First Step Finance LTD

Unenforceable Agreements

CREDIT AGREEMENTS THAT MAY BE UNENFORCEABLE

The vast majority of credit agreements are unenforceable because they fail to comply with the prescribed terms, as set out in the Consumer Credit Act 1974 (CCA ’74). Credit agreements may be unenforceable if:

• the agreement does not state the amount of credit.
• credit/store cards do not state the credit limit or level of monthly repayment.
• there is no rate of interest.
• the agreement does not state how the borrower is to repay any credit by specifying the number of instalments, the amount of repayments, when they are due, their frequency and timing, and any powers available to the creditors to vary what is payable.
• a consumer hire agreement does not contain information as to how a hirer is to discharge his/her obligations.
• the agreement is not signed.
• in the case of cancellable agreements, failure by the creditor or hirer to include, in an agreement or copy, notice of the right to cancel (in the prescribed form), or failure to supply a separate notice of a right to cancel where it is required.

There are other situations where an agreement can be challenged, which is why a detailed analysis is made on each individual case and an agreed debt reduction programme is discussed with you before contact is made with creditors.

IS IT MORALLY WRONG TO CHALLENGE AGREEMENTS?
Some people believe it is wrong to use the CCA ’74 technicalities as a means of assisting debtors in avoiding payments. One of the main themes to the Consumer Credit Act is that there is openness and honesty in lending. If these principals are to be pursued it is necessary that the options arising from the CCA ’74 rights, obligations and irregularities can be identified and, if necessary, challenged.

WHAT IF THE LOAN IS SECURED ON MY HOME?
Providing the loan is regulated under the Consumer Credit Act, we can assist you in challenging the agreement if it falls into one of the unenforceable categories listed above.