Unenforceable loan agreements

Kaia_2

I was pointed in this direction via a link on the PPI reclaiming discussion by homer_j.
My CCA states.... loan amount £18,000 (a secured loan taken out July 2002)
.......................amount of PPI £2021.33
.......................monthly rate of interest....0.869%
.......................APR 10.9%
.....................Number of monthly repayments... ..180
Minimum monthly repayment.....£220.43

And thats it.....nothing else....no total charge for credit or total repayable, no charges or commissions or fees AND no option to choose "no PPI required".
I have further original letters also dated July 2002 where figures above are confimed,but once again there are no breadowns of cost or fees or total amount borrowed, just simply the figures above.

I am being told that this agreement is cause for concern......any advice anyone?

Since January this year I have been in correspondance with the broker who sold the PPI and they continually refused to uphold my complaint....I have issued a claim on the 10th May 2008 through my local court to reclaim the £2021.33 PPI plus the interest and the 8% stat interest totalling just under £5000, they have until the 26th May to respond.
Someone on here worked out that I am paying 121% interest and on my £18,000 borrowed I will end up paying over £43,000 back!!!
NO WONDER THEY DIDNT ADD THE TOTAL COST OF LOAN ON THE PAPERWORK, IT'S HORRIFIC TO LOOK AT.

Kaia_2

Has anyone on here actually been successful in proving a contract "unenforceable"?

teeni

yes they have, see my previous post , take your contract and all other letters to your local cab and ask to see their debt specialist, who will check this out for you.

The information has to be quite specific and lenders do not just lie down and give up so therefore you must be prepared for a fight, also you will need to decide if you have a case whether you are able to afford to take action if you are not entitled to legal aid for it.

It is impssible to advice if you have a case without seeing the documents in full, but there could be cause for concern here so worth seeing somebody to make sure.

Kaia_2

Has anyone used one of these no win no fee companies?
I understand they can add the costs to the claim , so you still get back what youre due, is that correct?

homer_j_3

Under Access to Justice rules, yes it is possible.

As I understand it, Legal Aid disappeared for these no win no fee claims. Access to Justice rules replaced this and does allow for costs to be recovered from the other side if they win. The only stipulation is that the claim has to be for a minimum of £5000.

Now if the claim loses, then there should be insurance is in place to cover these costs and you should be satisfied that this is sufficient or you should have your own insurance in place if you are not.

That said, you have to bear in mind that there could be 2 situations where there becomes a liability and this could be if you pull out of the transaction following the instruction of litigation and/or if you do a deal directly with the company that you claim from.

A lot of claims companies went bust because of the fraudulent activity they were involved with, which introduced a lot of these new rules.

There are some companies that will work on contingency (i think thats the term) where they will deduct a % of your claim for the work - common in endowment and other companies that started up for bank charges.

homer_j_3

Kaia wrote: »

Has anyone on here actually been successful in proving a contract "unenforceable"?

You may find plenty of people using this argument for debt collection agency problems.

here is a quote from a case of Wilson V Secretary of state - a law that has been argued through appeal courts and been accepted as precedent

175. The present is said to be an example of that kind of case. Since my noble and learned friend Lord Nicholls of Birkenhead has given a full account of the facts, I need mention only the most important. In 1999 Mrs Wilson entered into a loan agreement with First County Trust Ltd ("First County"). The agreement was regulated by the Consumer Credit Act 1974 ("the 1974 Act"). Mrs Wilson pawned her BMW car as security. Under section 61(1)(a), if the debtor has not signed a document in the prescribed form containing all the prescribed terms, the agreement is "not properly executed", with the result that it "is enforceable against the debtor or hirer on an order of the court only": section 65(1). More particularly, in terms of section 127(3), if an agreement does not contain all the prescribed terms, the court is not to make an enforcement order unless the debtor has signed a document which does contain all the prescribed terms. Mrs Wilson's position was that the document in the prescribed form which she signed did not show the correct "amount of the credit", one of the prescribed terms. Moreover, she had signed no other document containing the prescribed terms. As a result, by reason of section 127(3) the court would not be able to make an enforcement order.

I have quoted more of this case in other posts but as you will see, if it can be argued that the loan is unenforceable through incorrectly completed paperwork then it can only be enforced should they find a correctly completed form. Which would ask the question why this wasn't provided in the first instance.

The SAR request that is done by most people may fail a claim as they will either not realise that all the information there has been included or will not know to ask for documents which may help their case. I understand that some of our less scrupulous lenders have already been caught red handed altering documents and will not think twice of doing this to get out of something.

Lenders rely on you being inexperienced and naive to certain things. They will only do the minimum that is required (and that can take some effort some time).

Kaia_2

The OFT have replied to my question "What are the prescribed terms".....in a CCA such as mine pre-2005........this is the reply they sent me today........


The Consumer Credit (Agreements) Regulations 1983 ("the 1983 Regulations") sets out the form and content for most regulated loan agreements made prior to 31st May 2005.

The 1983 Regulations require personal loan agreements to state (inter alia):
· the amount of credit
· the total charge for credit (TCC) if it is not variable – or the rate of interest and other charges if the TCC is variable. Where a broker fee forms part of the TCC it must be included in the calculation of the TCC, though there is no requirement to explicitly state the brokers fee in the agreement.
· the total amount payable if the TCC is not variable
· the timing of repayments
· amounts of repayments
· the APR
· any variable rate or items

You should check that your agreement complies with these and other relevant requirements of the 1983 Regulations but you should also note that there is nothing in the CCA or its Regulations that requires the creditor to disclosure a broker’s commission.

I trust this helps clarify the issues you have raised in your email. If you have any further questions on the general requirements of the CCA, I would suggest that you seek advice from your local Trading Standards Service (TSS) in the first instance; they can be found at http://www.tradingstandards.gov.uk/. If you have any specific queries which your local TSS cannot answer, your local TSS may refer the query to us - but we can only deal with questions of interpretation on the legislation.

homer_j_3

The fact that their own regulation laws state that they do not have to put commission in there is one of the reasons why I am on here telling people that there contracts are illegal.

When considering their own regulations and rules, some one either forgot or didn't consider the wider laws out there.It is because of a law that was created over 50 years prior to these that is puting a lot of these lenders in a position where they are going to lose an awful lot of money.

fanofmartin_2

HI kaia,

Is your loan with Citifinancial? I'm going to claim back the PPI on a aloan I have with them, basically I was told I had to have it to get the loan and it was standard procedure. This was in 2002. My OH and I have always thought that the loan was for 7 years and have been looking forward to the day it is paid off. We looked at the agreement and it states 240 monthly repayments, thats a lot longer than 7 years, on a 28,000 loan (inc ppi) we are paying back £78,000 !!!!!! It is a secured loan and because our house is shared ownership our half at the time was not equal to the full amount of loan. We shouldn't have been able to get it. It does not state that we will pay back £78,000. The apr is 15.4. Is there a big mistake on the form or has it been completely mis sold.

Even though we have paid back £19,000 our settlement is still £28,000

homer_j_3

There may be a better remedy than just looking to get the ppi claimed back. It is likely that no commission of the PPI will have been disclosed and as a result the maximum you can owe is 28k due to the loan being voidable.

If your monthly repayments have been 19k in total, then this would be deducted from the 28k debt if the loan is deemed voidable and all future repayments will go towards repaying the capital off the loan as no interest can be added.

So potentially a 78k debt to a 9k debt (less PPI lumpsum premium), just because someone failed to disclose a commission