We know of one particular couple who have many reasons to be grateful for a claim handling firm. The couple used them to try some debt dodging and, if reports are to be believed, they avoided having to repay some 100,000 pounds by bringing to light errors in their consumer credit agreements.
One major high street bank agrees that decisions to waive debts like this are commercial decisions, based on the fact that any dispute in an uncertain legal area could lead to huge legal costs. Other banks however, have decided not to roll over and will fight back.
The couple had taken five credit card and finance companies to court in order to get some 37,000 pounds of debt written off due to alleged deficiencies in the paperwork relating to the loans. As soon as the case started the five finance companies withdrew their case but nevertheless the high court judge commented that the couple's arguments appeared to lack a complete lack of legal or factual merit. He also commented disdainfully on the fact that the couple had been bragging that they had avoided a further 65,000 pounds, in addition to the 37,000 pounds involved in the court case before him, by using the finer points of the credit act.
The judge added that the couple were relying on income support and therefore, were not required to pay court fees. Describing the couple as "vexatious litigants" the judge still ordered a civil restraint order to be issued against them, which prevents the couple from instigating claims or proceedings in any other civil court. But by withdrawing from the case the five financial institutions were forced to treat the debts as written-off.
Many banks are now refusing to have any direct dealings with claims handling firms. Neither will they recognise their validity of their right to represent any of their clients. The banks are taking the view that if their clients have any problems or queries they must directly contact the banks. If clients find themselves in financial difficulty the banks are stressing how important it is for the them to contact their lender or financial adviser.
As a result of a flurry of similar actions in the courts, many finance companies are re-examining their terms and conditions. Their aim is to ensure there are no loopholes left open for anyone to exploit. As a result many are issuing replacement terms and conditions.
Having received over 6,000 claims, one of the UK's major credit card companies has now refused to have any contact with claims handlers. They have simply refused all payments on all claims they have received.
Another large credit card company, whilst not reporting the number of claims they have received, reminds all its customers of the concerns voiced by the Ministry of Justice and the Office of Fair Trading. They have warned the public; "Before committing yourselves to making claims and handling over hundreds of pounds in advance fees, think very carefully. This applies even if the claims company promises to refund the money if the claim is unsuccessful".
Despite all this criticism, claims firms are not too concerned. They continue to advertise heavily, inviting applications from agents to introduce new business to them.
For help and advice on any matters concerning loans, the best route is an independent online broker. These brokers are fully informed about all aspects of the market and will go the full mile to find you the right products from reliable lenders.
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