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    • Hi @BankFodder
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      In the second call the mediator came back with an offer of the full amount of the phone and postage £146.93, but not the court costs. I said I was not willing to accept this and the mediator came across as a bit irritated that I would not accept this and said I should be flexible. I insisted that the law was on my side and I was willing to take them to court. The mediator went back to Hermes with what I said.
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Paragon Finance - Help Please

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I hope someone out there can give me some advice but bear with me it's long winded


I took out a £5,000 loan with Universal Credit in 1996, which unfortunately due to circumstances defaulted on after paying the bulk off. I heard nothing until approx two years later when I started receiving letters from Paragon Finance (they had apparantly bought the debt - but I didn't get to the bottom off this until recently). Having had no previous dealings with Paragon I asked them to supply details of the debt so I knew what I was being asked to pay. I heard nothing for a further year, when a bailiff turned up.


Once again I contacted Paragon asking for details, and again heard nothing. Things continued in a similar vein until March this year when out of the blue I received a letter from them informing me that it was for the loan I had with Universal (although they provided no copy of the agreement) and that they had already taken the case to court and obtained a charging order on my property.


I requested a statement and balance (as until this point various figures had been bandied about - going up and down like yo-yo's) and started making payments of £30 a month as a goodwill gesture, however I heard nothing from them until today.


Had a letter from them this morning - written in some form of financial jargoneeze:


"I can confirm that the balance outstanding under the Judgement Order is £4617.24 and the balance outstanding under the contract is £22107.21 to date.


I can confirm that this Company has, in accordance with the provisions of the loan agreement, charged interest on the account since the date of Judgement. The stated provision does not merge with the terms of the Judgement Order.


In the present case the Company has not increased or amended the amount payable under the order rather is seeking from you an additional amount properly payable under contract. If and when we wish to recover this additional amount it will be via seperate proceedings on that contract and not via the current order."


Is this a. as bad as it sounds,

b. legal and

c. is there anything I can do about it?


Thanks for listening to my waffle - any help or advice would be very much appreciated.



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There is a good form on this site requesting a copy of the agreement you signed and some sort of document showing the debt has been transferd to them. The letter is good and has lots of leag quotes on it :)


I have sent this letter to a couple of companies, one replied back saying the debt had been dropped (the obviously couldnt supply the information) and I have not heard anything from the other since :)


By law they have to supply you with this information.

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There is a good form on this site requesting a copy of the agreement you signed and some sort of document showing the debt has been transferd to them. The letter is good and has lots of leag quotes on it :)



I've looked but can't find this - any idea where on the site it is?

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  • 3 weeks later...

Hi fanack.


Just found the problems that you are having with Paragon, and the continued charging of exorbitant interest on customers having financial difficulties is something that I have also endured.


I started a thread a couple of days ago on my battle with them, and have requested a copy of my agreement from them.


To date I have not received anything from them, so I am hoping that I can use their failure to comply with a CCA request as leverage to try and get some form of consideration from them.

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It sounds like there is a CCJ in place for at least part of the debt. They talk about a "judgement order". Do you know if this is correct? Do you have a copy of the judgment?


They are, I think, trying it on if they think they can recover that amount of interest on a debt after it has been subject to a CCJ but we need a lot more background information.

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I've just been doing some google based research on Paragon and came across this which may be of interest:


Dated:- 31 July 2000


issued 11 September 2000


Paragon to amend contract term entitling it to charge contractual interest after judgment

The Paragon Group of Companies plc has agreed to amend a term entitling it to charge interest on debts which are subject to court orders.

This undertaking is given on behalf of the company and all its subsidiaries. It affects those borrowers who have:

  • agreements regulated by the Consumer Credit Act
  • been taken to court for defaulting on their payments
  • and been made subject to an instalment order tailored to their ability to pay.

The term entitles the lender to continue charging interest at the contractual rate while the instalments are being paid. Borrowers who believe that they have cleared the debt then discover that a large sum is still owed.

Paragon gave the undertaking after intervention by the Office of Fair Trading against another lender led to a Court of Appeal decision. The Court ruled the term was unfair in that it enabled the bank to obtain judgment against a borrower ordering him to pay by instalments without the court having the opportunity to reduce or disallow the contractual interest rate. The OFT has the power to apply to the High Court for an injunction to stop the use of such unfair terms.

Paragon has agreed it will not charge additional contractual interest unless:

  • it has informed consumers about their right to ask the Court to reduce or stop this interest
  • the attention of the Court has been drawn to its powers to reduce or stop the interest.

John Bridgeman, Director General of Fair Trading, said today: 'Such contract terms are heavily loaded in favour of the lender to the detriment of the consumer. The courts, when asked to make a judgment to recover debt, take into account the circumstances of the borrower and make an order setting out the level of repayments over a specified time period. The courts have been unaware that these companies have then added interest to the instalments with the effect of adding to the burden of debt. Lenders must realise that they have a responsibility towards borrowers and that penalising them in this way is unacceptable.'



1. Paragon is a mortgage lender. It is also a major personal finance lender. It advanced loans of £95.6 million in the year to 30 September 1999 (both secured and unsecured). Paragon also finances motor dealers.

2. The court case involved First National Bank which was taken to court by John Bridgeman after it refused to change a similar term in its unsecured consumer credit agreements voluntarily.

3. In February, the Court of Appeal held that the term enabled FNB to obtain judgment against a borrower ordering him to pay by instalments and to continue to charge contractual interest usually without the Court or borrower having been made aware of the term and without the Court having been given the opportunity to consider exercising its powers to reduce or disallow contractual interest. The Court said that the bank, with its strong bargaining position as against the weak position of individual consumers had not adequately considered the borrowers' interests. In the view of the Court the term created unfair surprise and did not satisfy the test of good faith. It caused a significant imbalance in the rights and obligations of the parties and operated to the detriment of the consumer who had to pay the interest.

4. The Judges, Lord Justice Peter Gibson, Lord Justice Waller and Lord Justice Buxton unanimously ruled that the term was unfair in these circumstances and asked FNB to amend it to meet the DG's concerns. FNB has undertaken not to enforce the term unless the Court has specifically considered exercising its powers to reduce or disallow the contractual interest payable and the consumer has been informed of his right to ask the Court to exercise these powers. FNB was refused permission to appeal by the Court of Appeal and it has asked the House of Lords for permission which has yet to be decided.

5. Paragon's undertaking matches that made by FNB.

6. The Office took action under the Unfair Terms in Consumer Contracts Regulations which came into force on 1 July 1995. These were superseded on 1 October 1999 by the Unfair Terms in Consumer Contracts Regulations 1999. The regulations implement an EC Directive (EC Directive 93/13) in the UK. They apply to standard contract terms used with customers in contracts made after 1 July 1995. The Regulations say that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair. They also give the Director General of Fair Trading and other Qualifying Bodies powers to stop the use of the standard term by businesses and prevent anyone recommending such terms, if necessary by obtaining a court injunction.










Each of Paragon Mortgages Limited (“PML”), Paragon Personal Finance Limited (“PPF”) and Universal Credit Limited (“UCL”) undertake, subject to seven prior days notice to the contrary, that:-


    1. In any contract regulated by the Consumer Credit Act 1974 (“the Act”), it will amend any term having the object or effect of making contractual interest payable on the amount of any judgment for sums owed by the customer, so as to provide the following additional text to the relevant clause:


          If [name of company] applies for a money judgment in respect of this agreement, the Court may make an order (a “Time Order”) under Section 129 of the Consumer Credit Act 1974 (“the Act”) for the payment of the amount due to [name of company] by such instalments, payable at such times, as the Court thinks reasonable. If the Court makes a Time Order, it may reduce the rate of interest during the period of Time Order under its powers under Section 136 of the Act. [Name of company] will not enforce any claim to contractual interest accruing after the Court has entered a money judgment and made an order for payment by instalments of the amount due under this agreement unless prior to any such order, the attention of the Court has been drawn to its powers under Sections 129 and 136 of the Act and to this clause and the Court has specifically considered whether to exercise these powers.

        This undertaking is suspended until 3 months after the disposal of any appeal by First National Bank PLC to the House of Lords in case no CHANF/99/0974/A3 (the “Disposal”).

      1. With immediate effect, where a contract made after 30 June 1995 is regulated by the Act and contains a term having the object or effect of making interest payable at the contractual rate on the amount of any judgment for sums owed by the customer, PML, PPF or UCL as the case may be, will not enforce such a term in respect of any sums due under a money judgment where the court has ordered the judgment sum to be paid by instalments unless:-


            a). before the claim for the money judgment was issued, it gave written notice to the customer in terms of the draft in the Schedule hereto; and

            b). before the order to pay by instalments was made, the attention of the court has been drawn to its powers under Sections 129 and 136 of the Act and to the term and the court has specifically considered whether to exercise these powers;

          provided that nothing in this undertaking shall prevent PML, PPF or UCL (as the case may be) retaining in a separate interest bearing account until after the Disposal any sum from the proceeds of sale of a property pursuant to a charging order which represents interest after judgment.


          You should note that under the terms of your contract interest at the contract rate will continue to be charged until the balance is fully repaid, whether or not judgment is obtained. This means that if you offer to pay any judgment over time by instalments, the total amount you will eventually have to pay will also include an amount for this ongoing interest.

          In some circumstances, the court will make a “time order” under the Consumer Credit Act 1974 which will allow you to pay what you owe under the contract by such instalments as the court will fix. The court can also reduce the rate of interest over the period of a time order.

          You may wish to apply for a time order. If you need further guidance, you should get help, for example, from a solicitor or a Citizen’s Advice Bureau.

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