Claims Management – The Truth
Thursday, 21. October 2010
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I have mixed views over my next piece. You see over the years I have recommended to clients that they make use of the law wherever they can to save money. One area that I have heavily promoted is covered by sections 99 and 100 of the Consumer Credit Act, better known as Voluntary Termination, whereby once you have paid half the total cost of the finance, you can simply hand the car back to the HP provider and they have to stand any loss between what would normally be required to settle the HP and the value of the car. When the CCA was revised the lenders and their representative body had the opportunity to change this daft piece of legislation but they were too late lodging their objections and the sections stood. So when I saw the rise of the companies that looked for loopholes in your credit card agreement or loan agreements in order to extricate you from the agreement shouldn’t I applaud it and support these companies? Actually I don’t, unless it is being done in order to remove people from severe hardship. The fact is that you entered into a legal agreement to repay money that you have borrowed and used so why should you remove yourself from the debt because you feel like it and because the lender missed off a sentence in the agreement? It seems that the courts are now taking similar views and finding more often in favour of the lender. This happened in the case of Brooks vs Northern Rock (Asset Management) PLC. I won’t go into the details but Brooks had an interest only loan over 10 years. She stopped paying after checking compliance details online with a claims management company, using their software, and being told that because the interest rate shown was believed to be incorrect all the figures were wrong and therefore the agreements was irredeemably unenforceable. At this stage she issued proceedings for a declaration of unenforceability, whilst the lender sought to strike out the claim and have judgement entered against her. She cited various items on the agreement that the claims management company suggested had been shown incorrectly but they lost, and costs were awarded to the lender. I don’t agree with the claims management approach unless the lender was intending to rip you off but if you follow this course be very careful when relying on the ‘findings’ of computer software or you may find yourself in the position of Ms Brooks. By Graham Hill
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- Warning over debt clearance claim (bbc.co.uk)
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