Northern rock loan over £25,000
Comments
-
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11236824/Northern-Rocks-bad-bank-takes-itself-to-court-to-confirm-customers-arent-owed-loan-compensation.htmlNorthern Rock's bad bank takes itself to court to confirm customers aren't owed loan compensation
NRAM hopes to get legal ruling that borrowers with loans bigger than £25,000 are not protected by Consumer Credit Act
The state-owned arm of Northern Rock has brought a legal claim against itself to test whether or not it owes compensation to 43,000 customers who took out loans before the building society’s collapse.
Northern Rock Asset Management (NRAM) is on Tuesday appearing at the Commercial Court in London in the hope of getting legally-binding confirmation that customers with loans of £25,000 or more are not entitled to have their interest payments returned or written off.
One of the defendants in the case is named as Jeffrey McAdam, who leads unsecured debt recovery for UK Asset Resolution (UKAR), the parent body of the Northern Rock assets not already sold off or wound down. He is understood to hold one of the loans involved in the case.
UKAR set aside £271m in 2012 to compensate customers who had borrowed less than £25,000 before April 2008, after it was found their loan documents did not adhere to the Consumer Credit Act.
The organisation has already contacted 152,000 customers to correct the wording of their loan paperwork and some have been compensated for interest that was incorrectly charged.
However, there are about 43,000 other customers who took out loans of more than £25,000. These loans would not typically come under the protection of the Consumer Credit Act, as NRAM and its lawyers have long maintained. The Financial Ombudsman Service has also found in the firm's favour.
NRAM has accepted that some of these customers received incorrect letters telling them they were covered by the law.
The organisation has brought its own case to court to clarify the exact legal position and confirm its stance on behalf of the affected customers. A ruling is expected before the end of the year.
In its accounts, NRAM has said the total potential liabilities are uncertain but could reach £240m if it is wrong in its position. It has not set aside any money to cover this, given that previous legal advice has confirmed that customers are not owed.Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB
IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed0 -
Has anyone heard anything? I cannot find anything on the internet about what the outcome, if any, is?0
-
As per the extract that Fermi posted, the second from last paragraph states "a ruling is expected before the end of the year"0
-
Oh, I missed that bit0
-
I have to say this isnt looking good imo.
I suppose only a few weeks to wait to find out though.0 -
Remember though guys. If the judge says we are covered by CCA, then NRAM will have to do the same with us as what they done to those with loans under 25k. If the judge says we aren't covered by CCA, then we can go down the misrepresented route, as they sold it to us as regulated. If the latter happens, it may work out well, as a judge has ruled it as not covered and then what will NRAM have to say!0
-
They sound pretty confident to me!!
39. Contingent liabilties
The Consumer Credit Act ('CCA') regulates certain clases of mortgages and loans including the majority of the unsecured
element of the 'Together' mortgage portfolio. As detailed in the Group's 2012 Anual Report and Acounts, NRAM did not
comply with the requirements of the CCA in respect of some documentation provided to certain customers with CCA
regulated loans. NRAM, therefore, made provisions during 2012 and the curent period, for NRAM's best estimate of the cost
of providing remediation to those customers (se note 28). Where NRAM made unsecured loans for sums in exces of £25,00 prior to 6 April 208, the documentation incorectly
stated that these loans were also regulated under the CCA. Having considered al the information available to us, including
legal advice and favourable adjudications by the Financial Ombudsman Service, we are of the view that such loans are not
covered by CCA regulation and, therefore, do not require remediation or a provision. However, to provide clarity for
ourselves and our customers, NRAM has commenced declaratory procedings in the High Court to determine whether
customers who tok out such loans are entiled to the same or similar rights and remedies as those customers who tok out
loans that were regulated under the CCA. We expect his clarity by 31 March 2015. If the Court makes a decision adverse to
our positon, then NRAM would consider the impact and could be liable for remediation to these customers. Any such
remediation would be likely to be through adjustment to customer balances. The curent exposure, as at 31 March 2014,
resulting from this uncertainty, together with any other potential actions folowing a judgement, fals within a range up to an
estimated maximum of £240m.0 -
Was this copied and pasted from somewhere??0
-
Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB
IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed0 -
Hi All,
I am now in direct contact with a major TV new Journo who is very interested in covering this.
They have asked if I can get some "testimonials" from people who meet the following criteria.
1. Loan over £25,000 sold as being covered by CCA taken out prior to 2008
2. Taken their case to the FOS
OR
3. Anyone who had a loan over £25k taken out prior to 2008 and subsequently had Northern Rock / NRAM use the CCA against them in court for any reason whatsoever
Please either post on this thread if you can help or better still PM me.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards