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Ombudsman writes £100,000 off on ‘irresponsible’ loan secured on Glasgow couple’s home

Glasgow couple who borrowed £20,000 on a APR of 16.2 per cent over 40 years – at a total cost of almost £124,000 – have been successful in arguing that their lender failed to undertake a proper affordability check, had overridden its own lending criteria, and irresponsibly sold an unaffordable product to the couple, which was secured on their home.

The Ombudsman’s final decision is here – >>> Ombudsman Decision  ( PDF )

The couple, represented by Govan Law Centre (GLC) could not pursue a claim against their independent financial advisor (IFA) firm, which had since folded, and the lender sought to hold the IFA responsible for any failing.

The Ombudsman said: “I did not consider that White Label had properly assessed how the loan would be affordable so far into Mr and Mrs C’s retirement”.

The Ombudsman ordered the lender to release the couple from the current loan agreement, effectively writing off £100,000 in terms of the secured loan agreement.

The couple’s solicitor, GLC’s Mike Dailly (pictured) said: “This is a fantastic result for our clients who would have otherwise been looking at repossession.

“It raises two important principles: first, that a lender is ultimately responsible for their own product and cannot always avoid liability by pointing to a third party financial advisor who sold their product as an intermediary, and secondly, a lender has to adhere to its own lending criteria and make sufficient enquiries to assess affordability.”

 

via Scottish Legal News | News.

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Men On Trial For Romance Scam | Get Safe Online

Four men have appeared in Winchester Crown Court in connection with an alleged romance scam which defrauded vulnerable women out of £220,000. One victim lost £174,000.

The women responded to a fake profile on the match.com website of an ‘attractive middle aged man’, following which a relationship developed and money was requested. The non-existent suitor, going under the name of James Richards, was said to be due to inherit £100 million from his father, but the fortune was tied up by Indian bureaucracy. The victims were initially asked by a bogus solicitor named ‘Rod Thompson’ to pay a £700 legal fee, a sum which subsequently increased by anything from £10,000 to as much as £100,000. One unfortunate victim – Suzanne Hardman from Basingstoke – lost £174,000, whilst others had a lucky escape by realising that the online romance was a scam.

via Men On Trial For Romance Scam | Get Safe Online.

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Payday loan firms ‘bombarding vulnerable consumers’ – BT

People in debt are being plagued by nuisance calls from payday loan companies offering them even more credit, new research from StepChange Debt Charity has revealed.

A survey of people contacting the charity’s helpline found that almost a third (32%) were receiving unsolicited marketing calls from payday loan firms. On average, these clients were contacted 10 times per week, and were offered the opportunity to take out further high-cost credit despite already being in financial difficulty.

Some 15% of those who received such messages went on to take out payday loans, borrowing an average of £980 with one or more lenders as a direct result of the calls. The charity has serious concerns that these additional loans will almost certainly lead indebted consumers into even greater financial problems.

Mike O’Connor, Chief Executive of StepChange Debt Charity, said: “Nuisance marketing calls can be harmful and push financially vulnerable consumers deeper in the downward spiral of unsustainable borrowing.

“For those in financial difficulty, the offer of an easy, no-questions asked loan can seem like a financial lifeline. The reality is that it can be a financial noose around the neck of vulnerable people and their families.”

via Payday loan firms ‘bombarding vulnerable consumers’ – BT.

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BBC News – Domestic abuse crime considered by ministers

A new crime of domestic abuse could be created under plans being considered by ministers.

Home Secretary Theresa May is consulting on creating the offence in England and Wales as part of attempts to improve police performance.

Existing law already covers coercive and controlling behaviour – but it does not explicitly apply to relationships.

Earlier this year Mrs May ordered chief constables to come up with domestic abuse action plans by September.

Last year ministers redefined domestic abuse, telling forces and other criminal justice agencies that it included both violence and acts of psychological control that left victims in terror.

There are a string of laws that already cover acts of violence, stalking and harassment – but none of them refer in their wording to personal relationships or the precise terms of the official definition of domestic abuse.

via BBC News – Domestic abuse crime considered by ministers.

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Online pawnbroker ad banned for encouraging ‘frivolous’ borrowing | Money | theguardian.com

An ad for an online pawnbroker has been banned for encouraging “frivolous” spending of borrowed money when it suggested using a loan to buy a Caribbean holiday.

The television ad for Borro.com featured a couple talking about how the money could do “so many amazing things” such as “help start a business, pay school fees” or “fly us to the Caribbean”.

On-screen text listed a representative APR of 69% before a voiceover said: “With Borro, you can secure a loan using assets like jewellery, art, antiques. It’s fast, easy, and there’s never a credit check.”

Three viewers claimed the ad irresponsibly encouraged consumers to borrow money for non-essential purposes.

The ad clearance service Clearcast, which responded on Borro.com’s behalf, said although holidays might be seen as a frivolous product on which to spend money, consumers would not be at risk if they were securing a loan against relatively small assets, such as a watch, whereas with other forms of lending, consumers’ property or salary might be at risk.

via Online pawnbroker ad banned for encouraging ‘frivolous’ borrowing | Money | theguardian.com.