Is this loan agreement regualted by the consumer credit act

[RudiJames]

Hi all,

This is a strange one, I am a designer and have never really been involved before in lending or borrowing money, however in 2007 a friend of mine rang me and said a friend that worked for him was about to lose their house and could I lend £11500 to pay off the arrears and that later when the property sold the friend would give me back £19000. My first reaction was to say no as I dont really do loans and I had no idea when the property would be sold so I could have to wait for years. To set the picture she was a friedn of a friend, my friend I had worked with in the past and I was in the process of buying the shop next to him so we sold the pair for redevelopment.

 

Anyway I did do the loan and my lawyer advised that a simple loan agreement would suffice as it was a provate arrangement between individuals. So all happened and I was paid the 19K some 6 months later and forgot about it.

 

Until last year I was sued by the lady I leant money too as she said the agreement was regulated by the Consumer Credit act and I had no right to the gain I got. I think she has legal aid and I have tried to settle even offering to give back £7K but they wont even answer any emails or calls and seem intent on driving up costs.

 

My question is if anyone knows was this agreement subject to the Consumer Credit Act, it seems harsh if it was but that may be life and secondly what is the worse that could be awarded against me, I am now scared that she may be planning on trying to get back not only any money I made on the transaction but also the amount I loaned her and my lawyer or no one else seems to be able to give me clear answers.

 

Sorry for the long post if anyone is still reading thank you.

[alfwithhair]

I don't think anybody can speculate if it is or its not regulated by the act without seeing the agreement

Could you give any more detail with regards to the contents and terms of this agreements?

[RudiJames]

Hi there thank you, actually the agreement says that I would help to sell her house and the £8K would be a sales commission, but i think the defendants lawyers are saying it was really a loan and not a sales arrangement, they are saying it was arms length and therefore covered by the act. I could not say an interest rate as I was getting a fixed amount whenever the house was sold. thank you so much for looking any more questions I will be pleased to answer more

[RudiJames]

By the way at the time I asked my lawyer to give me a valid agreement but he advised that this was a private arrangement and that I should do a simple loan letter, this lists the amount I advanced and what had to be done regarding she would put the house o the market allow viewings maintain her payments with the BS and she also gave me a power of attorney and also signed a contract of sale for protection, but I never used these or enforced them

[cerberusalert]

Moved to the Legal forum.

[The Mould]

By the way at the time I asked my lawyer to give me a valid agreement but he advised that this was a private arrangement and that I should do a simple loan letter, this lists the amount I advanced and what had to be done regarding she would put the house o the market allow viewings maintain her payments with the BS and she also gave me a power of attorney and also signed a contract of sale for protection, but I never used these or enforced them

 

Good evening RudiJames

 

Can you post up the full contract please, minus your personal details of course.

 

You say that you are being sued by this friend of a friend whom you agreed to loan an amount of money to in order that she could pay mortgage arrears owing, which would prevent repossession. Thereafter she would perform her obligations under the contract and when the property was sold, she would repay you the £11,500.00 borrowed plus a further £7,500.00.

 

 

 

What are the claimant's Particulars of Claim?

 

Kind regards

 

The Mould

[Jasper1965]

You say she sued you.

 

I assume this is still ongoing.

 

Can you tell us the particulars of her claim (POC's) please? eg The claimant entered into an agreement with x and x failed to make payment as promised and the claimant seeks......

 

I'm not sure where she's coming from trying to turn this private loan into a regulated agreement the POC's will maybe give us an idea what angle she's after. I'm also struggling to see what her reps are up to as well since claiming a private loan to be an arms-length agreement doesn't make it a regulated agreement per se unless they are trying to intimate that you were financing the property on a commercial basis not the person on a private basis.

 

Nothing under the CCA prevents or limits the creditor making a profit from lending anyway so again I'm puzzled. If the extra money was paid secretly to a third party that would have severe implications but it clearly wasn't.

 

She was in financial distress, she obviously couldn't borrow through normal channels and so she turned in desperation to a friend of a friend and years down the line she's seeking the protection and benefits (if they exist) of a regulated agreement? I feel her credibility will be sorely stretched.

 

Sounds like a heck of a puzzle.

[RudiJames]

Good evening RudiJames

 

Can you post up the full contract please, minus your personal details of course.

 

You say that you are being sued by this friend of a friend whom you agreed to loan an amount of money to in order that she could pay mortgage arrears owing, which would prevent repossession. Thereafter she would perform her obligations under the contract and when the property was sold, she would repay you the £11,500.00 borrowed plus a further £7,500.00.

 

 

 

What are the claimant's Particulars of Claim?

 

Kind regards

 

The Mould

 

Hi there, thank you for the reply. I would upload the agreement but I dont have it basically it was in the form of a loan letter and it listed the terms of our arrangement and was signed and witnessed, from memory those terms were that I would provide the £11,500 and then she would repay this on sale and that she would put the property on the market allow viewings and on sale pay a sales commission to me of the £7500. This was all at her suggestion not mine. The particulars of claim from the plaintiffs claimed that the agreement was covered by the consumer credit act and it was unfair for a number of reasons and they asked for all the money even the amount I loaned back. At the time my lawyer said this was a private arrangement, I am sorry for not haveing exact papers, but I can answer any questions to help clarify thank you

[RudiJames]

I discovered that their case rests on this being arms length as I did not know the friend when we made the agreement, they say the CCA covers this kind of transaction. I have agreed to pay £7K back because this is so stressful and they are raising really high costs for me to defend and I am not so well off, but even that it is like they smell blood and dont reply to my offer, but I guess aim to raise costs even more in the pre-trial review next week.

[Jasper1965]

The particulars of claim from the plaintiffs claimed that the agreement was covered by the consumer credit act and it was unfair for a number of reasons and they asked for all the money even the amount I loaned back.

 

The devil is in the detail RJ. Ideally we need to know word perfect what she is claiming, why she feels the agreement was unfair, her argument that it was a regulated agreement and under what legislation she's seeking these monies. Does your lawyer have the original court paperwork, can you get a copy? is she claiming an unfair relationship under sec 140A CCA 1974 or just saying "it's not fair"?

[RudiJames]

Sorry to be clear I made a part 36 offer of £7K to try to end this, this is what they offered me at the start of teh case, but they will not tell me if the offer is acceptable or not, they always say they are out at court or unavailable, I am getting quite ill with worry and even though I feel the CCA was never intended to cover things like this but unscrupulous lenders actually I should just give up and pay and not take all the stress, but even with that they wont take a call so I may be forced to fight this I cant make them settle

[RudiJames]

Thank you, they have said that their client had a brain haemorrage 15 years ago and was vulnerable (something I was never told) and they say that her position ie having bailiffs at the door made her vulnerable. they also imply I am in teh business of lending money, though I never have, but as I had a commercial relationship with my friedn they try to say that this is business, all that said they seem to be implying that the CCA applies to loans between individuals. They say the CCA allows them protections including against interest and charges. I will try to get the claim and advise you more, is there anything useful in these comments?

[RudiJames]

Hi yes they do refer to the CCA 1974

[Jasper1965]

they say the CCA covers this kind of transaction. .

 

Ignore what they say and go with what your own legal advisor tells you because imo and I think others will agree this claim is a load of rubbish and they will know it.

 

I have agreed to pay £7K back because this is so stressful and they are raising really high costs for me to defend and I am not so well off, but even that it is like they smell blood and dont reply to my offer, but I guess aim to raise costs even more in the pre-trial review next week.

 

I would formally withdraw the offer immediately in writing, unless made without prejudice this can be construed as admitting the claim.

 

because this is so stressful and they are raising really high costs for me to defend and I am not so well off, but even that it is like they smell blood and dont reply to my offer, but I guess aim to raise costs even more in the pre-trial review next week.

 

Standard solicitor practice ramp up the costs and hope to scare you into submission. If they had a strong case at this value they could get the full value of the claim and the costs through the court.

 

Was the loan made through a business account or a private account?

[Jasper1965]

Thank you, they have said that their client had a brain haemorrage 15 years ago and was vulnerable (something I was never told) and they say that her position ie having bailiffs at the door made her vulnerable. they also imply I am in teh business of lending money, though I never have, but as I had a commercial relationship with my friedn they try to say that this is business, all that said they seem to be implying that the CCA applies to loans between individuals. They say the CCA allows them protections including against interest and charges. I will try to get the claim and advise you more, is there anything useful in these comments?

 

 

Yes the fog is subsiding and I can see clearly now I see a C an H an A then N,C,E,R,S Chancers!!!! it says Chancers!!!

 

Are you prepared to name and shame the solicitors involved? It might help as if it's a known practice there are experts around the site who tend to know their modii operandi

[RudiJames]

Hi Jasper sorry I just saw this thread,

 

Yes it is still ongoing. I will get the POCs and post the wording asap,

 

It may be complicated as I did say sales commission in the loan agreement, but I was always a private individual trying to do what was asked and be legally covered.

 

I think the extent of the profit was seen as too high, they claim that I was entitled say £1K

 

Nothing was underhand on my side, but I think the lady is devious in teh claim she said I leant her £3K and took £19K back, when I have the slip for the £11.5K I paid into her C and G account. I had to call teh C and G on her behalf at the time and jump through many hoops to stop her losing her home. It is a eck of a puzzle and even if I wa right I was happy to pay her back at least most of it, but now her lawyers are refusing any contact, I think she may be legally aided. Thank you so much for your help

[RudiJames]

Yes it is xxxxxx in Ringwood, xxxxxxxxxx there

Edited June 18, 2011 by RudiJames
removed names

[RudiJames]

I made the loan from my private account though I had to walk into her branch with cash in hand as the C and G would not wait for a transfer to stop the bailiffs

[Jasper1965]

Thank you, they have said that their client had a brain haemorrage 15 years ago and was vulnerable (something I was never told) and they say that her position ie having bailiffs at the door made her vulnerable. they also imply I am in teh business of lending money, though I never have, but as I had a commercial relationship with my friedn they try to say that this is business, all that said they seem to be implying that the CCA applies to loans between individuals. They say the CCA allows them protections including against interest and charges. I will try to get the claim and advise you more, is there anything useful in these comments?

 

And now seriously.

 

1) Did you send the Bailiffs to her door I thought this must have happened before you even met her?

2) the haemorrage is at all times irrelevant in fact it could be argued that she deliberately witheld this from you and you might well not have advanced the money had you known she was mentally or physically unwell.

3) Are you in the business of lending money? If yes can she prove it if no she has to prove you are you don't have to prove you're not but obviously it would help if you could.

4) Your commercial relationship with your friend is nothing to do with this.

5) the CCA does provide limited protection but they will have had to plead exactly what benefit and protection they seek.

 

"I think the extent of the profit was seen as too high, they claim that I was entitled say £1K"

 

6) Some payday loan companies charge 2500% APR + on regulated loans.

 

7) It might have cost her £7000 but the cost of not getting that money from you would have likely been counted in tens of £1,000's if her house had been repossesed. You need to do your own sums.

Edited June 18, 2011 by Jasper1965

[Jasper1965]

I think the lady is devious in teh claim she said I leant her £3K and took £19K back, when I have the slip for the £11.5K I paid into her C and G account. I had to call teh C and G on her behalf at the time and jump through many hoops to stop her losing her home.

 

If she has entered into her claim that you lent her £3,000 and took £19,000 back then it's game over for her. this is a criminal offence and contempt of court.

If you can prove that you withdrew the money from your personal account and paid it into her account minutes later you're home and dry. Don't forget the data protection act, she must have had to give C & G permission to speak with you on her behalf and this will be on their records.

[RudiJames]

1) Hi no the bailiffs were sent by the C and G a week after she asked me to do this, this was why I had to rush and agree for her

2) thank you for that information, you are of course right

3) I do not lend money to anyone

4) thank god for that, they make quite a thing of that

5) thank you again I will find the exact terms of the POC

6) thank you again

 

I really am grateful for your kind support, I think this is beyond the lawyer I have's expertise and I have pretty much run out of money to fight, they have said their estimate of costs to the end of the case is £25,000 so I guess fear stepped in. All I do know is all I say is the truth and I would have said no to this claim if I had been offered less than £5k as it seemed so risky.

 

I have my first child due in November and I tried to end this matter so I could enjoy that, you have helped me feel a lot better, thank you again. I will post POCs asap, any other info you need from me please let me know.

 

One complication I did not tell you as this is all so complicated is that when she sold the property she got £75000 net proceeds of sale and she asked my friend to put it in his bank as she did not want any other people to make a claim on it, but my friend then I think though he denies it did not give her all the money back, so the claim against me is part fo a bigger claim against him. He was a firend but a bad penny kind of friend that I would help but end up the loser for helping and I do think it is possible that he kept some money he too had financial problems.

[RudiJames]

hi yes you are very smart, I had to get a letter from her authorising me to speak with them. I wondered yesterday about whether I could ask her in disclosure to disclose all of the records with C and G becuase of course they will not give them to me.

[RudiJames]

Sorry if I am answering twice, but thread has disappeared, I did get a letter from her letting me talk to C and G. I also think I want to get her to disclose her C and G statements now. They would not let me have them only her, so I am hoping she can be made to produce them.

[RudiJames]

By the way I found out about what happened with my friend only when she sued me as she added me as a second defendant to that claim, but I think her action against him gave them a way to sue me. I have offered to help them locate my friend, but they do not want seem to want to, it is a little strange, I think they know he also does not have money and have a reason to not want to know his whereabouts.

[Jasper1965]

What concerns me most here RJ is that despite the claim being fraudulent and vexatious they are still proceeding and ciontinuing to run up costs. Now either the claimants are so desperate for work they'll take anything or the claimant is lying to their own solicitors or your defence as pleaded is so weak they fancy a gamble.

Who wrote your defence and are you still happy with it now we've identified a few areas of concern in the claim?

 

Do you think the claimant has fed their own solicitors a story because claiming an extortionate credit bargain as a primary cause of action when the figures on which the claim is based are provably pure fiction is about as problematic for a claimant as it can get at county court level and the solicitors are under obligation to their profession too.

Edited June 18, 2011 by MARTIN3030