Loan taken out under CCA 1974 where lender is now saying it is unregulated

[t111sho]

I took a £65,000 loan out in March 2008 with a major lender in the UK and signed a loan agreement which clearly stated that the loan and agreement were regulated under the Credit Consumer Act 1974. I was unaware of the £25,000 limitation for these loans under CCA 1974 that applied at that time. Under this loan agreement the lender was able to place a legal charge on my house. In 2009 my financial situation deteriorated and the loan fell into arrears and I negotiated a smaller sum to be paid that I could afford. Despite keepin up to date on these payments, the lender then took out a Possession Order on the house and I was given leave by the Court to apply for a Time Order. The lender objected to the Time Order in the Court and said through their barristers that the Loan Agreement I signed was wrong (due to the lenders error) and that it cannot be a regulated loan due to the amount. On this basis the Court refused the Time Order but gave me leave to appeal. The lender is also adding their legal costs to the loan amounts outstanding on an ongoing basis. There is no way I would have signed this loan agreement or allowed a charge to be taken on my house if I hed been made aware that the loan could suddenly become unregulated under the CCA. The Loan Agreement clearly states that the loan is regulated under the CCA. I am trying to prepare the Appeal douments (skeleton arguement and I cannot afford to pay a barrister) and would be grateful for any help that could assist me. I am suffering health wise through these issues and I am concerned that highly paid barristers will push through the case in the lenders favour when I feel I am the innocent party. I am at my wits end on this issue. Thank you.

[miliitant]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

i am looking into this for you but i believe all credit agreements became regulated on or after 6th april 2008

the amedments were made to the consumer credit act 2006

what date did you sign the loan (important)

if the agreement states its a regulated loan and its not, the loan is mis-stated and unenforceable

but only a judge can rule on that

lets go through another angle for the moment

was this loan done through a broker

[teaboy2]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

Militant is correct. Section 2 of consumer credit act 2006 removed limitations on amount that can be borrowed under regulated agreements under the consumer credit act 1974 setion 8 subsection 2 which limited the amount to £5,000 on regulated agreements under the original 1974 version of the act:

2Removal of financial limits etc.(1)In section 8 of the 1974 Act (which defines consumer credit agreements)—
(a)in subsection (1) for “personal” substitute “ consumer ”;
(b)subsection (2) shall cease to have effect.
(2)In section 15(1) of that Act (which defines consumer hire agreements) paragraph (c) and the “and” immediately preceding it shall cease to have effect.
(3)In section 43(3) of that Act (financial and other limits relating to regulation of advertisements) paragraph (a) and the “or” immediately after it shall cease to have effect.

Also the only agreements that are not excempt from being regulated under the consumer credit act 1974 are below:

16 Exempt agreements.(1)This Act does not regulate a consumer credit agreement where the creditor is a local authority . . . F1, or a body specified, or of a description specified, in an order made by the Secretary of State, being—
[F2(a)an insurer;]
(b)a friendly society,
(c)an organisation of employers or organisation of workers,
(d)a charity,
(e)a land improvement company, . . . F3
(f)a body corporate named or specifically referred to in any public general Act.
[F4(ff)a body corporate named or specifically referred to in an order made under—
section 156(4), 444(1) or 447(2)(a) of the Housing Act 1985 [F5section 156(4) of that Act as it has effect by virtue of section 17 of the Housing Act 1996 (the right to acquire),],
section [F6223 or 229 of the Housing (Scotland) Act 1987], or
Article 154(1)(a) or 156AA of the Housing (Northern Ireland) Order 1981 or Article 10(6A) of the Housing (Northern Ireland) Order 1983; or][F7, or
(g)a building society.][F8, or
[F9(h)a deposit-taker.]]
(2)Subsection (1) applies only where the agreement is—
(a)a debtor-creditor-supplier agreement financing—
(i)the purchase of land, or
(ii)the provision of dwellings on any land, and secured by a land mortgage on that land; or
(b)a debtor-creditor agreement secured by any land mortgage; or
(c)a debtor-creditor-supplier agreement financing a transaction which is a linked transaction in relation to—
(i)an agreement falling within paragraph (a), or
(ii)an agreement falling within paragraph (b) financing—
(aa)the purchase of any land, or
(bb)the provision of dwellings on any land,
and secured by a land mortgage on the land referred to in paragraph (a) or, as the case may be, the land referred to in sub-paragraph (ii).
[F10(3)Before he makes, varies or revokes an order under subsection (1), the Secretary of State must undertake the necessary consultation.
(3A)The necessary consultation means consultation with the bodies mentioned in the following table in relation to the provision under which the order is to be made, varied or revoked:

Therefore it appears the barrister is misleading the court by relying on the original inactment of the 1974 act when the 2006 act repealled section 8 subsection 2, therefore the barrister has no legal ground to rely on it. Especially if you signed the agreement in 2008 as you claim.

As such your gronds of appeal should be that section 8 subsection 2 of the consumer credit act 1974, which limited regulated credit agreement to sums of no more than £5,000 was repealled under the consumer credit act 2006 section 2 subsection 1(b), which removed all limitations, therefore making all credit agreements that are not excempt under section 16 of the consumer credit agreement 1974, regulated agreements irrespective of the amount of credit. As such the claiment can not rely on a point of law that was repealled prior to the signing of said agreement in March 2008! It would also be an error in law is a court was to allow the claiment to do so!

[t111sho]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

i am looking into this for you but i believe all credit agreements became regulated on or after 6th april 2008

Thank you Miliitant - I appreciate your help.

the amedments were made to the consumer credit act 2006

Yes, I am aware of this now but not at the time I signed the loan

what date did you sign the loan (important)

I signed on 22 March 2008 and the lender countersigned on 29th March 2008

if the agreement states its a regulated loan and its not, the loan is mis-stated and unenforceable

The loan agreement clearly states that it is regulated by the CCA 1974 and refers to this in several places on the agreement. . In fact, in the box where I signed, it states "This is a Credit Agreement is regulated by the Consumer credit Act 1974. Sign it ONLY if you want to be legally bound by it's terms.".

but only a judge can rule on that

Yes, I suppose that is so....

lets go through another angle for the moment

was this loan done through a broker

The loan was done through a broker who apparently ceased trading a number of years ago.

Regards

t111sho

[miliitant]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

you have enough to throw back at the claimant now thanks to teaboy2 post above

do you understand it though ???

[mystery1]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

http://www.legislation.gov.uk/uksi/2.../contents/made

6th April 2008 was when the limit changed.

M1

[teaboy2]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

I'd like to bet that the agreement was missold and was base don their new template for the upcoming changes on 6th april 2008. It (the agreement) was certainly misrepresentated to the OP by the creditor/broker and celarly stated on the agreement it was regulated, therefore making such statement a term of the agreement in my view.

[miliitant]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

as i have stated allready

only a court can decide if the agreement thats headed regulated, when it was not, is unenforceable

i would say it is unenforceable as its a misrepresentation to the borrower

[t111sho]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

Hi Miliitant and Teaboy2

Thanks for your posts. I regret I am still confused - sorry.

From recent research, I had understood that there was a limit of £25,000 on CCA 1974 regulated loans on the date that I signed the agreement. Mystery1's post above also states that the limit was changed in April 2008. (I presume this is the change on 6^th April 2008 from £25,000 to become unlimited - which was actually after I signed the loan agreement).

From what I am reading above it seems Teaboy2 is saying that the limits were repealed in 2006 and Section 8 subsection 2 removed at that time and that when I signed the loan there were no limits? Is my reading of this post correct?
Is Teaboy2 saying the limits in March 2008 were not £25,000? Teaboy2 also refers to an amount of £5,000 - is this amount relevant to when I signed my loan in March 2008 as I thought I had read recently that the limit was £25,000 in March 2008?
Teaboy2 is further suggesting the “As such your grounds of appeal should be that section 8 subsection 2 of the consumer credit act 1974, which limited regulated credit agreement to sums of no more than £5,000 was repealed under the consumer credit act 2006 section 2 subsection 1(b), which removed all limitations, therefore making all credit agreements that are not exempt under section 16 of the consumer credit agreement 1974, regulated agreements irrespective of the amount of credit.”
Thank you for the advice but could this please be further clarified as this advice seems to contradict with the existing understanding of the dates and limits under CCA when I signed the loan agreement.
The other issue you refer to on the possible “misrepresentation to the borrower” on the enforceability of the Agreement I would like to revisit once I understand the appeal advice above.
I am very grateful for your assistance.

[teaboy2]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

No the limited were reppealed in the 2006 act, but that relevant section of the 2006 act didn't come into force till 6th april 2008 as pointed out by Mystery1

However your arguement now is that the agreement stated it was regulated and as such, such statement should be a term of the agreement otherwise the creditor has clearly missold the agreement to you after leading you to believe it was regulated when it was not. Plus you can point out that as the agreement was created so close to section 2 of the consumer credit act 2006 coming into force, that the template used by the creditor for the agreement was clearly meant to be used on and after 6th of april 2006. The creditor admits to their making a mistake with the use of an agreement that stated regulated by the CCA 1974, however this mistake has not led as a result of the court judgement, to the debtors financial deteriment for a mistake made by the creditor for which the creditor admitted to as abeing a mistake by them.

If the agreement had been sign after 6th april 2006 and stated as not being regulated by the consumer credit act 1974, then a court would find it unenforceable, or would find it was indeed regulated and ruled in favour of defendant. There is no excuse for the claiment to have made the mistake that they had admitted to, and the defendant certainly should not be held legally liable when the creditor, admittedly, mistaking informed the defendant at the time of signing of the agreement that the agreement was regulated, when it was not. As the defendant, not havving the legal knowledge and being litigant in person, would not have had the legal advisors or knowledge to have know at the time of signing that it could not have possibly been regulated and relied upon the claiments representations at the time that it was regulated. If the defendant had know otherwise then the defendant would likely have not agreed to the agreement. The creditor/claiment has admitted the mistake an in doing so they have admitted that they misrepresented the agreement, as such the agreement can not be enforced at the debtors deteriment and should be declared null and void - otherwise the claiment is being allowed to commit and act akin to fraud under false representation to make a financial gain at the defendants financial loss, and the court would be punishing the defendant for nothing but mere lack of legal knowlege and for the creditors, admitted to, mistaken acts.

[t111sho]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

Thank you Teaboy2 that is very helpful clarification. I will try to construct an Appeal skeleton arguement based around that advice for the next hearing.

If you don't mind me asking a further related question: If the agreement is declared "null and void" - what then happens to (a) the repayment of the loan principal; (b) repayment of interest under the terms of the loan; (c) the legal charge over my house; (d) interest and principal already paid: and (e) legal and related costs already added to my loan my the lender?

Thank you again.

[pt2537]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

id disagree

The Court of Appeal (Gage LJ) in Rankine v MBNA said that the error in an agreement such as saying it is regulated when it isnt, really doesnt matter only to the extent that the contract looks to give rights which would only be available if the contract were regulated.

What i mean by this is for example if it is unregulated, but the contract says it is regulated and purports to provide a right of cancellation when strictly it is not cancellable, then the debtor can rely on the right in the contract to cancel, not as a right under the CCA but as a contractual right instead.

I dont think the issue of it saying its regulated impacts on the enforceability

[t111sho]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

Thank you for your post pt2537

In this case the loan agreement was signed by me and the legal charge agreed to only on the basis that the loan was to be regulated. When the Time Order was refused by the court it means that rights I thought I had had been taken from me. The argument I wish to make is that if I had been aware that the loan was not regulated I would not have entered into the relationship. The behaviour of the lender was therefore misleading and they should not be able to take additional action such as a obtain a possession order to my detriment as a result of their error and "misselling" of the loan. They are effectively profiting from their mistake or their maladministration in this situation.

Are you saying that this is the wrong approach?

Regards

[jhill]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

Hi - Have you got anywhere with this t111sho? I am in same position (although a lower amount) where a loan was executed on regulated paperwork although the lender now states that the loan is unregulated and they refuse to afford me the same protection as other debtors with loans for less than 25,000

[jhill]

Re: Loan taken out under CCA 1974 where lender is now saying it is unregulated

id disagree

The Court of Appeal (Gage LJ) in Rankine v MBNA said that the error in an agreement such as saying it is regulated when it isnt, really doesnt matter only to the extent that the contract looks to give rights which would only be available if the contract were regulated.

What i mean by this is for example if it is unregulated, but the contract says it is regulated and purports to provide a right of cancellation when strictly it is not cancellable, then the debtor can rely on the right in the contract to cancel, not as a right under the CCA but as a contractual right instead.

I dont think the issue of it saying its regulated impacts on the enforceability

Hi pt2537,

So can I ask your opinion on this....

If a loan taken out in July 2006 was executed on regulated paperwork but was for £30,000 (so at the time exceeded the £25k limit) should it still be given the same protection as a loan under £25,000?

Any help would be really appreciated...I can't get a straight answer on this anywhere.

Thanks!