Welcome Finance - Is This Enforceable??

[emanevs]

Hi,

 

Can anyone tell me if this agreement is enforceable?

 

I also have a legal charge on my property for this?

 

any help would be appreciated.

 

many thanks,

[steven4064]

It has the prescribed terms (amount of credit, number of payments, amount of payments) and your signature. It is therefore enforceable.

[emanevs]

hi, thanks for that!

[lawyerscum2003]

Not sure when you took the loan out but note that all Welcome Finance Agreements have an acceptance fee on them ( usually £75.00 ) and the smallprint below it indicates that they charge interest on it. This potentially has the effect of making the agreement unenforceable. Welcome are waiting until the outcome of the appeal in the case of Southern Pacific Personal Loans v Walker but potentially Welcome may have to write off thousands of loans where interest has been charged on the acceptance fee.

[emanevs]

I uploaded my old agreement, The one below is the correct one, and replaces the one you had a look at - sorry!

 

I have been charged £235 acceptance fee, plus over £2500 for mortgage indemnity fee. It appears that they charge interest on this amount, which is an obsene amount!!!

 

Here it is, any help would be most appreciated, and also what should I do next and how???????

[postggj]

Not sure when you took the loan out but note that all Welcome Finance Agreements have an acceptance fee on them ( usually £75.00 ) and the smallprint below it indicates that they charge interest on it. This potentially has the effect of making the agreement unenforceable. Welcome are waiting until the outcome of the appeal in the case of Southern Pacific Personal Loans v Walker but potentially Welcome may have to write off thousands of loans where interest has been charged on the acceptance fee.

 

 

do you have a link to the original case before the apppeal

[lawyerscum2003]

I need to know the date of the agreement. If its pre April 2007, it is unenforceable because they have charged interest on the acceptance fee.

[postggj]

lawerscum

 

are we talking wilson v fct on this

 

it only applies if its included in the amount of credit before calculating interest

[emanevs]

This agreement is from 2005.

 

Hope that helps!

[steven4064]

postggj is right - in fact it quite clearly says on the agreement that the acceptance fee is part of the total charge for credit rather than part of the loan - ie they haven't charged interest on it.

 

Is it possible to see the figures so we can check the TCC though?

[emanevs]

what figures do you need??, should i just take my name and addresses off it???

[lawyerscum2003]

there are only two "things" which can go on a CCA Agreement; a) Credit items and b) Charges

 

there are only 3 things which can be a part of the "Charges" under Reg 4 TCC 1980 a) interest on the loan b) charges and c) certain Insurance premiums (essentially compulsory PPIs)

"interest on a charge" is not a part of the "Charge" under Reg 4

the amount of the Charge cannot be added to the amount of the credit so as to take the amount over the £25k limit (ie say a loan of £24,500 and a Charge of £1000 ; ; one cannot add the £1000 to the £24,500 to go over £25000)

If the interest on the Charge cannot be a part of the Reg 4 Charges it MUST be part of the "credit".

 

Therefore imagine a loan of £24,500, a Charge of £1000 and interest on that charge of £1200 .

Now IF interest on the charge is credit one cannot add the £1000 to the loan to take it over the £25k limit but one MUST add the interest (if it is a credit item) of £1200 to the Loan and this does take it over the £25k limit.

This is re-enforced by the following 3 arguments:-

 

If interest can be added to a charge what is the difference between Reg 4 and Reg 5 items

S9(4) states that Charges must not be treated as credit (except by being paid by instalments). If you add interest to them then you are treating them EXACTLY as credit and there is then no difference between Reg 4 and 5

If one can add interest to a charge and interest to a premium then one must be able to add interest to the third item in Reg 4 namely the "interest on the credit". ie one tells the borrower that the interest on his loan is say £5000 and then you add interest to that figure ! (and as in Walker you don't actually tell him you just calculate the figures having added that interest).

[postggj]

lawerscum

i know where you are going with this and i believe that any charge for credit should not have interest applied to it.

i, myself have had a welcome agreement thrown out of court ref wilson v fct

 

might stephen or pt take this up

[lawyerscum2003]

the walker case is due to be heard in the court of appeal in October, I suspect it will fail, it may then go to the House of Lords. Welcome have advised that they will appeal any case they lose before the appeal is heard. They face catastrophe if the appeal fails, effectively having to write off years of loans. Boo hoo!

[postggj]

may i ask where you are getting this info ref welcome

 

your comment welcome have advised they will appeal any case

 

pm me if you need to

[emanevs]

Thanks for the help, but I am still unsure of what all this means for me?

 

The charge for credit is shown on the form as follows:

 

Acceptance fee (235) + Mortgage Indemnity Fee (2750) + interest charged (22,770.87)

 

Does this all mean that this agreement is unenforceable, and how to I go about getting this debt written off, including removed from the HM Land Registry???

 

Many thanks,

[lawyerscum2003]

am a solicitor with a few cases against welcome. Their solicitors have advised that any cases they lose on this issue prior to the outcome of the walker appeal will also be appealed. They may be bluffing but as I see it they have no real defence to the issue and can only potentially seek a stay pending the outcome of walker or, as I indicated, appeal any cases they lose

[emanevs]

I also have an questionable agreement with Northern Rock and is posted here:

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/207811-northern-rock-enforceable.html

 

Any help would be appreciated:

ps. What does this with welcome mean for me???

[steven4064]

It is why I want to see the figures - AFAICS, ATM, no interest is charged on the acceptance fee

[emanevs]

Hi,

 

Here we are, all figures,

 

many thanks,

[emanevs]

sorry, try again!!

Welcome amended2.pdf

[steven4064]

So what you have is a loan of 25k payable as 121 payments of 419.47

 

121 x 419.47 = 50755.87, which means the total cost of credit (TCC) is 25755.87, which is what they put at 'L'. The APR is actually 17.4% not the 17.3% they give, but that is within the tolerance allowed. Nominal interest rate is 16.1%.

 

Now the 25755.87 has 3 components, interest of 22770.87 plus charges totalling 2985

 

If this 2985 is split into 121 parts (24.67) then the monthly repayments are 394.80 interest and 24.67 charges

 

If we ignore the charges and think of 25k being repaid as 121 payments of 394.80 we get a TCC of 22770.87 (which is what it should be with no charges) and a nominal interest rate of 14.5% (they give 14.00% which is not quite right but interest rate is not a prescribed term, ApR is 15.5% which is irrelevant here)

 

So I think there are some small errors in the interest rates given but otherwise it stacks up. THey have spread the charges over the period of the loan but have not charged interest on them. In other words, they form part of the TCC but not part of the loan.

[lawyerscum2003]

But the agreement itself says clearly on it that they will be charging interest on the acceptance fee.

[steven4064]

It does seem to say that but whichever way I arrange the numbers I can't get the 14% they get for the interest rate.

 

On that basis, you should probably go with what lawyerscum says and go for unenforceability because the acceptance fee is part of the total amount of credit rather than the total charge for credit

[emanevs]

any templates to help with telling them how it is???