Financial Agreement Claims – Help for Families During the Credit Crunch

Are you feeling the pinch during the credit crunch? Help may be at hand in the form of a new finance claim. This new and fast growing financial claims allows customers to audit any finance agreement taken out since April 2007 to assess whether it has issues which could make it unenforceable. All agreement must follow the rules laid down in the 1974 Consumer Credit Act. Many agreements fail to do this. This means you may be able to wipe out your credit card and loan balances. It doesn’t matter if you are in arrears or following a debt management plan or IVA. You can still claim.

The types of agreements which are potentially unenforceable are;-

• credit card agreements
• store card agreements
• car finance agreements
• higher purchase agreements
• unsecured loans
• consolidation loans

You need to find a reputable financial claims management company to act on your behalf. How do you find one from the ever increasing number? And what do you look for?

Up front fees

This is a sore point for some people who wonder why ‘upfront fees’ are charged at all. The vast majority of financial claims managers charge fees in order to carry out a full and detailed audit. These range from around £195 to £495. Basically this is to look at your agreement in detail and assess it for breaches. There is a great deal of work involved. The process takes up to a year at the moment. The rational behind this is that the companies need some form of liquidity as every business does. The fees are refunded if your agreement is found not to be unenforceable. Some companies take a small administration fee.

BUT NOW YOU CAN CLAIM FREE! YES NO FEES AT ALL! Call 0845 475 5435

Auditing – Don’t be mislead

Your agreement must be obtained from your lender before you have a definitive answer as to whether you have an unenforceable contract or not and this will cost you £10 usually. Some companies offer this free and some request £1.00 which is the minimum fee stipulated under the data protection act. It is only after a full audit that you will know if you have a claim or not. Some companies mislead clients by saying they offer a free audit when in reality they ask the same preliminary telephone questions that all companies ask to establish if it is worth considering a full audit or not. For example was the agreement taken out prior to April 2007? What is the balance? Different companies claim for different balance amounts. Who is the lender? Some have more of a reputation for writing unenforceable agreements than others. This is not a full audit. As far as I know there is no company out there yet which offers a solicitors audit – free.

Successful Claims

The majority of companies have been in business for over a year now. Some will be ‘introducers’ for other main companies. They should be able to tell you how many successful claims they have achieved and the length of time it took to achieve the results.

Back end fees

Some companies charge fees at the completion stage of your claim. Be sure to ask if this is the case for you. Some charge 30% while some charge a fix amount of £1000. Most companies don’t charge any fees.

Other fee structures

I have come across some peculiar fee structure whereby some companies offer to handle your claim for you paying them six months credit card repayments. Others offer to take over your debt for you and leave you debt free in six weeks. I would not take these seriously. There are plenty of straightforward ways to clear your cards for a reasonable fee, no misleading promises of a free audit and certainly no back end fees.

Time scales

The process is a long one relying on the co-operation of your lender which of course is not likely to be forthcoming. The legal to and fro-ing will take up to a year. There is no way to avoid this so claims of speedy conclusions, at the moment, are false. The lenders use all sorts of tactics to delay matter for example refusing to send the copy of the agreement to your claims manager but only dealing with you and completely ignoring the requests made by your solicitor.

Be patient, persist and it will pay off in the end.

Mortgages and secured loans can also audit.

Your claims management company and ‘audit’ any mortgage offer, current or redeemed going back 12 years.

Your solicitors will look extensively at all the different aspects of the agreement

• Mortgage Indemnity Guarantees
• Unfair early redemption penalties
• Sub Prime mortgage agreements
• Payment Protection Insurance Policies
• Secret commissions
• Miscalculated APR’s
• Unfair charges
• Unfair Terms and Conditions
• Any form of ‘unjust enrichment’ by the lender
• Overpayments

Where your agreement is deemed as ‘unfair’ in any way you may be entitled to compensation. Levels of compensation will be assessed by the level of unfair treatment you may have received. In all cases the solicitors will seek to recover monies that may have been over paid or charges that have been unfairly levied whilst also seeking damages from the mortgage provider for wrong doing.

Five ways the banks fleece us

Five ways the banks fleece us

From The Sunday Times January 20, 2008

Customers face higher current account fees as banks prepare to unveil bumper profits. Britain’s high-street banks have sneakily raised the cost of their current accounts this year, despite a High Court showdown with the Office of Fair Trading (OFT), in an effort to squeeze more profits from customers.

The news comes as banks are expected to announce bumper results in the coming weeks. The “Big Five” – Barclays, Halifax Bank of Scotland, HSBC, Lloyds TSB and Royal Bank of Scotland, which owns NatWest – will report staggering profits of £39.05 billion for 2007, up from £37.5 billion the previous year, according to Brewin Dolphin, a stockbroker. In a time of global market turmoil this demonstrates how much the banks milk customers.

As the banks defended their overdraft charges in a High Court action brought by the OFT last week, new research revealed that they were already clawing back the potential costs of any clampdown on their fees.

Nationwide, HSBC, Smile and Intelligent Finance have all quietly introduced current-account charges that will net them an estimated £173m in extra revenue over the next 12 months, according to research by Moneysupermarket, a comparison site.

Smile, the internet bank, has caused outrage among customers by raising its authorised overdraft rate by 4 percentage points to 15.9%, while the rate if you are in credit has been chopped by a quarter point to 2.75 per cent. The cost of unauthorised borrowing has fallen 9 percentage points but the unauthorised overdraft fee has increased from £15 to £20.

Meanwhile, HSBC subsidiary HFC was fined £1m for mis-selling loan protection insurance last week, in what has been branded an even bigger scandal than bank charges. We highlight the five worst rip-offs and show how you can get back at the banks.

Useless loan insurance

Loan insurance, which is supposed to cover your mortgage, credit card or loan repayments if you are unable to work, is one of the biggest money spinners for banks, yet many customers don’t even realise they have it – or know how much it is costing them.

Payment protection insurance (PPI) is routinely sold alongside mortgages by brokers and can add £72 a month to the cost of a £200,000 home loan – or £21,600 over a 25-year term – though analysts estimate nearly three-quarters of people won’t need it.

Institutions sell between 6.5m and 7.5m policies each year and rake in an estimated £5.1 billion annually in premiums, according to the OFT – more than from current-account, mortgage and credit-card fees put together. In the worst cases, self-employed workers and housewives were sold the policies even though you must generally be in full-time employment to be able to claim.

The good news is that millions of people who have been mis-sold policies can claim a refund. There are about 20m PPI policies in Britain, and if 70 per cent have been mis-sold, as analysts believe, 14m could be in line for a refund, averaging £1,500. This means a potential bill for providers of £21 billion.

Mike Naylor at Uswitch, a comparison site, said: “This is potentially a massive scandal and you should fight for a refund.”

Current account charges

Banks make about £3.5 billion a year by charging us up to £39 when we exceed authorised overdraft limits – even by just a few pence. The OFT believes the fees should cover only the admin costs – roughly £4 – and is taking eight firms to court over the issue.

But there are already signs the banks will not take the challenge lying down, so prepare for an increase in the cost of your current account.

Clydesdale and Yorkshire banks, for example, hiked authorised overdraft rates 3.31 percentage points to 12.95% earlier this month, though their rates if you are in credit went down by a quarter point. Kevin Mountford at Moneysupermarket said: “These recent changes highlight just how easy it is for banks to recover their costs.”

Sky-high mortgage fees

A homebuyer purchasing the typical detached property in the southeast, worth about £500,000, according to Halifax, could now pay £17,500 just to arrange a mortgage as lenders hike their charges to offset the credit crunch. This figure is based on Northern Rock’s two-year fix at 5.59 per cent with a 3.5 per cent fee. Nearly one in ten lenders now offers uncapped fees in a bid to boost profits. Two years ago, borrowers paid an average of £450 to set up a mortgage. Today, the average is about £1,000, netting lenders an extra £1.1 billion a year in revenue, according to research from L&C Mortgages.

Opaque savings accounts

Savings accounts have never been more confusing, according to analysts, with banks luring customers with attractive headline rates, only to slash the interest if you don’t fulfill certain onerous conditions. The tactic costs savers an estimated £860m a year in lost interest according to Moneysupermarket research. A&L’s Esaver is an easy access account that promises to pay 6.5 per cent – but you could earn just 4.28 per cent in certain circumstances.

You earn no interest in any month you make a withdrawal (expect July) and the rate includes a 12-month bonus of 0.35 percentage points. You would earn just 4.28 per cent if you made five withdrawals a year, including one in July, according to adviser AWD Chase de Vere. If you had £25,000 in your account and withdrew £1,000 each time, you would earn £490 less over the year.

Credit card tricks

In 2006, the OFT ruled that card firms could charge customers no more than £12 if they were late making a payment, or if they exceeded their credit limit. However, card providers have simply increased a raft of other fees and hiked interest rates to recoup the lost revenue. Recent changes are thought to be netting them about £30m extra a year.

Royal Bank of Scotland, for example, now charges some customers if they fail to inform it they have moved house. Annual fees are also creeping back – Lloyds TSB is charging £35 a year if you don’t use their card often.

Moneyfacts found that 125 changes had been made to credit-card rates and fees between September and November last year, including higher charges for foreign usage and higher balance-transfer fees.

MBNA’s Reward American Express uses a common trick. It offers a 12-month interest-free period on balance transfers and you receive reward points every time you spend on the card. But purchases incur interest at 15.9 per cent after the first three months.