Loan Court Case Could Open Flood Gates For Borrowers
In a recent test case in the County Court, a senior Judge has ruled that a consumer credit agreement on a loan did not fully comply with the consumer credit act and therefore the loan agreement was unenforceable by the lender.
Judge Derek Halbert is now looking into bringing certain test cases to the high court in order to clarify some of the legislation which applies to loan agreements, which would allow borrowers to have a better understanding of their rights when it comes to their loan repayments.
Claims management company, Ratio Money have welcomed the move, along with many other similar companies, who claim that additional clarification of the consumer credit act law in certain areas would be of great benefit to those in dispute over their loan agreements.
Matthew Porteus, Managing Director of Ratio Money commented on the ruling, he said “If unenforceable credit agreements go to the high court as test cases, the issue will be out in the open and the sneaky tricks that banks have employed for years will be laid before the courts. The case decided by Judge Halbert was an unequivocal victory for the consumer because the Judge ruled that the loan couldn’t be enforced on any level.”
Of course, if this test case does get as far as the high court and is successful, a large number of borrowers are likely to start looking at their own loan agreements in detail and the case could effectively open the flood gates for consumers who are challenging whether their loan from their bank or building society is legal or not. This news could spell disaster for many banks as, if the case is successful, they could be unable to enforce customers loan agreements, effectively costing them billions of pounds, which they just don’t have at the moment.
