Are Unenforceable loans/credit cards a write off?

The Chester County Court has issued a stay of proceedings in ALL claims relating to unenforceability pending test cases in the London County Court. This means that all claims in the UK for credit cards and loans to ne written off could soon technically be stayed pending these ‘test cases’ and beyond albeit it is up to each Court to make their own decision. One thing is certain, every barrister will be well briefed to use this as a precedent stay claims. Is this the beginning of the end for these cases? If you already work with a claims company and they suggest that this is not a big deal, please insist on speaking to one of their acting solicitors.

This is big news because many mortgage and loan intermediaries have been wooed by claims companies charging high upfront fees (between £195 and £495) per write off. Consumers were told it was money well spent because the credit card would be written off anyway. Brokers were promised high upfront fees per case referred (£100-£150), and were promised that their risk was nil. You can see why in these trying times many jumped on board.

If you are a regular reader of this column you will know that I have been warning week after week to be careful and to be wary of any ‘free lunches’ on offer. If something sounds too good to be true it often is. Most people’s gut response to being told about ‘write-off’s, is that “it can’t be right that someone spends some else’s money a widescreen TV and doesn’t pay for it because of a technical reason”. The Courts will decide and they will do what is just. No one knows how long it will take to get some clarity from the Courts but for the time being the party would appear to be over.

What does this mean to me?

1. If you have referred clients to one of these upfront fee companies – stop referring them as the client will look to you (morally if not legally) to take care of them if their claim fails, or is delayed or if the claims company ceases trading. If you haven’t done ‘write-off’s’, then now is not a time to start thinking about it. Please focus on PPI, credit cards and mortgage exit admin fees. Claims Financial do all of the above.

2. Stay away from any/all companies charging upfront fees. Only work with a reputable company that works No Win, No Fee. This means they are putting their money where their mouth is. If they don’t deliver their service is free and you are never at risk of having client’s you referred knocking on your door.

3. Focus on Mis-sold Payment Protection Insurance - every loan/credit agreement has a possible PPI claim. If you have been referring unenforceable loans, go back through all your documents/clients and find out whether they have PPI. If they have they can claim that back immediately without any more upfront fees. You will get upwards of £100 per case you refer albeit uncapped commission. There may yet be a happy ending for these clients.

Once again, we recommend Claims Financial, the largest ethical claims management company whose business is built on reputation not ‘free lunches’...

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