High Court decision on debt loophole dashes write-off hopes for thousands

donaldtramp

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6868968.ece

Fantastic! As someone who always pays off whatt they are due I am glad not to be subsidising the !!!!less and the dodgy who turn to use loopholes to walk away from debt related to money they have spent!!!

If people use these loopholes to walk away from debts they truly owe I am glad this high court decision has gone against them!

As for all these leeches, "claims management companies" I truly hope their business model collapses.

All they are doing is putting up the costs of living for other people.

About 100,000 people trying to have their credit card and loan debts written off by exploiting a legal loophole will have to pay the full amounts they owe after a landmark court ruling this week.
The High Court decision will mean defeat for tens of thousands of similar county court cases, which have been put on hold until the test case involving Royal Bank of Scotland (RBS) was resolved.
The ruling will also suffocate the multimillion-pound industry in debt avoidance that has expanded rapidly in the past 18 months as consumers struggling to keep up repayments are seduced by attractive claims.
Many of the UK’s 3,000 Claims Management Companies (CMCs) attract clients with promises that they can exploit legal loopholes to write off certain unsecured debts, most commonly personal loans and credit cards.

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The industry depends on the CMCs establishing that the customer’s original loan agreement is “unenforceable” because it is in contravention of one or more requirements of the Consumer Credit Act 1974.
The simplest tactic that CMCs use is to demand to see a copy of the client’s original loan agreement. Under the Consumer Credit Act, if the lender cannot provide a copy within 12 days, which many banks struggle to do with older loans arranged by predecessors, the debt becomes “unenforceable”.
Where the bank can provide the documents, lawyers will advance other arguments, such as that the terms and conditions page was not signed or that certain information required by law was missing. Some CMCs have built their businesses on the promise that unenforceability means that the borrower is no longer obliged to repay the loan and lawyers say that many thousands of people have already stopped payments. Others have continued with repayments, hoping that their loans would be be cancelled.
The tens of thousands of county court claims on hold are from borrowers asking the court to cancel the debt on the basis that it is unenforceable. Ultimate Law, a Manchester-based law firm, estimates that 100,000 claims are in progress.
Given the amounts at stake, the county court referred the matter to the High Court, which considered the case of Phillip McGuffick, who was seeking to have his £17,034 personal loan from RBS declared unenforceable. The case was heard on the basis that both sides agreed that the loan was unenforceable and the judge was asked to decide what this meant.
Mr Justice Flaux ruled: “Although the [Consumer Credit Act] may render the agreement unenforceable, the agreement remains a valid and subsisting contract and rights and obligations under it continue to exist”.
Chris Busby, a partner at Eversheds, said: “The judgment said that claimants seeking to prove their credit agreements are unenforceable are still liable for monies owed. It’s a major blow to CMCs who have been suggesting otherwise.”
RBS said: “We welcome the clarity this judgment has provided. The outcome confirms the position that we have consistently adopted with customers who seek to challenge the validity of their agreements.”
Andrew Wigmore, of the Claims Standards Council, a trade body for CMCs, said that those promising guaranteed debt write-offs were operating a “scam”. He declined to comment on the RBS case but said that there were legitimate challenges to be made against loan agreements.
The Ministry of Justice, which regulates the UK’s 3,000 CMCs, has recently stepped up its campaign against unscrupulous practices in the industry. Last year it banned 116 CMCs for offences including exorbitant fees and misleading advertising. The ministry had no comment on the RBS case.

Paul_Herring

http://forums.moneysavingexpert.com/showthread.html?t=2004191

jamesey07

don't worry donald there will still be plenty of people like me who will still not pay as we couldn't really care a less what the courts say, do you think that now they r gonna get the 10 k i owe the credit card companys? not a chance in hell :jso you will still be paying your high charges while i have lived the life over the past few years staying in 5 star hotels, 50" tv's and lovely holidays all paid for by the credit card comapnys and they will NEVER get a penny of the money back :rotfl:

Any

jamesey07 wrote: »

don't worry donald there will still be plenty of people like me who will still not pay as we couldn't really care a less what the courts say, do you think that now they r gonna get the 10 k i owe the credit card companys? not a chance in hell :jso you will still be paying your high charges while i have lived the life over the past few years staying in 5 star hotels, 50" tv's and lovely holidays all paid for by the credit card comapnys and they will NEVER get a penny of the money back :rotfl:

And what is your future going to be like? Do you think you will be able to get mortgage or remortgage or any card ever again?

missk_ensington

jamesey07 wrote: »

don't worry donald there will still be plenty of people like me who will still not pay as we couldn't really care a less what the courts say, do you think that now they r gonna get the 10 k i owe the credit card companys? not a chance in hell :jso you will still be paying your high charges while i have lived the life over the past few years staying in 5 star hotels, 50" tv's and lovely holidays all paid for by the credit card comapnys and they will NEVER get a penny of the money back :rotfl:

I hope you haven't destroyed a lifetime of financial freedom for the pleasure of a measley £10K! £100,000 maybe, but not ten grand! What a fool

undetterred

10k pmsl,at least make it worthwhile.