Southport couple heave a sigh of relief as court cancels £384,000 debt |
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Fri, 29 Jul 2005 06:35
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LONDON: Tony and Michelle Meadows had almost given up hope of any viable future as they had fallen victim to a lenders' contract under which they had to shell-out a massive £384,000 for a £5,750 loan that they had taken in 1989 at an annual interest of 34.9 percent. They had been knocking on the doors of law to give them justice and this is precisely what happened when the Court of Appeal ruled in favor of the couple yesterday.
London North Securities had challenged a ruling by a Liverpool county court in which three judges had voted to wipe out the Meadows' debts. They had ruled in October that the loan agreement could not be enforced under the Consumer Credit Act as the terms of the loan were falsely stated. The actual loan amount was £5,000 as against the £5,750, which was stated in the agreement.
The agreement had included an insurance premium of £750 which the judges rightly pointed out was "extortionate". In ruling in favor of the couple, the appeals court said, "We dismiss the appeal because, if the insurance premium was part of the total charge for credit, as we hold, then the amount of credit under the agreement was incorrectly stated. It should have been stated as £5,000, not £5,750."
It had also emerged that the Southport, Lancashire couple had already paid back £26,000 over the last 15 years before last October's ruling. They had originally availed the loan to put in central heating in their home and also to convert a bathroom into a third bedroom.
Tony Meadows could not hide his happiness at the ruling, "For the first time in fifteen years we can actually plan a future, we can plan what we're going to do without the Sword of Damocles, if I can put it that way, hanging over us. So it's fantastic news. I'm still coming to terms with it. It's absolutely brilliant" he gushed.
However, the lending industry was disappointed at the verdict since it claims that Meadows knew about the terms of the loan agreement.
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