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Northern rock loan over £25,000

edited 30 November -1 at 1:00AM in Loans
1.9K replies 430.6K views
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  • I've been sitting back and reading the forums on this issue.
    I too have emailed nram for clarification and will post up any reply i get.
    I have 26k outstanding from an original 30k unsecured together loan from 2007 with the docs also showing the cca line so it will be interesting how this pans out!
  • I posted this on the other thread, have added some more on it


    Only a court can decide if the agreement that's headed regulated, when it was not, is unenforceable

    You could argue and say it is unenforceable as its a misrepresentation to the borrower of the protection available, but the court may only rule in your favour if you have not benefited from such an item of protection that would have been available to you - so basically if you have lost out from not having the protection.

    Is an interesting one for sure - I am sure they are looking at this now wondering what the best outcome for them is - refunding for all "together" unsecured loan interest amounts or only for those under 25k , risking the backlash of the non-regulated against it being sold as regulated part.

    You may have a case to answer if you have not have an item such as "time to pay" which is available to you on a regulated loan. I would suspect though that if you had got as far as court in relation to your debt then you would have had your documents reviewed by a legal expert who would have picked up on the incorrect wording. Added to that there is no guarantee that the court would rule in your favour.

    I do remember a case where the court ruled in the favour of the lender with from memory the argument that the loan count not be regulated due to the amount of it - this being the most important factor in the definition of what is regulated and what is not - overriding any documentation.

    I will try and find the document.

    I feel that the best you can hope for is that they refund the interest on these larger loans also - I am sure that for most that would keep them more than happy.
  • GhIFAGhIFA Forumite
    619 posts
    Chrisb80 wrote: »
    The CCA regulates the way in which consumer credit licensees carry on business. For example, there are rules on advertising, pre-contract disclosure, credit agreements and post-contractual information. In addition, the Act confers certain rights on consumers, including in relation to withdrawal from a credit agreement, early settlement just to name a few. As most people taking out such loans as we did (not being legal experts) the CCA protection for me is piece of mind.

    I may be wrong but this is my view...

    And these were your thoughts at the time you entered the agreement?
    I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.
  • Probably not at that immediate time but I would imagine that it was because he was being blindsided by some slick salesman with a title to make him/her sound like they knew what they were doing.

    On a more serious note, as a consumer, there was a trust placed within companies like NR that they were compliant and working within the rules. Clearly the queues we saw when the run started showed that there was trust there.

    You take out an agreement, you agree to abide by that agreement. I have met all my payments and are quite lucky in that I am overpaying to reduce my debt but in the same token, you expect the agreement you are entering into to be administered in the correct way.

    If the paperwork had UNREGULATED LOAN AGREEMENT written accross it, then I can imagine a lot more questions would have been asked and there would have probably been more "scrutiny" placed on adviser based sales to fully explain the consequences of not having the loan under the CCA 1974 rules.
  • edited 14 December 2012 at 4:56AM
    jimmyayjimmyay Forumite
    117 posts
    edited 14 December 2012 at 4:56AM
    I also have one of these loans. The rate of interest after i delinked - got forced to another lender when NR stopped writing new business after they nearly went bust,has nearly killed me. If it wasnt for their negligence most of us would never have had to go on such punitive rates of interest. I feel in time most of the NR loans at punitive rates will be written off. 7 years later my mortgage, now with Nationwide,is half paid off due to the low IR. The unsecured NR part is at a monstrous 12% interest or something, despite me always paying on time and never presenting a single risk to to them. i pay hundreds a month to them but the balance never seems to go down. i feel i have been done a great injustice through no fault of my own.
    :j
  • I've done some reading up on the change in CCA legislation, and my understanding is that an exclusion was included that means changes to interest rate do not put an existing unregulated loan into the regulated category - unless something more substantial like the amount of the loan was changed as well.

    I should caveat that I'm no legal expert though, so would be interested to know whether this is also the conclusion drawn by others.

    Have also emailed NR about my situation, and my MP in line with Mike's excellent note above.
  • rmartrmart Forumite
    43 posts
    In our case when the house was sold we reduced the unsecured part from 28k to 10k, and they increased the interest rate on that to 12%, robbing sods !.

    So the amount owed was reduced and the interest rate increased but the paperwork was never changed.
  • edited 14 December 2012 at 10:11AM
    Fizzy_FishFizzy_Fish Forumite
    43 posts
    edited 14 December 2012 at 10:11AM
    It seems to be down to whether the agreement can be considered to have been varied:

    2.14 An unregulated agreement can become regulated because of a variation made to it. This can happen when the parties make a further agreement which varies or supplements the earlier one. In such a case, the Act regards the earlier agreement as having been revoked and replaced by a new agreement which incorporates the terms of the earlier agreement. This new agreement may be regulated under the Act even if the previous agreement was unregulated.11

    Taken from the OfT's website about the CCA changes from 2008:
    http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft140.pdf

    So it's all about what constitutes a 'further agreement'.

    I was trying to find the article that I read previously about the interpretation of this not relating to interest rate changes, so that i could double-check this point, but haven't been able to do so. So I I can't say for sure that particular point has come from a reliable source.

    However I still think it is more than likely to be the case - the changes to my interest rate that took place when i moved the mortgage are in the T&Cs of my original agreement, so the agreement wasn't technically changed. I know this because i was horrified when I remortgaged and they jacked the unsecured loan rate up and desperately went through all the paperwork to check. And the feeling that you have been shafted/an idiot for not reading all of the fine print, and wondering HTF you are going to ever get out of this situation stays firmly fixed in the memory for a long time...

    So I suspect that unless you changed your actual agreement (probably involving new paperwork), it doesn't come into the category of a new/varied, regulated agreement.
  • GhIFAGhIFA Forumite
    619 posts
    rmart wrote: »
    In our case when the house was sold we reduced the unsecured part from 28k to 10k, and they increased the interest rate on that to 12%, robbing sods !.

    So the amount owed was reduced and the interest rate increased but the paperwork was never changed.

    The paperwork probably didn't change as mentioned in the previous post, the change in interest rate was outlined in the terms and conditions of the original mortgage, so it wouldn't therefore have been unexpected as it had already been agreed to.
    I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.
  • I understand that. I think the only chance we have is if the loans over £25k were written on the wrong paperwork. The heading should have told us the loan was unregulated and not covered by the CCA, instead it clearly states it is regulated and therefore is misleading.
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