Who Has Illegal Credit Cards? Write Off Debt Now
Complying with the Prescribed Terms of the Consumer Credit Act 1974
Nov 18, 2008
If any credit agreements were signed prior to 6th April 2007 there is a 60% chance that the borrower has signed up to one or more illegal credit cards. A requirement of the Consumer Credit Act 1974 is that the credit card agreement complies with certain prescribed terms.
Examples of Unlawful Credit Card Agreements Under the Consumer Credit Act 1974
- The lender doesn't have a copy of the credit card agreement;
- The amount of credit (or credit limit) hasn't been stated on the credit card agreement;
- The interest has been incorrectly calculated;
- An increased credit limit has been provided on the credit card agreement without it being requested;
- The credit charges are not deemed to be fair;
- No rate of APR is displayed on the credit card agreement;
- There is no mention of any 'cooling off' period;
- The credit card agreement hasn't been signed by both the lender and borrower.
Settled Debts Cannot be Successfully Challenged Under the Consumer Credit Act 1974
It is unlikely that settled debts in relation to illegal credit cards can be recovered. A number of test cases have gone through the courts and none have been successful to date. Credit card debts that have been included in IVA's and Debt Management Plans can be legally challenged.
What Happens if the Credit Card Agreement Is Lost?
Sending the lender a Subject Access Request (SAR) entitles the borrower to get a copy of the credit card agreement. It is necessary to include a cheque for £10 to cover any administrative work performed by the lender.
The lender has to send any information it holds on the debtor within a period of 40 days or it has committed a criminal offence. If the lender cannot provide a copy of the actual, signed credit agreement they aren't in a position to enforce the debt as it is an illegal credit card agreement.
Does Challenging Illegal Credit Cards Affect a Credit Rating?
Provided payments are maintained during the legal challenge, bad credit won't be an issue. Those who have adverse credit will actually improve their credit rating. This is because the debt was deemed to have never technically existed.
What Happens if the Unlawful Credit Card Agreement Case is Successful?
If it is decided that there is an illegal credit agreement, it is possible that the entire debt will be written off. Other cases involving illegal credit cards will result in the payment of compensation or the agreement being completely re-written.
Get a Solicitor to assess the agreements of any potentially illegal credit cards. They will quickly ascertain whether there has been a breach of the implied terms of the Consumer Credit Act 1974. If struggling with credit card debt, be sure to challenge potentially illegal credit cards.
Those that found this article of assistance may also be interested in reading about taking sensible steps to get out of debt. It is also possible to use a number of debt solutions, including a Debt Management Plan or an Individual Voluntary Arrangement to deal with financial difficulties.
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