When is an agreement invalid?

[sleeplessella]

The signed loan agreement included insurance but it was admitted by the bank that no policy was put in place - would something like this make an agreement invalid and if it did what does an invalid agreement really mean - could I dispute the validity of any debt for example?

[miliitant]

Re: When is an agreement invalid?

please feel free to shoot me down on this folks if i am wrong

in my opinion the agreement would be unenforceable for the following reason if no such insurance policy existed

if the loan agreement had insurance written into the total amount of credit then the APR would be mis-stated, along with other factors such as repayments, cancelation rights, these being perscribed terms that are wrong comes to the conclusion that the agreement is no more than bog paper

just refunding the insurance elemant is no good as it is written into the t&c of the agreement

just my opinion though based on the CCA 1974

[bluebottle]

Re: When is an agreement invalid?

I have to agree with Militant. If insurance was included in the loan agreement and formed an integral part of the amount loaned, this would affect the APR. If the bank involved has now admitted no insurance policy exists, in my considered judgement, it would render the agreement invalid. If they argue otherwise, the onus is on the bank to prove the agreement is legally-valid, either by way of case law or statute law. It is not enough for them to wave a copy of the t & c's around. They might as well wave a blank sheet of paper around. The other thing that comes to mind is the Fraud Act 2006. If they told the OP insurance was to be included in the loan and at the time of doing so knew this to be untrue or subsequently discovered insurance did not exist, but said nothing to the OP and continued to take payments knowing this, then the agreement is based on fraud and totally unenforceable. Even after applying the Ghosh Test, I cannot see how the bank can even think about attempting to enforce such an agreement. In my considered judgement, a court would wipe the floor with them, unless they used a lawyer who was totally bent.

[Guest]

Re: When is an agreement invalid?

HI
It depends on weather the insurance was conditional or not.
If the loan was sold on conditon that the insurance was taken out, then the insurance cost should make up part of the total charge for credit along with the interest and other charges. This would of course effect the APR.

If the insurance was miss-sold it would not make the agreement unenforceable although the agreement would have to be re structured.

Unenforceablity would only come about firstly if the agreement was executed before April 2007 and also if the compulsorily insurance was included in the total credit. (Ala Wilson etc).

No criminal sanctions would be appropriate i am afraid it would be purely a civil action, much case law.

Peer

[Guest]

Re: When is an agreement invalid?

Friend of mine did his a while ago , it may prove useful.
Peter

APR,TCC and TAP and how they affect enforceability

[miliitant]

Re: When is an agreement invalid?

HI
It depends on weather the insurance was conditional or not.
If the loan was sold on conditon that the insurance was taken out, then the insurance cost should make up part of the total charge for credit along with the interest and other charges. This would of course effect the APR.

If the insurance was miss-sold it would not make the agreement unenforceable although the agreement would have to be re structured.

Unenforceablity would only come about firstly if the agreement was executed before April 2007 and also if the compulsorily insurance was included in the total credit. (Ala Wilson etc).

No criminal sanctions would be appropriate i am afraid it would be purely a civil action, much case law.

Peer

afternoon peter

i take it the agreement would also have to state "optional insurance" also to confirm the insurance was not compulsory at point of sale

are we talking wilson v first county trust

i thought that got super seeded so confirmation would be nice

many thanks

[sleeplessella]

Re: When is an agreement invalid?

The loan was only agreed on condition insurance was taken. However a document showing the breakdown of the loan states that this insurance was optional. The document details loan repayments, insurance premiums, interest, term of loan, etc. The insurance premium was brokered into the repayments over whole period of loan. Loan was taken out before 2007. This was a business loan does CCA 1974 apply?

[Streetwise]

Re: When is an agreement invalid?

Does the agreement anywhere say ( Credit agreement regulated by the consumer credit act 1974 ),

[Guest]

Re: When is an agreement invalid?

No not necessarily, you would have to calculate where it was by using the APR if it wasn't apparent from the agreement.
Wilson proved that these agreements are unenforceable.

The section of the act that enables this sanction, was repealed for agreements executed after April 2007

Peter

[Guest]

Re: When is an agreement invalid?

The loan was only agreed on condition insurance was taken. However a document showing the breakdown of the loan states that this insurance was optional. The document details loan repayments, insurance premiums, interest, term of loan, etc. The insurance premium was brokered into the repayments over whole period of loan. Loan was taken out before 2007. This was a business loan does CCA 1974 apply?

Yes unless it was a limited company or over 25K.

Peter

[sleeplessella]

Re: When is an agreement invalid?

Was at work for last post. Have now all info in front of me and yes top heading reads "Fixed Sum Loan Agreement regulated by the Consumer Credit Act 1974" At the bottom it states this agreement is not cancellable under the Consumer Credit Act 1974 etc.

The agreement shows information separate ie amount of loan, then amount of insurance loan followed by the total amount. Loan APR (variable) is shown as 12.4% Insurance APR as 11.6% then below it has a section for other financial information which shows arrangement fees and interest. It states that yearly interest rate for this is 11% fixed.

With regard to the rest of the SAR information shows "This customer has no insurance policies"

This was an ordinary partnership and the loan was less than 25K.

[Guest]

Re: When is an agreement invalid?

Hi
Could really do with having a look at the agreement.

In any event i would want to know why i was paying premiums for a none existent insurance.

Peter
------------------------------- merged -------------------------------
Hi sorry yes, it would be un-cancelable if it was signed at the creditors premises.

Peter

[sleeplessella]

Re: When is an agreement invalid?

The agreement was signed at the business premises.

Is it the figures you need to see or how the agreement is set out?

[sleeplessella]

Re: When is an agreement invalid?

Help I need further advice.

Thought I had cracked it with your help. I had just completed a letter to the DCA quoting the Consumer Credit Act and disputing the validity of the agreement when I found out that unenforceability is also dependent on having more than 9 months to pay on the debt and more than £2500 owing. There was only 4 payments left on this loan and the outstanding amount is less than £2500. Also the loan defaulted. Anyone got any better ideas regarding another route I can go. The only thing I can think of at present is that the DCA letter is still requesting the same amount of money which defaulted, this includes premiums for the policy which the bank has already admitted was never applied.

Any help appreciated - this is causing massive amounts of stress?

[Guest]

Re: When is an agreement invalid?

Help I need further advice.

Thought I had cracked it with your help. I had just completed a letter to the DCA quoting the Consumer Credit Act and disputing the validity of the agreement when I found out that unenforceability is also dependent on having more than 9 months to pay on the debt and more than £2500 owing. There was only 4 payments left on this loan and the outstanding amount is less than £2500. Also the loan defaulted. Anyone got any better ideas regarding another route I can go. The only thing I can think of at present is that the DCA letter is still requesting the same amount of money which defaulted, this includes premiums for the policy which the bank has already admitted was never applied.

Any help appreciated - this is causing massive amounts of stress?

Hi sorry not with you, if an agreement is unenforceable due to incorrect execution it was uneforceable from the date it was signed.

You wont get any money back of course but there is no cut off point.

Peter