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2nd Charge Fairness and Enforceability Part 8 And CCA s.140 B


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This has dominated another thread for a few posts and has historically raised itself from time to time on that thread.

 

I want to be able to post on the issues raised and will do so soon.

 

I am unfortunately tied up at the moment.

 

To me the central issue is whether Part 8 of the Enterprise Act 2002 can be of benefit to consumers in a situation where they have 2nd charges on loans/mortgages, particularly those concluded before commencement of the CCA 2006 where the limit was obviously 25K for CCA regulation under the 74 act. There seems to be much confusion and little in the way of definitive answers.

 

I will make myself more clear later. Hope this rather poor start to the thread makes sense to those already interested in this issue.

Keep the faith. EiE.

 

Capstone Mortgage 'Services' - Sub-prime garbage - unlawful behaviour/MULTIPLE consumer abuse, TOTALLY in Defiance of REGULATIONS and the law

 

http://www.fsa.gov.uk/pubs/final/gmac_rfc.pdf

 

CONTACT CIB Here

 

http://www.insolvency.gov.uk/Complaintformcib.Htm

 

Kevin Hughes(Compliance Manager-main) @ 02920 380 633

 

Lee Jenkins(prosecuting Amany Attia) 02920 380 643

 

Mark Youde(accounts compliance) 02920 380 955

 

Charlotte Allan @ 0207 596 6108 investigating all the Lehman lenders

 

Jeremy Pilcher 0207 637 6231

 

NO KAGGA LEFT BEHIND...

 

"We would not seek a battle, as we are; Nor, as we are, we say we will not shun it"

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This has dominated another thread for a few posts and has historically raised itself from time to time on that thread.

 

I want to be able to post on the issues raised and will do so soon.

 

I am unfortunately tied up at the moment.

 

To me the central issue is whether Part 8 of the Enterprise Act 2002 can be of benefit to consumers in a situation where they have 2nd charges on loans/mortgages, particularly those concluded before commencement of the CCA 2006 where the limit was obviously 25K for CCA regulation under the 74 act. There seems to be much confusion and little in the way of definitive answers.

 

I will make myself more clear later. Hope this rather poor start to the thread makes sense to those already interested in this issue.

 

Excellent EIE, I am so glad that this thread has been started. I will post up some very good info that will be very helpful and useful for everyone.

 

Just a thought, would it not be better and more eye catching if you put "unfair relationship" in the title.

 

Just my opinion :D

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To me the central issue is whether Part 8 of the Enterprise Act 2002 can be of benefit to consumers in a situation where they have 2nd charges on loans/mortgages, particularly those concluded before commencement of the CCA 2006 where the limit was obviously 25K for CCA regulation under the 74 act. There seems to be much confusion and little in the way of definitive answers.

 

Short answer is Yes

 

 

Long Answer is:

 

The unfair relationships provisions apply to credit agreements whether regulated or not, and regardless of the amount of credit extended.

 

The sole exception is where an agreement is exempt under section 16(6C) of the 1974 Act because it is a regulated mortgage contract under the Financial Services and Markets Act 2000.

In all other respects, the provisions apply to exempt agreements including those which will be exempt by virtue of section 16A (high net worth borrowers) or section 16B (business lending for more than £25,000) of the 1974 Act.

 

The above is taken from

 

http://www.newham.gov.uk/NR/rdonlyres/5FDEE9F6-7EEF-4B26-B53C-A419BC5C8D41/0/OFTUnfairRelationships.pdf

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The sole exception is where an agreement is exempt under section 16(6C) of the 1974 Act because it is a regulated mortgage contract under the Financial Services and Markets Act 2000.

 

The one and only exception of the applicability of s.140 is:

 

(6C) This Act does not regulate a consumer credit agreement if—

 

(a) it is secured by a land mortgage; and

 

(b) entering into that agreement as lender is a regulated activity for the purposes of the Financial Services and Markets Act 2000.

 

The FSMA 2000, in this context applies to new first charge mortgages after 31 October 2004

 

http://www.opsi.gov.uk/si/si2001/20010544.htm#61

 

(a) a "regulated mortgage contract" means a contract under which -

 

(i) a person ("the lender") provides credit to an individual or to trustees ("the borrower"); and

 

(ii) the obligation of the borrower to repay is secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom, at least 40% of which is used, or is intended to be used, as or in connection with a dwelling by the borrower or (in the case of credit provided to trustees) by an individual who is a beneficiary of the trust, or by a related person;

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Whilst I agree that unfair might have been better in the title as sue has found out to his own chagrin once chosen you cannot change the thread title. If it's that important a mod can merge this with a new thread with a better title.

 

Sue it looks like a little role reversal may occur here. I'm determined to prove the negative if such a thing were even possible. Part 8 seems very powerful to me. But I am unconvinced of its capacity to apply in the circumstances discussed on the other thread.

Keep the faith. EiE.

 

Capstone Mortgage 'Services' - Sub-prime garbage - unlawful behaviour/MULTIPLE consumer abuse, TOTALLY in Defiance of REGULATIONS and the law

 

http://www.fsa.gov.uk/pubs/final/gmac_rfc.pdf

 

CONTACT CIB Here

 

http://www.insolvency.gov.uk/Complaintformcib.Htm

 

Kevin Hughes(Compliance Manager-main) @ 02920 380 633

 

Lee Jenkins(prosecuting Amany Attia) 02920 380 643

 

Mark Youde(accounts compliance) 02920 380 955

 

Charlotte Allan @ 0207 596 6108 investigating all the Lehman lenders

 

Jeremy Pilcher 0207 637 6231

 

NO KAGGA LEFT BEHIND...

 

"We would not seek a battle, as we are; Nor, as we are, we say we will not shun it"

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The one and only exception of the applicability of s.140 is:

 

(6C) This Act does not regulate a consumer credit agreement if—

 

(a) it is secured by a land mortgage; and

 

(b) entering into that agreement as lender is a regulated activity for the purposes of the Financial Services and Markets Act 2000.

 

The FSMA 2000, in this context applies to new first charge mortgages after 31 October 2004

 

So that means we can use the unfair relationship test to challenge our agreements? EIE is like me and many others searched for this very important answer for very long.

 

So one cannot use the unfair relationship if you have a the lender is regulated by the FSA? and as many sub-prime lenders are not regulated by the FSA then it is alright for us to use the unfair relationship test?

 

Sue you have posted a lot of great stuff and info, your scales have been tipped:D

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Whilst I agree that unfair might have been better in the title as sue has found out to his own chagrin once chosen you cannot change the thread title. If it's that important a mod can merge this with a new thread with a better title.

 

Sue it looks like a little role reversal may occur here. I'm determined to prove the negative if such a thing were even possible. Part 8 seems very powerful to me. But I am unconvinced of its capacity to apply in the circumstances discussed on the other thread.

 

Oi be careful, people will start calling you names :cool:

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That's because you've gone soft and given the answer people want to hear! :p

 

LOL!

Keep the faith. EiE.

 

Capstone Mortgage 'Services' - Sub-prime garbage - unlawful behaviour/MULTIPLE consumer abuse, TOTALLY in Defiance of REGULATIONS and the law

 

http://www.fsa.gov.uk/pubs/final/gmac_rfc.pdf

 

CONTACT CIB Here

 

http://www.insolvency.gov.uk/Complaintformcib.Htm

 

Kevin Hughes(Compliance Manager-main) @ 02920 380 633

 

Lee Jenkins(prosecuting Amany Attia) 02920 380 643

 

Mark Youde(accounts compliance) 02920 380 955

 

Charlotte Allan @ 0207 596 6108 investigating all the Lehman lenders

 

Jeremy Pilcher 0207 637 6231

 

NO KAGGA LEFT BEHIND...

 

"We would not seek a battle, as we are; Nor, as we are, we say we will not shun it"

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With regard to part 8, the following is taken from the OFT document

 

Unfair relationships and the circumstances that give rise to them may also be addressed using enforcement powers under Part 8 of the Enterprise Act 2002 ('Part 8'). These powers cover situations where businesses infringe their legal obligations and as a result harm the collective interests of consumers.

 

The Office of Fair Trading (OFT) is one of the principal enforcement authorities in relation to Part 8, and we also co-ordinate the actions of other Part 8 enforcers including Local Authority Trading Standards Services (TSS).

 

A summary of the provisions of Part 8, and the OFT’s approach to enforcement, can be found in Enforcement of consumer protection legislation: Guidance on Part 8 of the Enterprise Act (OFT512).

 

The 2006 Act requires the OFT to publish guidance indicating how it expects the unfair relationships provisions to interact with Part 8. This is intended principally as advice and information for businesses, their legal advisers or representatives, and consumer organisations.

 

This guidance does not seek to define what is an 'unfair relationship' but rather to indicate how Part 8 powers might be used in this area. It is for the court to determine whether there is an unfair relationship in an individual case. The courts are not required to have regard to OFT guidance, although they may choose to do so if they consider it to be relevant in the particular case.

 

The guidance may nevertheless be helpful to businesses and consumers by indicating the kinds of factors that are likely to influence the OFT's consideration under Part 8. Such factors may also be relevant to the court's consideration in individual cases involving allegations of unfair relationships.

 

The OFT will act under Part 8 only if it considers that there is a reasonable prospect of success in any court action, which in turn will depend upon how we believe a court would be likely to interpret and apply the unfair relationships test in the particular circumstances.

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The OFT will act under Part 8 only if it considers that there is a reasonable prospect of success in any court action, which in turn will depend upon how we believe a court would be likely to interpret and apply the unfair relationships test in the particular circumstances.

 

Sounds a little wishy washy

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Hi everyone

Just thought I would post what i found on the FSA Website or was it the OFT website oh pooh I cant remember ! anyway one of them lol!!

I hope this helps someone !!

 

Under the Unfair Terms in Consumer Contracts Regulations a department of the Office of Fair Trading (OFT) known as the Unfair Contract Terms Unit deals with unfair terms in consumer contracts.

Members of the public can notify the OFT if they consider a contract term to be unfair. The OFT can try and negotiate changes to the contract if it is unfair. Or take out a court injunction to stop the contract term being used in the future.

 

Speech by Katherine Webster, Manager of the Unfair Contract Terms Team, FSA

CML's 7th annual legal issues for mortgage lenders conference

13 January 2009

There are some limits to the mortgage contracts we can look at under the Regulations - for example, we look only at first charge mortgages. Second charge and buy-to-let mortgage contracts fall to the Office of Fair Trading (OFT), the principal enforcer of the Regulations, for consideration. We have an agreement - a Concordat - with the OFT setting out our respective responsibilities for financial services contracts under the Regulations. The Concordat is available on our website but, broadly speaking, we deal with contracts from authorised firms carrying out regulated activities and the OFT deals with all other standard-form financial services contracts.:)

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Good info there cher69.

 

Right, now that we have established that many of us can challenge our loans and agreements using the unfair relationship test and use this to our advantage, it will still be an uphill struggle for consumers.

 

We open one door and find another one closed, open that one and there's another one to open, and so on. These financial institutions will fight us all the way even though they are wrong, but they would rather cut off their nose to spite their face as they would say. This should not put anyone off though.

 

My situation is that I believed that there were many flaws in my loan agreement and have been searching high and low to get some proper and sound advice before I sought legal advice. I have received a lot of valuable advice from many caggers which has helped get as far as I have today.

 

I contacted two claim companies in the past on a no win no fee basis. Initially they took on my case and advised that I did have a claim for secret commission, but half way through they said that they could no longer act for me and closed my file. No reason or explanation given. I then contacted Cartal Client Review, which a representative came to my house and told me that my agreement was totally unenforceable and I should start packing as I would be going to the Bahamas as they were going to write off my loan because of all the flaws in my loan agreement.

 

I though that it was too good to be true so done some investigating and sought advice and it was a bloody good job that I did not pay the £495 that was being asked from CCR, considering what happened to them not long ago. Lucky escape. Anyway I then instructed a no win no fee solicitors firm. They have been acting for me since last year in Oct 09. I have written so much info to them and have sent so much evidence to support my case, but I really do believe they do not know what they are doing and I am currently deciding on whether I should fight my case on my own.

 

This is the last response that I have received from my solicitors, which in all honesty is such a load of codswollop.

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/Solicitorsresponse1.jpg

http://i450.photobucket.com/albums/qq223/sophiak_bucket/Solicitorsresponse2-1.jpg

http://i450.photobucket.com/albums/qq223/sophiak_bucket/Solicirorsresponse3.jpg

 

My loan has not reduced a single pence even though interest rates were at a low.

 

Basically all they are saying is that I can claim back the secret commission plus interest that I paid. I think I am quite capable of claiming that back myself without any help from them. I was given a loan whilst in receipt of benefits an receiving DLA. My OH applied for the laon and is not fluent in English and showed no proof of income and done self-cert. I believe that we were loaned this money irresponsibly, but my solicitor believes that I am a capable of communicating ao cannot use the unfair relationship route. Does that mean that anyone who can read and write cannot use the UF?

 

looks like my solicitor is more keen on me requesting my file back that to fight my claim. I have responded to this letter above and will wait to see what response he gives before making a decision on what to do next.

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With respect frettful, my reading is that the response is reasonable. Solicitors can only proceed under a no win no fee if they think there is prospect of success - if they lose their fee is paid by insurance and the insurance won't pay if they think otherwise. I'd say you need a stronger argument to declare enforceability.

 

I would be asking:

Were you ill at the time you took out the loan?

Were you under pressure e.g. repossession action?

Did you have any debts/CCJs at the time of taking out the loan?

 

Did the lender use repossession as first resort?

Did the lender pile on the charges?

 

Hmm that's all I can think of at the moment.

 

County Court has jurisdiction so it shouldn't be a huge burden to start a case to seek judgement on enforceability, should it?

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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With respect frettful, my reading is that the response is reasonable. Solicitors can only proceed under a no win no fee if they think there is prospect of success - if they lose their fee is paid by insurance and the insurance won't pay if they think otherwise. I'd say you need a stronger argument to declare enforceability.

 

I would be asking:

Were you ill at the time you took out the loan?

Were you under pressure e.g. repossession action?

Did you have any debts/CCJs at the time of taking out the loan?

 

Did the lender use repossession as first resort?

Did the lender pile on the charges?

 

Hmm that's all I can think of at the moment.

 

 

 

 

County Court has jurisdiction so it shouldn't be a huge burden to start a case to seek judgement on enforceability, should it?

 

Thanks AM for your comments. I was ill at that time as I still am. I have been on medication for physical and mental health problems for the past 10 yrs or so. I did have debts to pay as I had to as I already had a loan with GE Money and had to pay them off in order to receive a loan from Blemian.

 

I was in receipt of benefits and the DWP were paying the interest on mortgage payments, so I was in financial difficulties, there is no doubt about that. I was not being threatened with re-posssession. I did not have any ccj's also at that time.

 

It is up to my solicitors to advise whether I have a strong claim or not as I understand that they are working on a NWNF basis but still they should explore all avenues and advise me correctly and address my issues and concerns so that I am satisfied that they are acting in my best interest, and not try to fob me off with a few points here and there.

 

Bentley challenged Blemain using the UF test even though he was working, why can;t I challenge my agreement when I was not working at all and still was loaned this loan. Irresponsible lending on behalf of Blemain, but they knew that I had equity in property so did not matter to them either way.

 

I will continue to pursue this as far as I can. If you look at my agreement below you will see that it is very difficult to make out what is what, just look at the heading for a start.

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/barristers%20advice/downloads/agreement1.jpg

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That would seem stronger to me... especially if you were on medication. Perhaps approach the same solicitor that Bentley used...?

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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That would seem stronger to me... especially if you were on medication. Perhaps approach the same solicitor that Bentley used...?

 

 

That solicitor has been closed down by the regulators, because his firm was involved with Client Cartel Review, so no go there I' afraid.

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Oh I didn't know that... Or is it the powers that be don't want a successful consumer champion...? No, I must not be paranoid :D

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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Subbing here, thanks to all.

 

The more the merrier :D

 

 

In 2008, the Consumer Credit Act 2006 amended previous legislation and made it possible for consumers to challenge their credit agreements with lenders on the basis of unfairness.

The Office of Fair Trading (OFT) issued guidance in relation to this new legislation which detailed how they expected it to be interpreted in light of other legislation, namely the Enterprise Act.

The guidance does not specify what constitutes an unfair relationship, but rather provides information relating to how the OFT thinks that a court would interpret the unfair relationship test in specified circumstances. This is to allow courts a maximum amount of flexibility to make decisions about unfairness.

 

 

Unfair Relationships

 

If a borrower alleges that a credit agreement is unfair, it is the lender's obligation to disprove this claim. Not all cases are similar or the same as one another, and just because one person’s claim has been found to be unfair does not necessarily mean that another person, who signed exactly the same agreement, will have an equal or even a valid claim against a creditor.

 

 

Unfair Agreements

 

Broadly speaking, a credit agreement is unfair if the conditions of the agreement (or a related agreement) are unfair, or the lender has exercised or enforced its rights under the agreement (or an agreement related thereto, e.g. Payment Protection Insurance) in a way which is unfair to the debtor, or if they have acted or omitted to act in a way that is unfair, whether either before or after the agreement was made with the debtor. This last category is the broadest category and may include advertising, making demands for payment not within the terms of the contract and failing to provide clear information.

 

These types of unfair practices fall into two categories; those that are clauses in the terms and conditions of the agreement and which are, as such, inherently unfair, and the business practices of lenders that are by their nature, and the way in which they treat borrowers, unfair. In some cases, a combination of unfair contract terms and unfair business practices combine to make the overall relationship unfair.

 

Challenging Your Agreement

 

Since the new Act came into force and the OFT issued the guidance, a large number of claims companies have sprung up, all claiming that your credit card, loan or other debt may be ‘wiped off.’ The claims company will take a fee from you, which is usually returned in the event that your loan or credit agreement is not challengeable. The typical procedure is as follows: once the requisite information about your credit agreement has been obtained, either from you or directly from the lender in question, the agreement is sent to a solicitor who considers whether or not anything within your agreement may constitute an unfair relationship.

 

 

Compensation

 

If the solicitor is of the opinion that your agreement is likely to be unfair in this way, they will enter into correspondence with the lender. As a finding of an unfair relationship is unenforceable in the courts, the lender simply withdraws the agreement so that there is no longer any debt to pay. In some circumstances, the lender may be liable to pay the borrower compensation (e.g. if the borrower had been mis-sold payment protection insurance.) Don’t be fooled into thinking that the process is a quick one: it can take between 6-9 months to have the agreement declared unenforceable, and you will have to continue paying your instalments until this time.

 

Thought this may useful too if anyone wants a good read.

 

http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft1107.pdf

Edited by frettful38
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Hi everyone:-)

 

I felt I must make you guys aware that I have a :shock:mental illness :shock:which is rather annoying when you know what you want to say but you cant write it down:cry:. In other words my brain gets easily muddled:confused: with lots of information that is why I end up posting on the wrong boards and putting things sometimes that are totally irrelevent. Just wanted to make you guys aware that I am not a complete LOON!!!:lol: I was once quite intelligent but the worst part is that one day I can be as bright as button:p, and the next, I cant even string a sentance together:confused:. lol!! Just thought I would let you know didn't want you thinking I was being an idiot !!:rolleyes:

okay, thats off my chest now onward and upward gotta keep smiling!! lol:grin:

Thankyou for your understanding and putting up with me cher69 x:-)

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