Is this an unfair term in a consumer contract?

[welshperson]

Hi

I’m looking for some impartial advice on some of the terms of my loan agreement,
And I would like to give you all a bit of background of why I am asking this question.

I have a high court case going on at the moment with a sub prime lender, which will have a significant impact on all lenders and borrowers, and I am having a difference of opinion with my solicitor over some of the terms of the agreement.

Now I have studied these terms and relevant law for over 2 years and I am finding it hard to believe that I am wrong, so I get impartial advice I wont put up any of my thoughts on this, but I would like some views on what to do and what legal argument to use if any.


The following are actual terms taken from my agreement, it is a variable interest rate and it is a consumer credit act regulated agreement.


1 “the lender may vary the rate of interest per month from time to time to take account of actual or expected changes in market conditions”

2 “rate means the higher of %5 above the base rate for the time being of the bank of Scotland or the highest rate payable under any credit agreement and the highest rate payable under the relevant agreement”



If you read number two correctly it says that the interest rate will go up if the bank of Scotland raise their interest rate, but if the interest rates fall then the interest on this agreement will never go down.

All opinions especially negative ones (to show were im going wrong) would be much appreciated.

wp

[labman]

Re: Is this an unfair term in a consumer contract?

2 “rate means the higher of %5 above the base rate for the time being of the bank of Scotland or the highest rate payable under any credit agreement and the highest rate payable under the relevant agreement”
wp

This is the bit that I find hard. If you remove the part in red, it is clear if the BOS rate goes up, so does the agreement, so if at inception BOS is 5% the agreement is 10%. If the BOS rate then falls to 3%, I read it that the agreement only falls to 10% still as, "the highest rate payable under the relevant agreement."

What confuses me is the part in red referring to, "the highest rate payable under any agreement" What is this supposed to mean, as it cannot mean literally ANY agreement?

[Hurricane Puffrose]

Re: Is this an unfair term in a consumer contract?

I had no idea what the terms meant, so I googled them, and i found a link to Wiki which showed that

he 'contra proferentem' rule is that where there is any ambiguity in regards to a clause it is to be interpreted against the party seeking to rely on it. Regulation 7 states this very clearly:[2] "(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language. (2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12."from what i read in to that you have some sort of grounds for clarfication of the terms of the loan in plain english

[welshperson]

Re: Is this an unfair term in a consumer contract?


wrong post

[welshperson]

Re: Is this an unfair term in a consumer contract?

This is the bit that I find hard. If you remove the part in red, it is clear if the BOS rate goes up, so does the agreement, so if at inception BOS is 5% the agreement is 10%. If the BOS rate then falls to 3%, I read it that the agreement only falls to 10% still as, "the highest rate payable under the relevant agreement."

What confuses me is the part in red referring to, "the highest rate payable under any agreement" What is this supposed to mean, as it cannot mean literally ANY agreement?

The part about any agreement relates to a consumer credit act regulated agreement or an un regulated agreement.

Wp3

[labman]

Re: Is this an unfair term in a consumer contract?

So they are saying or the highest rate payable under ANY agreement regulated under the CCA? Surely not.

[welshperson]

Re: Is this an unfair term in a consumer contract?

So they are saying or the highest rate payable under ANY agreement regulated under the CCA? Surely not.

Hard to believe but true

[labman]

Re: Is this an unfair term in a consumer contract?

Well that is ridiculous. They are writing into the T&C's that they intend charging the highest price on the market at all times. Madness!

[labman]

Re: Is this an unfair term in a consumer contract?

From a court's point of view I guess they'd be asking if you've suffered any consequential loss because of the clause. I can see a case with interest rates being so low that if you've had the loan for some years, the rate has come down, but your rate has remained the same.

Effectively the loan company would be making a lot more money from you in this case, but you signed the contract agreeing to this term.