Bank on your money back
Shelagh Brownlow certainly got your interest when she appeared on Ladies@Lunch. Blackburn's Brownlow - who runs Brown Cow accountancy firm - revealed a recent change in the law means that you can be entitled to money back from loans and mortgages.
She explains how you could stake your claim on money you have paid out in charges and interest...
Have we heard right – we can recoup money from banks, building societies and loan companies?
Yes...if you meet certain criteria.
Who is eligible for a rebate?
Anyone who took out a mortgage, HP finance agreement or secured loan at anytime between 1990 and 1 April 2007 may be eligible for a minimum of £5,000 compensation.
It doesn’t matter if these loans have been repaid or not or it they have been transferred to another lender.
Anyone who took out a credit card or personal unsecured loan before 1 April 2007 which still have outstanding balances may be entitled to have the balance refunded and possibly they may be entitled to a refund of some of the interest, charges and repayments they have made.
Why has there been a change in the law?
In July 2007 provisions relating to unfair relationships between borrowers and lenders came into force under the Consumer Credit Act 2006 which updates and augments the 1974 Consumer Credit Act.
It aims to create fairer, clearer and more competitive consumer lender and to improve the protection available to consumers.
Many of the agreements are invalid, unenforceable or fundamentally flawed consumer credit agreements.
The Act enables borrowers to challenge credit agreements in Court on the grounds that the relationship between the lender and the borrower is unfair.
What advice would you give to people who say they can’t be bothered?
Potentially there is money owed to you which you have the chance of reclaiming for not a lot of effort and a reasonable fee. What could you do with that money? What difference could it make to you and your family?
For those people in debt this is like being given a second chance to get out of debt, repair your credit rating and start afresh having learnt a valuable lesson about managing credit.
Where else would you be able to spend £495 and receive at least £5,000 back in 12 months time?
Have you had much response?
I started doing the claims mid July and I have 25 going through the system so far. I have over 100 in the pipeline with people getting their cash together to make the claim. On top of that I have several of my own claims about to go through the system over the next 2 months.
What kind of recompense have your clients had?
The whole process takes around 12 months so my clients’ claims are at the early stages. However colleagues who made claims earlier in the year on behalf of clients have had several successes, including credit card balance write-offs, a £19,000 camper van HP agreement balance write off, compensation of £72,000 against a mortgage, which paid of the mortgage in full and a £39,000 mortgage being written off in full.
How much would you estimate you have got back for clients?
Too early for my clients, but the successes I’ve mentioned above amount to well over £150,000 and this is just at the start of raising people’s awareness.
How much do you think this could cost loan companies?
Difficult to say but it will be millions of pounds I’m sure.
Will an influx of people claiming monies back – put banks and building societies out of business in already uncertain times?
The lenders have made big profits over the years. They have been aware that these claims were on the horizon due to successful test cases back in 2005 and 2006. Many of them have already put provisions in their accounts for these claims and are still making profits so I’m sure they will survive. When the endowment policy mis-selling claims first started people predicted that this may cause the insurance companies to go out of business. As we know, this has not happened even though many people have had compensation.
last updated: 13/11/2008 at 08:22
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