MW was instructed to act for Ms Walker who approached Meta Panchamia in our Commercial Dispute Resolution Department for advice on an action commenced against her by Prestige Finance Ltd (PF).
Partner & Deputy Head of Civil & Commercial Litigation
PF has advanced an unregulated loan to our client in April 2005 (the then £25,000 regulated threshold) despite our client having asked for a loan for £18,000. The loan was to pay off some debts but when she signed this agreement she did not know she would actually end up in more debt. The loan was for £27,050 with costs and interest at 14.5% per annum (when the Bank of England base rate was 4.75%) over 240 months, provided she did not default in which case there were penalty payments. Her claim was that she was misled into signing the agreement.
Our client in fact, wanted the loan to be for a short term and wanted to be able to repay it when she could afford to do so. The terms were never properly explained, the broker involved persuaded our client to take a larger loan and required her to secure it against her property for which she had no legal advice.
The major issue was the interest was extortionate at 14.5% with penalties if she missed a payment. When she approached us she had paid just over £48,000. She had put in her own defence and needed proper guidance on some complex areas of finance law.
It appeared to us that our client had a strong arguable case. An amended defence was filed asking for the agreement to be re-written given the unfairness. Our client had also been subjected to a breach of data protection and a counterclaim was added. The finance company had sent her personal data to a third party notwithstanding the fact that they had also lost her file.
Despite efforts to try and settle the matter the case was heard in Brentford County Court and a reserved judgment was handed down on 16 October 2019 when Judge Nisa decided that the agreement should be re-written. The interest rate was reduced to 5.5% and that meant our client is to be repaid £1,856 back along with £500 in damages for the data protection breach and costs. The possession application was lifted and the charge will be removed.
The client was of course very pleased as this matter has caused her sleepless nights. She is finally able to get on with her life without the constant pressure of a loan company demanding repayment of an unreasonable sum.
It is unfortunate that some finance companies can convince vulnerable consumers into signing loan agreements where the terms dictate that the amount due to the loan company, will never be paid off until after their lifetime. Here we were able to assist the client which resulted in a very successful outcome.
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