Hi,

I am new to the forum and am looking for a second opinion on a loan agreement I am currently reviewing for my parents.

It relates to an incorrectly stated Total Amount of Credit and section 127(3) of CCA, which would render the agreement unenforceable by a court.

My parents' agreement is a 2005 Welcome Finance secured loan that has a number of problems with it. I am spending time researching the Consumer Credit Act just now and getting up to speed with what the potential issues could be, but this one below right now is jumping out at me.

My parents took their secured loan for £8000 from Welcome Finance in 2005. There was a product acceptance fee of £235 and a mortgage indemnity fee of £880. The agreement does not show the total charge for credit, but does show Total Amount of Credit @ £8000.00 and Total Amount of Loan @ £9115.00.

I'm not sure what all of the Prescribed terms are at this stage to look for (or where to find list of them, if someone could let me know what they all are/where I could find them to check, that would be great?!), but believe that Total Amount of Credit is.

After receiving a full statement of account from Welcome recently, it is clear that they have charged interest on £9115 (£8000 (loan)+£235 (acceptance fee)+£880 (mortgage indemnity fee)). This would then mean that the Prescribed Term of Total Amount of Credit @ £8000.00 was incorrectly stated on the agreement.

Also, on the copy of the executed agreement, although my parents had signed the document, there is no signature anywhere from Welcome Finance,

the box for their signature is blank, so it has only been signed by my parents, therefore also not satisfying condition 61(1)(a) of CCA.

Given these two occurances, I think that condition 127(3) would apply here, as 61(1)(a) was not complied with and the Total Amount of Credit is wrong therefore the Prescribed Terms are also incorrect. As this loan agreement is dated January 2005, 127(3) would definitely apply here.

There are a whole host of other items that are not compliant such as not receiving an advance copy before signing,

there were no cancellation details/rights on the agreement,

the agreement has been changed since signed and returned by my parents (customer number),

but I simply want to focus on above for now, as it potentially brings 127(3) into play if I am interpreting things right, without looking at any of these other items?

I would be really grateful if someone with more experience could give me their opinion on this and if you think I'm along the right lines and have a case under 127(3)?

If anyone has the time to give me a second opinion on this, or can post direct on to peterbard/postggj as a private message for me I would also greatly appreciate it.

Thanks in advance for any help you can give me as a newbie!

Looking at section 127 in more detail now it also says:

Section 127(4)(b) - The court shall not make an enforcement order under section 65(1) in the case of a cancellable agreement if — section 64(1) was not complied with.

section 64(1) - a notice in the prescribed form indicating the right of the debtor or hirer to cancel the agreement, how and when that right is exercisable, and the name and address of a person to whom notice of cancellation may be given must be included in every copy given to the debtor or hirer under section 62 or 63.

As my parents loan agreement contained nothing in relation to section 64(1) on cancellation, as above, it looks like the courts would also not enforce this agreement under 127(4)(b), as well as 127(3), as it is non compliant on both.

Again, is my logic correct here?

sadly people have now moved on and are no longer with us [refs removed]

if they already had a mortgage welcme cannot levy a MIF either.

someting sells here bigtime.

bet they have a whole manner of insurance too to reclaim.

i'd scan up that agreement

let the experts poke holes in it.

scan the required letters/agreements/sheets

as a picture[jpg] file

remove all pers info inc barcodes etc using paint program

but leave all figures and dates.

goto one of the many free online pdf converter websites

it would be better to upload a multipage pdf

than many single ones

or if you have PDF as an installed printer drive use that

or use word and save as pdf

open a new msg box here

hit go advanced below the msg box

hit manage attachments below that box

hit the add files button on the top right

hit select files, navigate to your file on your pc

hit upload files

NB:you can set where it goes in the post by hitting insert inline.

the hit reply button

dx

sadly people have now moved on and are no longer with us [refs removed]

 

if they already had a mortgage welcme cannot levy a MIF either.

 

someting sells here bigtime.

 

bet they have a whole manner of insurance too to reclaim.

 

i'd scan up that agreement

let the experts poke holes in it.

 

 

scan the required letters/agreements/sheets

as a picture[jpg] file

remove all pers info inc barcodes etc using paint program

but leave all figures and dates.

 

goto one of the many free online pdf converter websites

it would be better to upload a multipage pdf

than many single ones

or if you have PDF as an installed printer drive use that

or use word and save as pdf

open a new msg box here

hit go advanced below the msg box

hit manage attachments below that box

hit the add files button on the top right

hit select files, navigate to your file on your pc

hit upload files

NB:you can set where it goes in the post by hitting insert inline.

the hit reply button

dx

Thanks dx have attached the agreement. They also don't have PPI, needs to be straight challenge of enforceability I think

Agreement Dubbed v2.pdf

I can't seem to get the agreement up in a readable size, that was biggest I could get it. I tried linking to external photo sharing sites but can't as I've yet to make 10 posts

If anyone has time for a closer look I can send on privately to you until I can post a link to external site

FOLLOW THE GUIDE

it must be pdf!

dx

At last, have managed to upload the loan agreement into PDF format. I have attached it to this post.

If anyone with more knowledge could review and confirm my thoughts around section 127(3) and 127(4)(b) I would greatly appreciate any time you could take to give me some initial guidance. I'm pretty sure this agreement constitues an invocation of both clauses as outlined in my initial two posts above, but I'm new to the CCA and not an expert.

Hope everyone has a great Christmas tomorrow when it arrives!

Front_Loan_Agreement_Dubbed[1].pdf

unapproved

customer number showing

rotate it 90 first before pdfing it too

dx

Hi dx, I have edited out the customer number on the agreement (had left it in there initially as this number was not my parents account number). It was on the executed agreement that my parents originally signed, but Welcome have overwritten it at some stage after it was signed and sent back, which is forbidden after signature by either party. I have dubbed out both account numbers now, but left the line in to show where they scored through the original customer number.

Couldn't rotate before PDF, but shows as correct orientation on screen at this end.

New agreement now attached to this post and original updated also above.

Agreement Dubbed v2.pdf

MIF is unlawful

acceptance fee is unlawful

120*153.83=£18,459.60 total repayment

http://www.taxassist.co.uk/loancalculator.php

not even this makes sense!!

i think you could demand everythingt back + 8% stat.

dx

Thanks for this dx, I hadn't picked up on that yet.

On the executed agreement it states the Rate of Interest at 1.35%. Using the APR recon link above 21.8% APR equates to 19.88%/12 months = 1.6567%, not the 1.35% stated on the agreement, is that what you mean?

In terms of the MIF and acceptance fee being unlawful, how do you argue that, i.e. what does it contravene if you are to take them to court (which is my intention)? I'm trying to compile a full case against them before 4th January so any head start would really help me. I've had this case at the Ombudsman as a last step before court, but have had the Ombudsman agree to extend their appeal date until then (as they ruled against it being unenforceable up until now!) but I had none of the issues in all of these posts in my original case.

In terms of claiming everything back, has anyone ever done that before? In the case of my parents, they borrowed £8000 and have paid back way in excess of that already. My intention here was to use 127(3) and 127(4)(b) if I could to simply get the courts to write off the remaining balance, as my parents have already paid way more than they borrowed already, but are you saying that they could claim all of their money back, or just all of the fees (£235 + £880) back, plus 8%?

I really appreciate you taking the time to help me out here

not totally my ball game

hit the triangle and ask for advise

or await a few more members to see your thread obv we are quiet at present

dx

dx

Sorry for being a numpty dx, but where is the triangle to ask for advice? I nearly hit report post, but don't think I want to do that.

Also, hope you have a great Christmas tomorrow, thanks for all of your help to date

yea that one

dx

thx dx, have flagged it as you suggested to try and get some help before next week. Hope you had a nice Christmas yesterday !

BUMP

I'm looking for some advice on enforceability of a Welcome Loan agreement under section 127(3) and 127(4)(b) of CCA. It also looks like the interest amount/APR are also incorrectly stated on the agreement. Any second optinions anyone could give would be greatly appreciated, thanks!! I'm new to CCA and eforcement of agreements, but am pretty sure I have a case here, but need a more experienced second opinion.

Section 127 (3) CCA was repealed so it can no longer be used.

 

Not sure why you are being told the MIF is recoverable, WFS v Griffiths case says it is lawful.

 

There is no guarantee that a court would give you 8%, the ombudsman usually does. As for a legal claim, this would have to be issued by your parents, you would not have locus standai in this matter.

 

Suggest you put in a SAR and see what comes back, you might find useful stuff in there.

Only for agreements entered into AFTER 2007. Therefore the OP could if applicable argue on that point.

You could send a private message to DonkeyB. Pop a link to your thread in the message and ask him to look in on you.

http://www.consumeractiongroup.co.uk/forum/showthread.php?226802-Welcome-Finance-Misols-Insurances/page2&highlight=reclaim+MIF

http://www.consumeractiongroup.co.uk/forum/showthread.php?266180

http://www.consumeractiongroup.co.uk/forum/showthread.php?304631-Welcome-Finance-PPI-and-Mr-Z&highlight=reclaim+MIF

dx

Hi BB

Do you have the opening statement of account for the loan?

If so can you sanitize it and post it up as a PDF please.

ims

can the required letters/agreements/sheets

as a picture[jpg] file

remove all pers info inc barcodes etc using paint program

but leave all figures and dates.

goto one of the many free online pdf converter websites

it would be better to upload a multipage pdf

than many single ones

or if you have PDF as an installed printer drive use that

or use word and save as pdf

open a new msg box here

hit go advanced below the msg box

hit manage attachments below that box

hit the add files button on the top right

hit select files, navigate to your file on your pc

hit upload files

NB:you can set where it goes in the post by hitting insert inline.

the hit reply button

dx

Hi

Also look at what APR actually means and what "interest rate" actually means.

1.35% pm is correct on the total loan amount of £9115. APR is correct on the amount of credit of £8000 plus the charges for MIF and Acceptance fee.

LoanAnalysis.xls

dx100uk, ims21, citizenB, dbablyon, thanks all for taking the time to read on post back on my thread, I really appreciate the time you have all taken out for me!!

I've attached the opening page of the statement of account. On the SOA it states amount of credit as £9115, the loan agreement says £8000, they don't match!

@ims21, although the 21.8% APR checks out in the .xls, it only checks out on £8000. On this statement of account, interest had been charged on much more than that, £9115. So if they have been applying £153.83 every month against £9115, that doesn't match the loan agreement at all.

The numbers at £9115 also mean a different APR rate

(from ims21 .xls):

Amount of loan: £9115

Term: 120 months

Repayment: £153.83

APR: 17.5% (says 21.8% on agreement or 1.35% per month)

This doesn't check out.

Also, if I reverse the APR rate to the monthly nominal rate of interest, it doesn't work back to 1.35% (pro-rated) in the link dx100uk gave me - http://www.taxassist.co.uk/loancalculator.php

* APR (%) 21.8

Nominal interest rate (%) 19.88

I can't get any of it to add up after looking at the opening page of statement of account. The SOA shows the interest rate at 16.2%.

I have requested full SAR on everything from Welcome today, but will take at least 40 days from now. Trouble is that I need to formulate an appeal before 4th January for the Ombudsman.

My main angle is the 127 sections above (127(3) and 127(4)(b)), but I can't see how the APR figure can check out now either and the credit amount in the executed loan agreement is not the same as teh credit amount quoted in the statement of account.

dx100uk, thanks for MIF links, I'll read them tonight!

Opening_Statement_of_Account Edited.pdf

21.8% is the APR. It is calculated on the amount of credit and is to include all other charges for credit.

On this agreement the MIF and the Acceptance fee are shown as charges for credit NOT an amount of credit.

21.8% does check out on an amount of credit of £8,000 as detailed on this agreement.

1.35% does check out on the total amount of the loan. 16.201% per annum divided by 12 = 1.35% per month.

Don't confuse interest rate with APR.

ims

I am not sure what the importance of January 4th is? If it is a response to the Ombudsman then you can in fact advise them that you require a bit more time as you have been given some information that you would like to investigate.