News & Events
Unfair credit agreements
Updated
21st November 2009 
"I have heard that many credit agreements are not valid and, as a result of a legal loopholes, can be validly cancelled. Is this true?"
Zep Bellavia, Partner at Harding Evans Solicitors says:
It is true that the consumer protection legislation requires credit agreements to contain certain information by law. If it is missing or incorrectly stated then the credit agreement may be unenforceable. The Consumer Credit Act 1974 (and amendments) has long been on the statute books and was designed to protect consumers by requiring lenders to set out certain key information relating to credit agreements. Surprisingly, even though this legislation has been around for some time, many lenders have not complied with the rules with the result that many credit agreements may be considered legally unenforceable by the courts. This in turns means that consumers should not have to pay the outstanding sums claimed which are effectively then written off.
Many people may worry that they no longer have their original credit agreement and so are put off from taking it further. However, it does not matter if the original agreement has been lost as consumers have the right to request a copy of the agreement from the Lenders who are obliged, pursuant to the legislation, to respond.
"If you have a credit agreement which predates April 2007 which you would like reviewed then you should get in touch with solicitors to assist you. "
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The legislation applies to credit cards, overdrafts, loans and the like so long as they were taken out before April 2007. Often claims in respect of unfair credit agreements go hand in hand with claims for mis-sold Payment Protection Insurance (PPI). PPI is sold on the basis that it covers debt repayments if somone cannot work because of illness, redundancy etc. However, PPI is often mis-sold, which means that many people are left paying for expensive insurance policies which offer them no financial proctection should they need to make a claim If it can be establised that the policy was mis-sold it is possible to reclaim the insurance premiums plus interest.
If you have a credit agreement which predates April 2007 which you would like reviewed then you should get in touch with solicitors to assist you. They will advise whether your agreement complies with the law and if necessary obtain a copy from your Lender to be able to do this. This is a complex area of law and so it is important that you obtain advice from solicitors with specialist expertise in the area. The solicitor will also advise you on your options concerning ongoing payments due under the agreement. Most firms with established teams of lawyers working in this area of law will offer initial advice and assistance free of charge in order to assess a claim. If they consider there is a good claim they will often agree to take the matter up the Lender and, if necessary, pursue it to court on a no-win no-fee basis.