Your Rights Under Consumer Credit Law

Up to 70 percent credit card loans taken before April 2007 are unenforceable.

Loopholes in credit agreements has meant the end of a debt of £120,000 for one UK couple after thei mortgage advice business collapsed and they found themselves unable to afford their monthly payments.

How One Couple Reduced Debt Owing £120,000

With debts spread over 13 credit cards, four loans, car finance and an overdraft, the couple decided to study the Consumer Credit Act and clarify their rights. The Consumer Credit Act defines rules that loan and finance companies [including credit card companies] have to follow when they advertise or sell credit.

What they found astounded them. They found discrepancies between what the companies advertised and their actual practices. These were effectively loopholes which prevented the loan companies from pursuing them further for payment.

So they contacted lenders claiming they had found mistakes in their credit agreements. The response they got after a few months was that they were prepared to write the balance owing off.

The loopholes included whether :

The correct annual percentage rate (APR) was used
The forms had actually been signed
The lenders had kept a copy of the paperwork

Their 13 credit cards and loans totalling £37,000, were written off.

The rules relating to credit agreements are "extremely complex", so any slip made by a loan company entitles the consumer to refuse to pay unless the court gives leave to enforce the agreement.

So the choice is yours….

The couple failed to convince the High Court of their claims to avoid repaying their other debts. Despite the judgement, a legal technicality meant the lenders could not claim the money back while the court proceedings were going on – effectively freezing most of their remaining debts. This gave the couple time to gain new employement, build their savings to pay off their debts [and legal bills.

Next: How Finance Companies Recover Debt

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