Thread: Swift ADvances & an Unregulated Agreement...Help!

This is on behalf of a very good friend of mine who has only just come clean about his finances.
This is for a loan based in Scotland.
He got into some financial difficulties and went to Ocean Finance who referred him to a company called 'Swift Advances'. With this, they have an unregulated credit agreement for a secured loan at a value of £55000.
A monthly variable rate of 1.17% which, is the same as a mortgage rate of 13.98%.
It was set up that they would make 144 variable monthly payments until the debt is cleared (strangely this variable rate has never come down!). He also had to pay a 'Title Insurance Premium' of £150 which he doesn't know what that was for.
This will all signed and agreed on 18th Oct 2004.
Back in May 2007, they asked for an early repayment quote and were told it would be £62000 despite them having already paid in excess of £28000 towards the original loan. He disputed this under the terms of the 1974 CCA but was told this did not cover his agreement as he signed to an unregulated agreement (he was told this on 14th May 2007)
Back on 31st May 2009 they received a reply from Swift Advances saying that their charges do not constitute a penalty under common law and they believe they satisfy the test of fairness under the Unfair Terms in Consumer Contracts Regulations 1999 ("UTCCRs")
The arrears charge is £23 admin Fees of £33, fees for using a Scottish Solicitor.
Up until 31st May 2007 (The most recent statement) they have paid
Arrears letters & Calls £253
7 bounced payment charges £231
Information to & from prior mortgagee £117
Other letter charges £ 12
Default Charge on 09/12/04 £990
Default Charge on 09/05/06 £110
Post default collection costs £1635
Litigation fees £1222.04
Scottish solicitors fees £384.08
So in total so far it's at £4954.12 and he's told me that has practically tripled in the past 2 years.
I now believe that the FSA or OFT decided that all agreements, even those before 2006 are subject to the unfair contract terms & conditions, even if it is an unregulated agreement?
Is that the case and if so, how do you suggest my friend to proceed?
I'm happy to help and do his PPI and Charges claims from other accounts but am not sure how to approach this one.
I will however still write to them and ask for a signed copy of the CCA and pay the £10 DPA for a full statement since the account started on Oct 04. But since there is a 'legal charge' on the property and it's unregulated - just how do I approach it and as for the APR, surely there must be some way of bringing that down or challenging the amount they have paid to get a much lower settlement figure?
They have never been given a copy of the fees and charges for the account - I want to claim back as much as possible for this friend, even though it's a secured loan, would it matter if they couldn't provide a CCA or are our hands tied?

Well, I've fired off a letter about the charges and have received a response saying they will investigate and write back to us by 24th September. As for the whole agreement, I've gotten my friend to head to CAB and ask to be put in touch with their pro-bono barristers as I don't believe it is legally enforceable.

In the meantime, I'm getting a copy of the charging order from the land registry and all other paperwork to check for inconsistencies. So far, all I have is the loan agreement form and a copy of my friends credit record showing substantial differences - if anyone can point me in other directions, please comment and let me know!

Having also done some further investigation into the company and it's directors, they have been very clever with most loans, upto 2006 they were registered with the FSA but you couldn't complain if the agreement was over £25k, then after losing their licence, they became members of the FLA to continue lending, however, you can only complain to the FLA about loans taken out since 2006. The financial Ombudsman is taking no interest in individual cases - I am however trying to find out more as I believe there is a great deal of criminality in this organisation.

So, I'm now looking for two things, how to get my friends money back and prove the agreement was never legal AND some evidence to try to prosecute directors for money lending etc.

I've been giving this some thought and wondered how I would proceed based on the evidence to hand. I eventually came up with a two-pronged attack. One part, on the basis of unenforceable charges due to a non-compliant agreement and the other on the basis of them not being permitted to enter into this type of lernding in the first place.

I concluded that if they weren't legaly competent to make the agreement, I couldn't be legally liable for extra costs attached to any misdemeanours or defaults under said agreement.

I think it all comes down to them not being legally entitled to conduct lending business in the first place, which seems i serious doubt. Given these shaky foundations, I doubt very much that the directors will want to see the inside of a court room and that a formal investigation by the FSA is the last thing they'd enjoy.

I don't know if it is a criminal offence to offer loans without an appropriate licence, but if it isn't it begs the question of why so many large firms go to the trouble of acquiring them if others feel they don't need to?

I would love this to imply that the whole loan is bogus and therefore the capital doesn't need to be repaid, but I'm not that optimisitic. I do wholeheartedly believe though, that some (a large part) of the interest should be commuted and that all ofthe charges be ignored completely as since the company wasn't licenced to offer the contract, it's terms logically cannot be enforced.

So who do you complain to about an unregulated agreement. I want to complain against Blemain as my loan is over £35k and they are not regulated by fos so who is?

Any help would be great, thanks

At first glance this seems to fall down a big crack between the old and new legislation.

Given the history of financial services in Britain my guess is that there will have been an overlap just as there was when the FSA took over from IMRO and LAUTRO. I haven't yet been able to discover who was responsible for this kind of business at the relevant date but I'll keep digging.

According to FISA's website, "any firm selling insurance, including that with a secured loan, must be registered with the FSA" which suggests that the FSA would be their regulator.

Confusingly the white paper on proposed regulation of secured lending states that currently first charge lending (mortgages) is regulated by the FSA whilst second charges and unsecured lending is the responsibility of the Office of Fair Trading under the CCA.

It might also be worth contacting your local MP. At this time they might be keen to help you and deflect attention from the expenses scandal many are embroiled in.

landy alert also mentioned the possibility of unenforceable agreements, so its a good idea to go through yours in detail - you never know what you might find!