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Managed Loan & CCA 2006


Principessa
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Hi there

 

Had originally posted this elswhere on consumer forums but think it should really be here - apols.

 

First posting to this site following recommendation from moneysavingexpert.com.

 

In early 2005, HSBC offered me a managed loan to replace my interest free overdraft, personal loan and credit card balances. They said that if I took out this loan, I could change back to a normal personal loan after 6 months. They also said that if I didn't enter into this loan they would issue legal proceedings on me to repay all that I owed them immediately. I had missed two payments of a personal loan (long story but had been out of the country) but had secured good employment upon my return and bank refused to wait one month for me to put all payments back in order. The amount I owed doubled immediately (to 16,000) and, three years later, having already paid them 9,000 the amount that I have paid to the "debt" is only 1,500 because of the huge interest rate. Needless to say, they refused to change to a normal personal loan after 6 months nor after a year. I have written to them on two separate occasions asking them to reconsider but they have only suggested that I write to the ombudsman which I have not yet done.

 

From my reading of the Consumer Credit Act 2006, I understand that the previously impossible section 140 of the CCA 1974 has been amended in relation to the provisions for Unfair relationships between creditors and debtors in that a court may make an order under section 140B if it determines that the relationship "is unfair to the debtor because of one or more of .....(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement; or © any other thing done (or not done) by, or on behalf of the creditor (either before or after the making of the agreement or any related agreement." and that (2) in decideing whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor)".

 

I understand that, under the transitional arrangements, the above will come into force on 6 April 2008 for agreements which were already in existence on 6 April 2007 (when the Act came into force). Does anyone have any experience of and/or information on this section of the 2006 Act? Does anyone know if it would be worth a try in claiming back the unreasonable amounts payable? What would be thought unreasonable? Would the terms of the previous Loan Agreement, overdraft facility and credit card be taken into account as "related agreements"?

 

Hope this makes sense. Any info greatly appreciated. :-|

 

P.

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Hiya Principessa and welcome to the HSBC forum, I'm not aware of anyone who has utilised the section of the CCA 2006 but I think the logic behind your post is sound and you should take the bank to court on that basis.

 

Managed loans are designed to get you out of trouble by extending the period of repayment and as the name suggests they should be managed (reviewed) by the bank periodically to make sure this is still the most suitable form of debt for each customer. This is never done by HSBC, they use them as a source of income at a horrendous interest rate.

 

I think from what you have posted you can prove to a court that the bank has been and is profiteering from your misfortune in 2005 and force them to commute this debt to a normal personal loan.

 

In addition to this I think you should investigate the charges that the bank have taken from you both from the accounts and cards that were rolled up into this loan and in the loan itself. To do this you will need to send them a Data Protection Act S.A.R - (Subject Access Request) letter to get copies of your statements for the last 6 years and find out exactly how much of this loan is down to your spending and how much is down to HSBC taking money from your accounts.

 

Good luck

 

pete

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