The Office of Fair Trading (OFT) in June 2006 published guidance notes on how implementation of the Consumer Credit Act 2006 could be used to protect consumers. These implementations came into effect in July 2007 to focus on the unfair relationships between borrowers and lenders.
This is the basis for the new act which updates the Consumer Credit Act 1974. Its aims are to create a fairer, clearer and more competitive consumer credit market and to improve protection for customers.
The act enables consumers to challenge credit agreements on the grounds that the relationship between the parties is unfair.
Q: Can I claim against any Credit Agreement?
A: Yes, but the agreement must meet the following criteria to qualify:-
1. The agreement must have been in place before 6th April 2007; and
2. The original balance must have been less than £25,000 with a current balance above £1,000; and
3. The agreement must have been regulated by The Consumer Credit Act 1974.
In principle, should you meet the above criteria, then you will be able to claim.
Additionally, we would recommend that for Personal Loan or Car Finance contracts that there is a minimum term left of 9 months or greater to make the claim financially viable.
Q: Can I make the claim myself?
A: It is possible to make a claim against your Creditor in relation to Unfair Credit Agreements. However, it is vital you are armed with the correct information and knowledge.
Recently, a consumer in the midlands ended up having to pay thousands of pounds in legal costs when they lost a "weak" claim.
All our Solicitors use what is known as "After the Event" Insurance to make sure you would never have to pay legal costs in the event of a failed claim.
Q: Will I have to discuss this with the Creditor?
A: No, once you have authorised ourselves to deal with your complaint on your behalf, the creditors cannot hassle you in relation to the claim, simply remind them that Creditbuster and Ratio Money are dealing with this issue.
Q: Do you have a panel of experienced Solicitors if required?
A: Yes, Creditbuster have an experienced panel of Solicitors throughout the UK who are specialist Consumer Litigators. Creditbuster also have close relationships with "Barrister" chambers who are specialists in Consumer Credit Claims. Once your "Audit" is concluded and you have a claim, these Solicitors can then act for you and you get to keep 100% of any settlement.
Q: What is included in the Audit Fee?
A:Your fee of only £295 covers all aspects of our work with regards to your claim. On settlement of your claim. you will keep 100% of all compensation. Our Solicitors manually "Audit" your Credit Agreements and produce a report covering all problems and areas of concern for the basis of a claim Your Audit Fee will be fully refunded in the event your agreement is found to be compliant.
Q: Do you offer a refund if I do not have a Claim?
A: Yes, in the event your "Audit" does not result in a claim being placed with our Solicitor panel we will refund all your Audit Fee.
Q: Will the lender try to take me to Court?
A: No, they will not because it is the lender who hasn’t complied with the law not you, you are only exercising your consumer rights. Our solicitors will deal with the lenders directly. if your lender tries to contact you it is not necessary to engage in conversation with them, merely direct them to the solicitors. If the lender tries to negotiate with you about a direct settlement, you must refuse such an offer and inform your appointed solicitors of the action immediately.
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Q: If I claim how will this affect my credit rating?
A: If your agreement is written off, the information on your credit report will appear the same as if you had paid the amount in full. Your lender and Credit Reference Agencies are not allowed to enter any negative information on your credit report.
Q: Will this affect any loan or credit card applications I make in the future?
A: No, because your credit rating will still be the same as it was before. If you apply to the same lender again there is a possibility they may not want you as a client though.
Q: Can I stop making repayments once your solicitors have taken on my case?
A: If you want to keep your credit rating the same as it was before you commenced the claim you must continue to make the repayments until you receive written confirmation telling you to stop making the repayments from our solicitors.
Q: Can I continue to use my Credit Card or Store Card once I have submitted a claim?
A: In the event of a claim on a credit or store card it is recommended that you:-
Do not make any further purchases using the card
Do not increase the balance on the card or arrange balance transfers onto the card
Do not allow further arrears to be incurred if possible
Should you not follow these guidelines you may jeopardise your claim.
Q: I don’t have my paperwork, will I still be able to claim?
A: Again, it would speed up the process if you have your original credit agreement. One of the requirements of the Consumer Credit Act means that your agreement could be unenforceable if the lender is unable to provide evidence that all the terms were provided and that the original document was signed by the debtor. Should you be unable to find the agreement it is no problem as we will request it from the lender directly. The lender has a duty to provide the original signed agreement.
Q: How long will this process take?
A: We would expect to have your ‘audit’ report back within 4 weeks. At that point we will know whether you have a claim. Should you have a claim, then we currently expect the process to take between 6 and 9 months to reach a satisfactory conclusion, as it involves a complicated legal process. In 2009 and 2010 we are expecting this legal process to speed up as we believe many lenders will wish to settle ‘Out of Court’ to avoid legal fees.
Q: What percentage of agreements could be flawed?
A: We discussed this question with our audit team in April 2009. The response was that from all audits conducted on agreements submitted, a whopping 78% of all agreements have not complied with the terms of the Consumer Credit Act 1974. Our Legal Team have been appointed to represent these clients on a No-Win, No-Fee basis.
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