Unfair Relationship Claim

What is an Unfair Relationship Claim?

The Consumer Credit Act 1976 (as amended) ensures borrowers are fairly protected from predatory lending practices. What this means is that where it can be demonstrated that the relationship between you (the debtor) and the lender (the creditor) is unfair then the courts have a wide range of powers available to put the unfairness right.

In November 2015, The Supreme Court, the highest court in England and Wales provided binding guidance that lenders must be open and transparent with borrowers, specifically when they are making a secret profit that if disclosed would have affected the borrower's decision to enter the credit agreement.

The Consumer Credit Act, and the recent court judgement means that a loan may be deemed as Unfair for any of the following reasons:

  • The lender did not inform you that a secret profit up to 85% was retained by them when they provided a PPI policy;

  • The lender did not conduct a fair and reasonable affordability assessment;

  • The lender did not consider how you would repay the capital on an uncovered interest only secured loan;

  • The lender failed to take adequate account of your ability to repay the secured loan when your circumstances changed, EG: Retirement

  • The lender paid your loan broker a ‘secret commission’ which conflicted with their duty to ensure you were treated fairly;

  • The lender did not treat you fairly when you fell into arrears or when repossessing your property

What can you claim for?

  • Any payments made by the lender to the loan broker

  • Any commission retained by the lender on any PPI product sold (typically this would be around 70% of the full policy value)

  • Any loss suffered as a result of the lender’s ‘unfairness’

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