Unenforceable Credit Agreements

nobblyned

Ian_Griffiths_Halifax wrote: »

Would you still say the same about somebody who is claiming when they find out that the payments don't correspond with the interest rate and APR somebody was quoted when taking out the finance. Or the people who were ripped off through unsuitable PPI policies?

I think there is a difference between restitution of the impact of the mistake/miselling, and voiding the entire amount owed. In the case of bank charges or PPI misselling, the consumer is only looking for restitution, i.e. the amount unfairly paid back.

The suggestion of these companies is that they can void the entire sum that you owe for even the smallest trivial mistake on a CA, this in my opinion is wrong. Say I was charged 5.2% APR on my mortgage instead of 5.1% on the CA, should I really be able to void the whole balance? Or just reclaim the difference?

Paul_Herring

Ian_Griffiths_Halifax wrote: »

normanmark wrote:

What is wrong for someone paying their debt as they should? I only use credit for purposes of buying everyday things and paying it off as standard at the end of the month. If i lose my job? Well i haven't really got myself into that situation yet, nor do i work for a company as im self employed. I don't accumulate debt for the sake of it. Why is that such a difficult concept for you to understand?

The fact you're shaking your head at the somewhat basic concept of paying back what you've accumulated certainly speaks volumes, but then i'm not surprised from a solicitor.

Would you still say the same about somebody who is claiming when they find out that the payments don't correspond with the interest rate and APR somebody was quoted when taking out the finance. Or the people who were ripped off through unsuitable PPI policies?

What on earth has an expectiation of paying your debts got to do with recovering wrongly imposed interest rates/insurance? Your question addresses no points in the post you replied to :rolleyes:

Doublespresso

I'm always amazed at how many people here claim the high moral ground on so many issues and often without knowing the whole facts.
People here tend to be so judgemental over other fellow MSEers.

Well, we have Laws for a reason and courts and judges make decisions after checking all the facts.

The other thing that always shocks me is how many people jump to the defence of big corporations without realising that the balance of power between them and the consumer is NOT equal!
Consumer protection laws are there to "try" to redress the balance and it is not surprising that they are continuously revised and refined in order to keep up!

People can be so naive sometimes.

PS, although I raised the issue, I do not have debts nor seeking the services of such companies (who should also be scrutinised!) but I have an interested in the subject having seen close friends bullied into losing their home, I wont go into details but it could have happened to almost ANYONE.

Ian_Griffiths_Halifax

nobblyned wrote: »

I think there is a difference between restitution of the impact of the mistake/miselling, and voiding the entire amount owed. In the case of bank charges or PPI misselling, the consumer is only looking for restitution, i.e. the amount unfairly paid back.

The suggestion of these companies is that they can void the entire sum that you owe for even the smallest trivial mistake on a CA, this in my opinion is wrong. Say I was charged 5.2% APR on my mortgage instead of 5.1% on the CA, should I really be able to void the whole balance? Or just reclaim the difference?

I agree. Anybody who takes out debt should repay it. However, I think that pt2537 seems to be getting a bit of a bashing for helping clients who have been genuinely wronged also.

I personally think that on the cases where people have been quoted sightly wrong as in the example you give, then surely a refund of the difference and reduction to the correct payments would be the right answer. Maybe even a little extra for inconvenience, but paying the entire loan off, and, as some would have you think, getting back the payments you've made as well, is immoral where it was a simple mistake/technical blip.

Poor lending policy by a lender however, pressurisng people into worthless policies and coverups such as telling a customer that their loan is 'fully protected for £X per month', rather than telling them £Y per month with an optional £Z for protection should penalise the lenders.

sdooley

If a loan is void, under the CCA, or voidable due to the lender's fraud or misrepresentation, the starting position is that the person borrowing the money will have to pay it back. This is the same as any other undocumented debt - e.g. an bank error in your favour that you have to repay.

The other terms of the loan (e.g. charges, possibly interest) will fall away. As with any debt claim, the court has an option to order installment payments. Interest is not generally recoverable after judgment. Consider a borrower who pulled the wool over the eyes of the bank with regard to his income: the bank would be entitled to ask for its money back (plus a commercial rate of interest) straight-away on finding out.

These cases where the entire debt has been written off will be based on the bad conduct of the lender. It isn't the starting position and I think it's wholly misleading of these claims management companies to suggest that this is easy. I am in no doubt that as with endowments, many people will be tempted to exaggerate the extent of their being mis-sold but does that mean people who were genuinely hoodwinked into penury should be penalised? It is the lender's responsibility to keep evidence of the debt (this gets lots of ordinary people into trouble with say the loan/gift argument among families but that's another story).

I note pt2537 works for a solicitor's practice, does not say they are a solicitor. So don't attack him/her for your prejudices against the profession.

bert&ernie

I see the moral majority of MSE have already galloped through this thread astride their exceedingly tall steeds. It must be comforting to view the world in such a simplistic way, yet so frustrating for them to encounter people who don't share their absolutist views. This explains the usual outraged vitriol that wouldn't be out of place in the letters page of the daily mail.

This issue has nothing to do with morality. Its all down to the law and the commercial realities of the consumer credit business. The fact is that lenders could easily do business in accordance with the law - they choose not to because the the cost of ensuring compliance is greater than the perceived risk of loss.

normanmark

Paul_Herring wrote: »

What on earth has an expectiation of paying your debts got to do with recovering wrongly imposed interest rates/insurance? Your question addresses no points in the post you replied to :rolleyes:

Bingo.

As for the some of the other posts, it seems like a bit of absolute sense seems to get some wind up a few people. Is there something wrong with the theory of if i've borrowed it I then pay it back? I've yet to see one person use this 'loop hole' for the reason that they're in such a financial state that they're struggling to feed themselves.

The only people i've seen express interest are the ones looking for a quick way to pay off a debt they've racked up. They were well aware of the terms & conditions of the CC until they see theres a possible flaw in ensuring nothing gets paid back. Thats what annoys me, as its the people that actually are good customers who'll be the ones that will have the cost passed onto them.

Call that high & mighty? I call that a tad unfair for those who have a little responsibility.

Walletwatch

Ian_Griffiths_Halifax wrote: »

Would you still say the same about somebody who is claiming when they find out that the payments don't correspond with the interest rate and APR somebody was quoted when taking out the finance. Or the people who were ripped off through unsuitable PPI policies?

Ian

You get ripped off by your credit card issuer charging usurious interest rates, socking you unreasonable fees or mis-selling you PPI - Yes, I agree, it needs to be fought tooth and nail, and excess interest you paid should be reclaimed.

You think that gives you license to get your principal amount written off - A BIG RESOUNDING NO !!! Call it high moral ground or whatever, to me it is just something that should come naturally to one and all. If people take on debt and try to find devious ways to evade repaying it, it will be the more responsible folk that will have to carry the burden as banks will start charging for every service they provide, no different from some banking systems elsewhere that are already doing so.

bert&ernie

So banks can lend money with scant regard for consumer protection law and, when found out, they shrug and give back the charges that they illegally levied? Whoops, you got me - here's your interest back, now about that money you owe me...

Ever considered that the risk of loosing the advanced capital might be an incentive for compliance?

Paul_Herring

bert&ernie wrote: »

So banks can lend money with scant regard for consumer protection law and, when found out, they shrug and give back the charges that they illegally levied? Whoops, you got me - here's your interest back, now about that money you owe me...

More or less.

Ever considered that the risk of loosing the advanced capital might be an incentive for compliance?

No - that's what the FSA is for. If you have problems with how they handle miscreants in the financial world, then that is a completely different matter.

Expecting to write off totally the principle of a loan because your lender was 'unfair,' or possibly gave you T&C's with an unenforceable clause, is wrong. (And greedy IMHO - no better than the lenders trying it on of course, but that doesn't make it right.)

And I believe the word you were looking for was 'losing.'