Kensington Charges

[supersleuth]

Hi Woodwa5

 

Re your 18K ERC. I think your instinct is correct. I don't think they can charge you an ERC when they repossessed you. The FSA have guidelines on ERC charges and 18K is excessive even if they could get away with charging an ERC.

 

Way forward: first starting point may be to check the ERC rules under the FSA. On the FSA website you will find the MCOB rules (Mortgage Conduct of Business). Check out what the rules are regarding ERCs. If, as I believe, you have been illegally overcharged an ERC, then you can claim credit on your account for the overcharged ERC and don't forget to charge them 3 years compound interest on the overcharge.

 

second is to check your actual contractual terms to establish exactly what the ERC should have been (but see also below for comment on the UCTA).

 

third is to check what the actual court order states. Exactly what monetary judgment did they get against you? e.g., Are they charging you more than the monetary judgment? Strictly speaking, you should only have to satisfy the monetary judgment. If you've paid enough to satisfy the monetary judgement then on what basis are they charging you?

 

What interest rate are they charging you etc. Is it a higher rate than they charge other borrowers. If so, that is against the FSA rules.

 

Also, contractually and legally, they can only charge you reasonable fees when they exercise their power of sale. Thus, get a copy of the statement of fees from when the property was sold and see how much and what exactly all the fees are. Perhaps you need to challenge some of the fees if they were unreasonable.

 

Also, check out some of the other threads on this site where people have recovered ERCs. That will give you an idea of how to go about claiming back your ERC overcharges (and any other overcharges that they may be dumpiing on your account).

 

Finally, consider the UCTA (Unfair Contractual Terms Acts). There are laws that state that many contractual provisions are unenforceable against consumers because they are oppressive and unfair. Such terms are legally unenforceable. Many of the mortgage contract terms fall under these laws (e.g. that's why the FSA have rules prohibiting excessive ERCs). You can find these laws on a web-site called British and Irish Legal Information Institute , also check out opsi website (office public sector information) which has access to legislation and also google the "uk statute law database" which is another source of uk legislation.

 

General advice is: find out exactly what you are legally obliged to do and do only what you are legally obliged to do and no more. My instinct is that you are being well and truly shafted - which is normal for Kensington - so arm yourself with the information first and make them justify exactly what they demand from you. That is, justify where in the contract they can charge you what they demand and justify legally why they can charge you.

 

Finally, if it turns out that you've paid enough to satisfy the monetary judgement, you could consider going to court for a declaration that the judgment is satisfied - in which case, they will have to take a hike for any further money they demand from you or, they'll have to sue for another judgment - which will be very very tough for them to get because they've already repossessed you and its unlikely that they'll be able to give a full account and justify why they're still charging.

 

Hope this gives you some pointers for where to start.

 

Good luck and remember, all the time you just pay without questioning the charges, they will continue to abuse your account.

[supersleuth]

Hi Janus,

 

No doubt you're right, but that's all the more reason why these lenders (in my view extortionists) should justify at law and under the contract, how they have a right to demand extreme amounts of cash off ex-borrowers. The acccount should be determined with an exact figure at the point-of-sale, such that both the borrower and lender know exactly where the account stands and the basis on which the account can be cleared.

 

Moreover, the lender has a legal obligation to account to the borrower for how they have allocated the sale proceeds. At law, (as I understand) the proceeds of sale must first go to pay down the principal amount borrowed. It seems that Woodwa5 had enough money from the proceeds to pay the principal, and the alleged 28K shortfall is probably made up of the £18K ERC plus fees and charges. Thus, if so, Woodwa5's alleged 28K is not the principal amount, but 28K's worth of charges. If that is the case, then on the basis that the ERC is not (at law) payable, then Woodwa5 is probably in the clear now. If borrowers don't establish the exact account after the sale then it leaves the account open-ended for the lender to make-it-up as they go along and open endedly keep demanding cash.

 

At the moment, Woodwa5 has ended up with Kensington saying that he/she (allegedly) owes an extra £300 more, even though he/she has paid them an additional £12K over the last 3 years. My instinct is that when Woodwa5 gets to the bottom of his/heraccount, there will have been some serious abuse with the charging and, if that is the case, then it may turn out that Kensington owe Woodwa5 money!

 

Go to it Woodwa5 don't be easy pickings for them!

Edited January 2, 2009 by supersleuth
spelling correction

[supersleuth]

Hi Sillygirl,

 

Thanks for your post. I agree that whilst any help from the government and/or the FSA or FOS is always gratefully received, I don't put that much faith in waiting for them to get their finger out and do something. Everything that they've done so far seems to me to be no more than treating a terminal patient with a band-aid. Whilst waiting for the govt/FSA/FOS, that doesn't usually help people who need help now. We've got to enforce our rights e.g. consumer protections and the rule of law, which already exist. Alot of what the lenders are getting away with is unlawful (i.e. non-contractual demands and unenforceable contractual terms), but as we don't know what the law is, we don't question enough of what is going on.

 

Thus, my strategy is to get them to state exactly which contractual obligation they are asserting and then take it from there. If the contractual obligation they are asserting gives them too much discretion (to make it up as they go along), then it is likely that the contractual provision will fall foul of the unfair contract terms. Us borrowers have got to create the case precedents and we've got to enforce our rights. Hard work, I know, but it's worth it.

[supersleuth]

Hi Woodwa5

 

One final point: Do everything in writing - no phone calls. You need the paper trail in order to keep your position strong.

[supersleuth]

Hi Janus,

 

There are rules of law (although the borrowers are not notified of the law or the rules). The rules (which are law) can be found in the Civil Procedure Rules book (often referred to as the White Book), a copy of which can be found in the reference section of the local library, or on line at Civil Procedure Rules Homepage Also check out the corresponding Practice Directions which give commentary on, and augment, the CRP rules. The book itself (from the library) contains more detail than the web-site version plus the commentary in the book references many cases that may be useful.

 

The CPR rules that goven repossession actions is at Part 55 of the Civil Procedure Rules. It's worth a read. It details all the information that MUST be stated in the claim form. For example, see CPR 55.4.4 which states that (amongst other things), the claim form must state "details of all other payments to be made and claimed" (see CPR 55.4.4).

 

Therefore, if there's no monetary judgment, it begs the question on what basis are lenders charging people who've been repossessed and the lender has already exercised its power of sale? If there's no monetary judgment against a borrower that has been repossessed, then the lender is not charging a borrower pusuant to a court order. There must be some other legal basis on which they are demanding cash. Plus, if they have not stated in the claim form all the other payments that are to be "made and claimed", then one could argue that they have forfeited any right to make any more "claims" against the borrower.

 

This is because, under a rule called the rule in Henderrson, (which comes from a case called Henderson v Henderson which is common-law): it is a rule that essentially holds that a Claimant must bring all its claims against the party sued (in this case the borrower) so that the whole claim is dealt with at in the one action. It is deemed to be an "abuse of process" to bring repeated claims against a person on an issue that arises out of the same facts and circumstances. Consequently, where lender tries to start another action against a borrower who has already been repossessed, the borrower could argue that the second litigation is an abuse of process and accordingly, the second action could be "struck out" on that ground.

 

Just had an idea! this rule could be used in any bankruptcy proceedings that a lender might bring against a repossessed borrower and as such strictly speaking, the rule would defeat any bankruptcy proceedings that a lender might bring.

 

Got to say that I'm not a solicitor, but have done alot of reading on the law around this subject.

 

Good luck

Edited January 2, 2009 by supersleuth
typo

[supersleuth]

Hi Woowa5

 

It may also be worth taking it up with the Office of Fair Trading too. This is because, the FSA may tell you that they only take case of "FSA regulated mortgages". In general all residential mortgages that are taken out after 31 October 2004 are FSA regulated mortgages, and mortgages prior to that date were regulated through the OFT.

 

In principle, the FSA should take up your complaint as they regulate the administration of mortgages anyway and on that ground alone the FSA should take up and assit you with your complaint.

 

The OFT still issue the credit licence to lenders, so a complaint to the OFT will alert the OFT that they should think about whether or not Kensignton should have their licence revoked. Point is, no harm in giving it to Kensignton on both fronts.

 

Oh BTW Janus - great supersluthing work!!!

 

Good luck

[supersleuth]

Hi

 

FSA REGULATED MORTAGES.

 

An FSA Regulated Morgage is a mortgage that was entered into on or after 31 October 2004.

 

Therefore, if you entered into the mortgage before 31 Oct 2004, it is NOT an FSA regulated mortgage and

 

if you entered into the mortgage on or after 31 Oct 2004, then it IS an FSA regulated mortgage. In which case, you can use the MCOB rules that are quoted earlier in this thread and the case law cited in the earlier posts on this thread.

 

If the mortgage was entered into before the 31 Oct 2004, then you can use the case law cited in the earlier posts on this thread.

 

It is normal for lawyers to use the costs tactic to scare people off from asserting their rights. Most of the ERC's are unlawful and consequently, the lender's lawyers can only use the bully tactics of scaring you off with threatening costs. In my view, if that's their only counter argument then it shows the lender's know they have a weak case.

 

Nonetheless, everyone has to make their own choices based on the facts before them.

 

Good luck

Supersleuth