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Financial Irregularities and Credit Mis-selling

Client L came to our solicitors firm from a Claims Management Company, because she believed her loan may be unenforceable. The Lender tried to stall our investigations by refusing to accept a photocopy of the client’s Form of Authority – which is something which has not been demanded on any other file I have worked on regarding this Lender. There is also no legal obligation to provide the original, so we refused.

A loan Agreement must comply with all of the relevant ‘prescribed terms’ laid down in the 1983 regulations. A breach of any one of these terms makes the loan irretrievably unenforceable. Upon finally obtaining a copy of the agreement, we had it assessed and found several breaches.

One of those breaches concerned the PPI; which was a shock to the client, as she was not even aware the loan had any PPI! This is a reasonable basis for PPI mis-selling, and the Lender has not provided any proof that they made any efforts to ensure that the client needed any PPI, and if so that the specific one purchased met the client’s needs.

So we will continue to build a case on the basis of the PPI being mis-sold, as in proving that, the loan itself will be found to be irretrievably unenforceable, because it was included in the ‘Amount of credit’ stated on the agreement, which is a breach of one of the prescribed terms.

Client B came to our firm hoping we may be able to write off his loan. Upon conducting extensive research, we discovered that the client had several loans all taken out with the same Lender, two of which were taken out within the same year. Upon receiving copies of the agreements, it was noted that each one had a PPI policy. This provides sold grounds for the PPI having been mis-sold, as the policy has obviously not been explained to the client; if it had been, the client would have been aware he already had such a policy in place due to the original loan! This is underlined by the fact that all of the loans were with the same Lender, so the Lender themselves should have been aware that the client already had such a policy.

With supporting case law from the Financial Ombudsman (Case 71/02), we have further grounds to take this case further with regards the PPI.

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