Missold Loans Compensation Claims
There are many reasons why a person might consider taking out a loan: to buy a house, buy a car, go on holiday, build an extension to their home or even to consolidate existing debts. Whatever the reason, vigilance is always necessary as the number of missold loans compensation claims is on the rise.
If a person took out a credit card or a loan before the 6th of April 2007, the person may have been missold the loan and may be entitled to look at filing missold loans compensation claims. That is because the legislation before that date has been proven to be flawed and unenforceable.
Basically, the consumer credit act (CCA) of 1974 states that lenders must include certain information in a loan, mortgage, hire purchase or credit card agreement and if this information is not included, missold loans compensation claims can result. In effect, the loan is deemed unenforceable and the borrower does not have to pay the balance of the loan.
Revisions to the CCA since 2007 mean that anyone who has taken out a loan before that date may be entitled to contact missold loans compensations claims lawyers to see if the loan is invalid or unenforceable. If so, it is possible that the person is sitting on thousands either in the form of compensation or may not need to make any further payments.
Also, many people who took out loans or credit cards may also have been missold Payment Protection Insurance or PPI. PPI is an insurance product which covers a person who has taken out a loan but defaults on payments if they lose their job, get sick or have an accident.
It is effectively additional security on the loan for the bank and can provide vital coverage to the borrower in the instance that something goes wrong. But many people have also been missold PPI and it is estimated that the number of missold loans compensations claims as a result of missold PPI is around the 2 million mark.
A PPI can be deemed as missold in the following circumstances:
- If the lender added it to the loan agreement without advising the borrower
- If the PPI was not fully explained to the borrower
- If the PPI is not relevant to the type of loan and therefore does not provide adequate coverage.
In this case, the borrower has basically been missold a PPI and missold a loan, which is definitely cause for hiring missold loans compensation claims solicitors.
Basically, anyone who took out a loan before 2007 should check to see if their loan is valid. This is a specialist area so it is necessary to talk to missold loans compensation claims solicitors who have the expertise in this field.
The solicitors will need to understand how these agreements work and be able to identify flaws. Typically these types of agreements are written in jargon and are very detailed, which is why using experienced missold loans compensation claims solicitors is so important.
Before proceeding with missold loans compensation claims solicitors, there are certain things that clients can check themselves. For example,
- Check the credit agreement to see if it is in breach of the Consumer Credit Act and therefore invalid or unenforceable
- Check if it is possible to reclaim any charges plus interest
- Check any excessive charges on your credit agreement were paid
- Check for any hidden commission fees that were paid to brokers or “middle men”
- Check for the possibility of a missold PPI
With these types of cases, it is always possible to work with missold loans compensation claims solicitors who work on a no win no fee basis, so it is important to shop around and find the right solicitors with the right experience offering the best terms. The client should also take their own personal circumstances into consideration.
For many people, a mortgage is the biggest loan that they will ever take out in their lives. However, a recent survey discovered that four out of fifty borrowers were not given adequate information when taking out a mortgage. This is a frightening and very high figure considering the size of the mortgage market.
Missold Loans Compensation Claims and the Media
In 2008, the Financial Services Authority (FSA) announced that the rising number of missold loans compensation claims was a cause for concern, particularly in the area of missold mortgages. They decided to launch an investigation as a result.
At the time, Tony Boorman, the Principal Financial Ombudsman, told Channel 4 news that:
“Certainly we see cases of mis-selling where we frankly find it extremely difficult to believe that a responsible lender, a responsible intermediary, could have in all conscience advised the customer that this was a sensible product, a sensible size of loan for them to take out given what that lender, given what that broker knew about the customer’s circumstances.”
Peter Tutton, Social Policy Officer of Citizens Advice, also commented at the time saying that some of the mortgages given to people were totally unrealistic and it was never going to be possible for those people to repay those mortgages.
Bad financial advice, encouraging people to borrow more than they can afford and misselling loans is very serious and will always result in missold loans compensation claims. In the worst case scenario, a missold loan could result in someone losing their home or suffering severe and prolonged financial burden.
Here are some situations that might qualify a borrower for filing Missold Loans Compensation Claims:
- If a person was sold a mortgage while on benefits
- If the person was not properly assessed to check the mortgage / loan was viable
- If the mortgage runs past the age of retirement
- If the person was advised to switch to another lender when the fees and penalties actually make the transfer more expensive
- If the commission paid by the lender to the broker was not properly explained
- If it was necessary to pay the broker a separate fee that was a percentage of the loan
These are just some of the circumstances that could merit missold loans compensation claims. In all instances, it is best to talk to missold loans compensation claims lawyers to get the best and most up to date advice.