How to Challenge an Unfair Credit Agreement

Thousands of people in the U.K have been the victim of unfair credit agreements, meaning that the loan and hire purchase agreements they took out are not legally binding. Under the terms of the Consumer Credit Act 1974, all credit agreements must conform to a list of criteria. If this is not the case, then individuals can have their debt wiped clear.

Read on to find out how you can find out if you have been among the thousands of people who have been affected by an unfair credit agreement, and what you can do to free yourself from this debt.

Stage 1 - Check the following:

The first stage in the process of establishing whether or not you have an unfair credit agreement is to check the following:

Your credit agreement must be in one of these forms:

• Credit Card

• Secured loan (using your property as a guarantee)

• Unsecured loan (without guarantee)

• Consolidation loan (taken out to cover smaller debts)

• Deferred loan (e.g. "buy now, pay next year")

• Vehicle finance loan (e.g. car loans)

In order to have a case, your credit agreement must have at least 12 months remaining and have over £1000 left to pay.

Stage 2 - Contact a claims company

The next stage in discovering whether or not you have an unfair credit agreement is to contact a specialist claims company, who will be able to advise you on whether or not you have a valid case, and if so, they will be able to guide you through the process

Stage 3 - Get a copy of the agreement

If it is agreed that you have a valid claim for an unfair credit agreement, the claims company you have assigned will contact the lender to request a copy of the original agreement. Under the terms of the Consumer Credit Act, they have an obligation to do this.

Stage 4 - Agreement is audited

Once they have received a copy of the credit agreement from your lender, your claims company will then forward this on to a team of solicitors who will carry out a comprehensive audit of the agreement. This will establish once and for all, whether or not you have grounds to prosecute the lender for issuing an unfair credit agreement.

Stage 5 - Litigation

If found to be in breach of the consumer credit act, your solicitors will bring this to the attention of your lender and will apply for a date to bring the case before the courts.

If a settlement is not made out of court, then your solicitor will represent you in court proceedings against the lender.

Stage 6 - Result

If your case is successful then your credit agreement will be deemed unenforceable, meaning that it will effectively be torn up. This means that you won't have to pay the outstanding balance on the agreement.