Many borrowers could sue over loans
A recent report claims that millions of borrowers could be entitled to sue lenders and claim back a percentage of their loans, and this is because of alleged mistakes that some lenders have made with their loan contracts. Banks could be left facing whopping bills at a time when their financial situation is already facing massive problems, and some experts reckon that some consumers could end up being able to wipe out all of their debt as a result of the errors.
The errors are said to have been made in the small print of personal loans for between £5000 and £25,000, and this included errors such as miscalculation of the APR and fees. Officials have said that consumers are more likely to be able to claim if PPI was added to the loan at the time that it was arranged.
PPI, or Payment Protection Insurance, is a type of cover often sold alongside loans, credit cards, and other forms of finance.
One solicitor stated: ‘Most loans will not be sufficiently defective in law to guarantee claimback success but chances are increased if a PPI premium was added at the time the loan was arranged. Lenders are preferring to settle out of court if there is a case to answer.’
A claims management official said: ‘There are undoubtedly thousands, if not millions, of other unfair loans out there still to be checked.’
As expected the British Banking Association is none too pleased with these findings, and one official from the BBA said: ‘Debt problems need to be faced properly – attempting to get debts written off is not a good way to do this.’
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