Wipe Out Your Existing Credit Agreement
Debt is rising in the UK at an unstoppable rate and the recession is simply exacerbating the problem. Many people have tried to make ends meet by putting large expenses onto their credit cards but this of course means they will pay hefty interest fees when they find they can't pay more than the minimum required payment when their monthly bills arrive on the doormat.
In the past year, several financial services companies have emerged who specialise in scrutinising your existing credit or loan agreements to see if they are valid or invalid, as there may be an opportunity to wipe them out completely. Banks and lenders are known on occasions to have included several unfair clauses, or omitted important information that should have been included in their credit agreements by law. These organisations are known as Unenforceable Credit Agreement companies.
Let's rewind a little. In 1974, the UK Government's financial regulatory body devised a set of conditions that directed the practices of credit card and loan companies, as covered by the Consumer Credit Act 1974. For permission to trade under this act, these lending companies had to abide by a very detailed and specific set of rules.
As time has progressed, it has become more and more evident that many individuals who had not paid their debts to these companies had avoided a court hearing. Furthermore, some of them were also managing to get their loans completely erased, so they had resulted in paying only a tiny fraction of what they owed, or in some cases, nothing. These debtors had effectively walked away from a whole range of loan types: secured and unsecured loans, hire purchase agreements, credit cards and store cards.
A credit agreement may be deemed by a specialist to be unenforceable if:
• The lender no longer possesses a copy of the credit/loan agreement
• The exact amount of credit (or credit limit) is not detailed on the agreement
• The interest rate has been calculated incorrectly
• The credit limit has been increased on a credit card without being formally requested
• The standard charges are considered to be unreasonable
• An adverse credit product has been sold to an applicant with good credit
• A deposit has been paid and but is not mentioned in the agreement
• The rate of APR is not stated, (NB some secured loans are variable rate)
• There is no mention of a 'cooling off' period in the agreement
• The applicant has not signed the agreement
• There is no mention of security on the agreement if the loan is secured
• That the loan is conditional on having Payment Protection Insurance (PPI).
Since the1974 Consumer Credit Act it has transpired that thousands of people with credit cards could have unenforceable credit agreements, which could result in these lenders losing millions. This is on the back of a multitude of examples of questionable practices by the UK's financial institutions, including the fiasco of dealing in sub-prime mortgages, the repayment of miss-sold PPI's and the payment of bonuses after a government bail-out. It could almost be said that with unenforceable credit agreements, consumers are getting their own back.
The UK's consumer protection laws deem that ANY credit agreement taken out prior to April 6th 2007 should be verified. But before you head off to the first Unenforceable Credit Agreement company (or Claims Company), it is advisable to check the following to ensure you are dealing with a reputable agent:
1. Are they Ministry of Justice Regulated?
2. What scope of agreements do they cover? The best companies should cover:
a. Agreements between £1000 and £25,000
b. Credit Cards
c. Secured Loans
d. Unsecured Loans
e. Payment Protection Insurance
f. Store Cards
g. Hire Purchase
h. Car Finance/Loans
i. Mortgages
j. Consolidation Loans
3. Do they provide a flat rate fee service?
4. If they find your agreement is enforceable, do they offer a 'money back guarantee'?
5. Is their service driven by results?
6. Do they deduct any fees or success commissions?
7. Do they provide "a conditional fee agreement" (CFA)?
8. Are they a specialist company, or have they recently moved into this sector because it was more profitable?
9. Do they use an Escrow account system?
10. Will you receive 100% of any recompense repaid by the lender?
Once you are satisfied that the Company will handle your claim the way you feel it should be handled, you may find that professional scrutiny of your credit agreements on any cards or loans may result in some of your debt headache being wiped away.