How is it possible?

The Consumer Credit Act 1974 sets out very stringent requirements that a lender i.e. bank, credit card company must comply with when lending money. If any of the requirements are not met, then the lender may not demand that you repay the balance on  the loan or credit card. Examples which may cause the loan/credit card to be invalid are:

• A requirement that Payment Protection Insurance is taken out;
  
  
• Incorrect calculation of interest and/or charges
  
  
• An increase of a credit limit without you signing a new agreement
  
  
• Incorrect cancellation periods
  
  
• Incorrect cancellation notices

The scale of the problem for the debt industry is beyond comprehension and will effect millions of applications.

• “Some people who took out loans with specialist lenders in the late 80s and 90s could find the agreement was incorrectly drawn up, and so may not have to pay a penny more”. (source BBC news)
  
  
• “Millions of personal loan agreements could be unenforceable because banks and other lenders fail to factor-in the cost of controversial payment protection insurance (PPI) into annual percentage rates (APRs). (source the guardian)

One example of a sucess with unfair debt was when a couple's debt, which had risen to £384,000 from an original £5,750 loan. Tony and Michelle Meadows borrowed the money 15 years ago to install central heating at their home in Southport, Merseyside, and were persuaded to borrow more to pay off their mortgage arrears. Under the "compounded" interest rate, they were charged 34.9 per cent on the arrears as well as on the repayments, all of which resulted in the debt multiplying to 67 times the original amount.

Judge Howarth said the loan company, London North Securities, was imposing a condition amounting to "Hobson's choice". He said: "If [the Meadows couple] wanted the loan at all, they had to have their mortgage arrears paid off, which increased the amount they wanted by more than £2,000." The judge said this extra money was, in reality, a charge, that the loan had been mis-stated and was, therefore, unenforceable.

The couple's barrister, Paul Brant, said the decision would be welcome news to other people in serious debt. "This is a lifeline for borrowers who feel there is no hope," he said.

The judge granted the claimants leave to appeal. Source: Ratio Money

If you would like us to investigate the validity of any loan/credit card, then we will do so. You do not need to have the original documentation just the loan number(this will be on your bank statement) or credit card account number (this will be on your card or recent statement). We will then obtain from the lender a copy of any agreement and prepare a report for you. If the loan/credit card is invalid then we will be able to take action to wipe out the debt and remove loan/credit card from your credit file.