banks and credit card companies think twice if they thought that they could get more from me? I don't think so. Nobody who's claimed back charges ect can say they didn't enjoy getting that money back from the bank?

CC

Leixlip1

The morality argument is an interesting one. I've only taken a stance against one financial institition, Barclaycard, as they spent months refusing to make a repayment agreement with me, then agreed after I complained to the Ombudsman service over their non-response to letters, requests for information etc. They then renaged on the agreement and said that it was their right as their terms and conditions allowed them to (I have this in writing from them!) so I then exercised my right to request a CCA and low and behold they could not produce a compliant one!
The moral of this is had Barclaycard not been so unhelpful/high-handed they would have received approx' £2000 in payments from me in the last 16 months. As it is they sold the alleged debt on to DCA's who again obviously cannot produce a valid CCA. Do I feel bad?.....sometimes but I soon get over it.

ceebeeby

I'd be disgusted to think people would legitimately borrow money, and then try to find loop-holes to get out of paying it back.

Isn't that some form of .... stealing?