Unregulated Secured Loan

[Unregulated&confused]

Been going around in circles for years trying to find an answer to this - wondered if anyone at all on here can help me?
We have an old unregulated loan (originally Picture Finance) which was secured on our property. Like many back then (2007), we were extremely vulnerable financially and had no idea what 'unregulated' meant. We soon came to learn that it means that the loan company can actually do whatever they want, and we have absolutely no protection whatsoever.
Rates rose when the base rate did, but never came down when it reduced. We were encouraged to borrow more than we wanted on a house valuation which it was never going to achieve. Also sold us PPI (since reclaimed) We never received any loan statements. Or settlement figures when we asked for them (this is a CCA breach in itself).
Long story short, we actually sold the house 2 years ago, 8 years into the 25 year loan term. The sale did not settle the mortgage and the loan, leaving us with a balance of £60000 still owing, which Idem (the current owners of the debt) very kindly let us take with us to our new 'home' as an 'unsecured loan' (no new agreement received). We were not allowed to keep any proceeds out to put a deposit on a new house, so we had no alternative but to rent.
Idem were strangely 'co-operative' throughout the whole sale process (I suppose they would be as they were getting a £23k bulk payment from the sale?) and seemed very keen to not be seen to be putting us in 'financial hardship' (their words). Problem is - they are. We are now effectively homeless, and despite good wages, cannot now get a deposit together for a house as we are paying rent and substantial monthly payments to them.
We did offer them a full and final settlement a few years ago - so tried that one - they didn't accept. But we have never missed a payment so they won't will they?
Now don't get me wrong, I accept that we borrowed the money, but I do believe we were taken advantage of by being sold an unregulated loan, so we appear to not have a leg to stand on regarding unfair interest, mis-selling or poor account admin .
I have been down every single route time and time again - not regulated as taken out Sep 2007 and over £25k (April 2008 and it would have been Regulated!). So FOS don't want to know. Anyone know if covered by CCA or governed by OFT? - Can't seem to find a definite answer.
Sorry for the long post but just desperate to know if anyone can help out - thinking I now need advice from someone a bit more legal minded?

[Kati]

Re: Unregulated Secured Loan

tagging [MENTION=48934]Debt Camel[/MENTION] [MENTION=551]pt2537[/MENTION] [MENTION=87380]Diana M[/MENTION];

[Debt Camel]

Re: Unregulated Secured Loan

My best suggestion is that you should consider bankruptcy. it is a shame you didn't do this 2 years ago, this huge unsecured loan is going to be a financial millstone around your necks.

[Unregulated&confused]

Re: Unregulated Secured Loan

My best suggestion is that you should consider bankruptcy. it is a shame you didn't do this 2 years ago, this huge unsecured loan is going to be a financial millstone around your necks.

Sadly never been an option due to partner's job. ��

[Brandy1234]

Re: Unregulated Secured Loan

Hi.

I read your post and wondered if you have checked the FCA register to see if IDEM are registered to carry on the regulated activity of debt collection?

[Unregulated&confused]

Re: Unregulated Secured Loan

Hi.

I read your post and wondered if you have checked the FCA register to see if IDEM are registered to carry on the regulated activity of debt collection?

Just looked and Idem Servicing (Trading name under Paragon Finance PLC) are 'Authorised' and FCA registered as a company - so I presume this means they are authorised to collect the money? The problem is that the original loan was not covered by FCA protection/regulations as it was over £25,000. But thank you. Any potential loopholes very much appreciated.

[Unregulated&confused]

Re: Unregulated Secured Loan

Anyone think the fact that the original agreement just says 'Non regulated' and not 'Not regulated by FCA/CCA etc' is explanatory enough? I mean, to someone who is not very legal minded Non regulated by what? Anything? All the paperwork/booklets we received with the loan agreement clearly states that they are regulated by the FCA and the FLA.

[Fred]

Re: Unregulated Secured Loan

Anyone think the fact that the original agreement just says 'Non regulated' and not 'Not regulated by FCA/CCA etc' is explanatory enough? I mean, to someone who is not very legal minded Non regulated by what? Anything? All the paperwork/booklets we received with the loan agreement clearly states that they are regulated by the FCA and the FLA.

To try & answer your question over "regulation" from what you have written so far would bring me to suggest, it is the loan itself which is "unregulated" by the Consumer Credit Act (CCA 1974 as amended) . The providers of the loans are mostly required to have license/s from the regulatory authority at the time. So, your loan is most likely from a licensed provider but "not regulated" by the CCA 1974 due to the date & amount of monies.

[Brandy1234]

Re: Unregulated Secured Loan

To try & answer your question over "regulation" from what you have written so far would bring me to suggest, it is the loan itself which is "unregulated" by the Consumer Credit Act (CCA 1974 as amended) . The providers of the loans are mostly required to have license/s from the regulatory authority at the time. So, your loan is most likely from a licensed provider but "not regulated" by the CCA 1974 due to the date & amount of monies.

Yes, I had a look, IDEM is a trading name of Paragon, so, yes, they are ok to collect on debts in that regard s'pose.

In regard to whether they are fairly collecting the money and caused you to sell your house and are collecting the 'shortfall (without an agreement), may boil down to whether the underlying - 'unregulated' product - was rightly sold to the correct type of customer, or not.

The CCA applies to all/any loan or financial accommodation of any sum amount, where one party is an individual. i.e: an ordinary consumer. The £25k cap was removed in or around 2006, as party to the amendment to the CCA 1974, and was amended 'retrospectively', so, it should no longer matter when the loan was actually taken out.

The only means by which Paragon/IDEM can rely they rightly sold an 'unregulated' product to an ordinary consumer, is if that ordinary consumer 'opted out' of CCA protection.

I think the issue is you may have signed a document which may have referred to 'self cert', however, that of itself, is not enough to say you opted out of consumer protection, unless it contains a/the prescribed declaration that confirms your net income and assets of over a prescribed amount of monies and certified as such by a certified Accountant.

In a nutshell, I suppose what I am saying here is: 'Unregulated' products were for 'business purposes' and for 'business customers'., they were not intended for sale to ordinary consumers.

[Brandy1234]

Re: Unregulated Secured Loan

Anyone think the fact that the original agreement just says 'Non regulated' and not 'Not regulated by FCA/CCA etc' is explanatory enough? I mean, to someone who is not very legal minded Non regulated by what? Anything? All the paperwork/booklets we received with the loan agreement clearly states that they are regulated by the FCA and the FLA.

No, I agree with you, simply stating 'non regulated' is not explanation enough, especially when the recipient has no idea what it means.

Being registered with the FCA is a regulatory requirement for any firm who intends to carry on certain activities in the UK to avoid breach of the Financial Services and Markets Act. You have found they are registered, so no issue there.

When it says 'non-regulated' they are simply saying the product is one which you agreed to and is one that you knew fell outside of the CCA after self certifying your income and the value of your asset/house.

But I s'pose a lot will depend on what paperwork you signed and whether the paperwork includes a declaration in prescribed form or not.

I should look closely at the loan agreement and it's terms and conditions to see if there is a 'declaration' included saying you took the loan out for business purposes, refers to your income and the value of your assets, and that you opted out of CCA protection if I were you as a starting point.

[Brandy1234]

Re: Unregulated Secured Loan

Just looked and Idem Servicing (Trading name under Paragon Finance PLC) are 'Authorised' and FCA registered as a company - so I presume this means they are authorised to collect the money? The problem is that the original loan was not covered by FCA protection/regulations as it was over £25,000. But thank you. Any potential loopholes very much appreciated.

Yep, they are covered, shows they are not in breach of the Financial Services and Markets Act to carry on the regulated activity of debt collecting.

It might help you to know, there is no financial limit under the CCA, you could have loaned a trillion, billion, ALL loans, or types of financial accommodation fall under the CCA unless you opt out of CCA protection. The amendments made to the CCA financial limit of £25k were made retrospectively in the CCA 2006 which amended the CCA 1974.

There are no 'loopholes', just the facts.

[meellis]

Re: Unregulated Secured Loan

Any loan taken before the amendment in 2006 is only covered against unfair relationship. The original loan was unregulated, ie out of CCA protection because at the time of taking out the loan it was above the £25,000 limit. When the CCA was amended unfortunately it wasn't retrospective so existing loans weren't brought into full CCA protection so you have to look into other arguments concerning an unfair relationship or whether they have been applying the terms correctly. There are a lot of people trapped in the same position with a lot of different lenders because of this exact situation, me being one.

[Brandy1234]

Re: Unregulated Secured Loan

Any loan taken before the amendment in 2006 is only covered against unfair relationship. The original loan was unregulated, ie out of CCA protection because at the time of taking out the loan it was above the £25,000 limit. When the CCA was amended unfortunately it wasn't retrospective so existing loans weren't brought into full CCA protection so you have to look into other arguments concerning an unfair relationship or whether they have been applying the terms correctly. There are a lot of people trapped in the same position with a lot of different lenders because of this exact situation, me being one.

Yes, unfair relationships are retrospective, but in relation to consumer lending, the financial limit was also removed totally, to provide greater protection for consumers.

The £25k limit or less, only figures, when you are talking 'business purpose':

. The £25,000 threshold will remain however, for ‘business lending’ where the borrower is an ‘individual’ (as defined) and the amount in question is £25,000 or less. Where the agreement contains representations made by the individual that the agreement is solely or mainly for business purposes, there is a rebuttable presumption that this will be sufficient to show that the agreement is for business purposes.

So, whenever a lender tells you the CCA does not apply, he is essentially alluring to the above understanding.

I do agree with you that there are a lot of people who appear to think things differently though.

[meellis]

Re: Unregulated Secured Loan

Sorry Brandy but you need to look at your information again. In 2006 unfair relationships replaced section that was classed as extortionate credit bargains in the original CCA, all new and existing agreements are covered by this as long as they were still in place in other words you cannot look at an agreement that had been finished and closed. The £25,000 was lifted for all new loans from the point that the 2006 provisions were implemented but were not retrospective to any existing agreements.
http://www.guildhallchambers.co.uk/f...litiesLWRF.pdf
Obviously if there has been a change that nobody is aware of and you can link to any site that outlines this then you are potentially sitting on a life line for a lot of victims so could please share this to help a great number of people, I certainly don't mind being wrong about my info.

[Fred]

Re: Unregulated Secured Loan

The CCA 25K limit was lifted in April 2008, so, all loans after this period were regulated by the CCA 1974, now it is the same as mortgages (MCD). Prior to this date loans (with a few limited exceptions) have the CCA 140 unfair relationships provision, which, is retrospective & carries a lot of weight in terms of how & what it can be used for, eg; harassment.......

There is also the UTCCR which applies.