Cancellation of loan in error - can it be legally enforced?

Bellaboo1309

My partner had a loan which was cancelled in error by the company after a misunderstanding on a phone call. After involving FOS they agreed it was a misunderstanding but that the company had not dealt with the situation properly. They had to fix the mess they made of his credit file and pay compensation. They have not fixed the credit file and are now after 19 months saying that they can't do anything with the previous loan and they need to do a new loan application before they will do anything with his credit file. The FOS have been great with communicating with the loan company but we are fed up with the constant obstacles they put in the way of resolving it and the FOS are now not getting anywhere either. We areconsidering taking it down a legal route, does anyone know if they can enforce a loan that they closed and also they have never written to him advising the account was closed or issued a notice of default etc.

Thanks

CHR15

Have you kept the money?

Bellaboo1309

Yeah the money was used to repay another loan. I know that the money is still outstanding but can they legally enforce it if they have cancelled the loan account.

jonesMUFCforever

Bellaboo1309 wrote: »

Yeah the money was used to repay another loan. I know that the money is still outstanding but can they legally enforce it if they have cancelled the loan account.

Yes they can.

If you want to annull the contract pay the money back.
The problem with your credit scores is seperate and should be dealt with as so.

dealer_wins

OP if the paper the agreement was written on was not at least 75 GSM, and/or was staped with a staple more than 15mm long it could be unenforcable also lol

somethingcorporate

If you've had the money then yes, it will almost certainly be enforcable.

Bellaboo1309

We are usually the type of people who would say that the money has been borrowed and should be paid back. The difference here is that they have made our lives miserable for the last 19 months trying to resolve this. They are now offering a sum of money (out of character for them) for us to allow them to submit a new loan application to replace the old one which makes us wonder if they know that can't enforce the original loan as there is now no contract. The problem has remained the same since Sept 2013 and this is now the solution they have come up with. A solution that could have been offered when we first contacted them about the problem in Oct 2013. We have been prevented from re-mortgaging (they will not acknowledge this as we did not apply for a re-mortgage and get turned down despite me telling them that no-one in their right mind would apply for it with an incorrect default on their credit file which has left them with a now 'very poor' credit score!) which has left us out of pocket and for all of this they offered £200 compensation. We have agreed a settlement witht them twice now and twice they have changed the goal posts! The last settlement was agreed on 22nd December and after being on at them since then they came back to us just last week to say they couldn't carry out the settlement again and that he needed to do the loan all over again!

jonesMUFCforever

Get a letter of deadlock from them and take it to the ombudsman.
You won't get the loan written off but they will be able to tell the lender what to do to resolve the problems you have had.

Bellaboo1309

Ombudsman have been dealing with it since Jan 2014 when the loan company said we couldn't complain to them. Ombudsman ruled in our favour August 2014 and loan company was told to pay compensation and restore credit file. They restored credit file and then changed it back again about a month later. Finally paid compensation in Feb and have still not restored credit file saying that they now need him to complete a whole new application.

jonesMUFCforever

Go back to the ombudsman then and ask them to take further action.

Bellaboo1309

We have, the point is that the role of the ombudsman is to return the situation to the point it was at before the problems began and we are still working with them. They are really just mediating now and it is a ridiculously slow process that now feels like it will still drag on even if he goes ahead and signs a new agreement. They drag their heels and put obstacles in the way at every opportuntity. We are now looking at potentially pursuing this down a legal route and I was just wondering if anyone with any financial legal expertise had a heads up as to whether there were circumstances where the loan could not be enforced.