Tweet
In February 2007 Peter Bentley took out a secured loan for £40,000 with lender Blemain Finance. However soon after taking the loan he was forced to cut his working hours from 48 to 19 to care for his father who was suffering with Alzheimers, and he began having problems making his repayments.
The lender refused to accept lower payments on the loan and continued to chase Mr Bentley for the arrears and add interest and charges to his debt which grew to £47,000 by the time of the hearing at the High Court in Cardiff.
Mr Bentley approached Cartel Client Review for assistance with the debt after the lender began repossession proceedings against him to secure repayment of the loan. Cartel's solicitors, CCLS, argued that the agreement was unfair and Blemain had lent the money to him irresponsibly, taking advantage of his naivety, vulnerability and desperation. "The relationship between the parties was an unfair one within the meaning of Section 140A of the 1974 Consumer Credit Act," argued Andrew Settle of the law firm.
In negotiations prior to the hearing Blemain finance offered Mr Bentley a settlement which will be enforced by the court.
It said that in exchange for Mr Bentley withdrawing his argument that there had been an unfair relationship under the Act, and in exchange for agreeing not to pursue that legal argument against Blemain again, the finance firm agreed:
• to re-write the secured loan account, cutting the repayments to £150 a month
• not to levy any interest, charges or legal costs "whatsoever."
Blemain's repossession claim was dismissed and it was told it could not enforce repayment of the loan by this method for five years. After that, it can be enforced by repossession, but only if there are at least 12 months' arrears on the new level of payments, i.e. £1,800.
Section 140A of the 1974 Act (as amended) provides that a court may determine that the relationship between a lender and a borrower arising out of a credit agreement (or the agreement taken with any related agreement) is unfair to the borrower because of:
The courts have a wide range of powers where a credit relationship is found to be unfair, including:
The Office of Fair Trading: Unfair relationships - In addition to the Unfair Relationships parts of the Consumer Credit Act the OFT have issued guidance. The Office of Fair trading are also currently undertaking a consultation and investigation into second charge (secured) lending and into Irresponsible Lending - http://www.oft.gov.uk/shared_oft/con...oft1107con.pdf
BBC News - BBC NEWS | Business | Five-year block on repossession
The lender refused to accept lower payments on the loan and continued to chase Mr Bentley for the arrears and add interest and charges to his debt which grew to £47,000 by the time of the hearing at the High Court in Cardiff.
Mr Bentley approached Cartel Client Review for assistance with the debt after the lender began repossession proceedings against him to secure repayment of the loan. Cartel's solicitors, CCLS, argued that the agreement was unfair and Blemain had lent the money to him irresponsibly, taking advantage of his naivety, vulnerability and desperation. "The relationship between the parties was an unfair one within the meaning of Section 140A of the 1974 Consumer Credit Act," argued Andrew Settle of the law firm.
In negotiations prior to the hearing Blemain finance offered Mr Bentley a settlement which will be enforced by the court.
It said that in exchange for Mr Bentley withdrawing his argument that there had been an unfair relationship under the Act, and in exchange for agreeing not to pursue that legal argument against Blemain again, the finance firm agreed:
• to re-write the secured loan account, cutting the repayments to £150 a month
• not to levy any interest, charges or legal costs "whatsoever."
Blemain's repossession claim was dismissed and it was told it could not enforce repayment of the loan by this method for five years. After that, it can be enforced by repossession, but only if there are at least 12 months' arrears on the new level of payments, i.e. £1,800.
Section 140A of the 1974 Act (as amended) provides that a court may determine that the relationship between a lender and a borrower arising out of a credit agreement (or the agreement taken with any related agreement) is unfair to the borrower because of:
- any of the terms of the credit agreement or a related agreement
- the way in which the lender has exercised or enforced its rights under the credit agreement or a related agreement, or
- any other thing done (or not done) by or on behalf of the lender either before or after the making of the credit agreement or a related agreement.
The courts have a wide range of powers where a credit relationship is found to be unfair, including:
- altering the terms of the credit agreement or a related agreement
- reducing the amount payable by the borrower
- requiring the lender to refund money to the borrower
- removing any duty placed on the borrower under the agreement , and
- imposing requirements on the lender or an associate.
The Office of Fair Trading: Unfair relationships - In addition to the Unfair Relationships parts of the Consumer Credit Act the OFT have issued guidance. The Office of Fair trading are also currently undertaking a consultation and investigation into second charge (secured) lending and into Irresponsible Lending - http://www.oft.gov.uk/shared_oft/con...oft1107con.pdf
BBC News - BBC NEWS | Business | Five-year block on repossession
Comment