Good News for Borrowers- Lender accepts the unenforceability of Regulated Consumer Credit Agreements

In the matter of Madison CF UK (T/A 118118 Money) v Various [2018] before Mr Justice Hildyard the Lender accepted that it had failed to provide Pre-Contract Information (the SECCI) to customers in accordance with section 55(1) of the Consumer Credit Act (whereby the agreements are only enforceable with a court order).

In addition, the Lender accepted that it had not sent compliant statements to the customers under section 77A of the Consumer Credit Act, and had failed to send Notices of Sums in Arrears to customers as required by section 86B of the Consumer Credit Act.

The Lender accepted that it had erroneously entered judgments against the customers as a result of these breaches of the Consumer Credit Act and/or defects in complying with the same and as such was not entitled to enforce these agreements against the customers. Accordingly, the Lender , of its own volition, applied to set these judgments aside.

It is clear that many customers may be in a position where Lenders have failed to provide the necessary information required by the Consumer Credit Act including failing to provide Pre-Contract Information and compliant statements, not explaining the rationale for interest charges and fees levied and not providing Notices of Sums in Arrears. Indeed, some Lenders may be unable to produce a copy of the credit agreements customers entered into. Such failures may prevent Lenders from enforcing their rights and possibly give rise to an unfair relationship under section 140A Consumer Credit Act. When an unfair relationship has been determined, the powers of the Court under s.140B of the Act to remedy the position are extensive: this may include requiring the lender to repay any sum paid by the borrower; reducing or discharging any sum payable by the borrower and/or altering the terms of the agreement.

JCLM has expertise in assessing where Lenders may have gone wrong in dealing with the requirements of the Consumer Credit Act.

Think your credit agreement may be unenforceable?

Suffered as a result of an unfairly charged interest rate or fee?

Please contact JCLM to see how we can help.

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