Reclaims4U Press Announcement

We issued the following press release on Thursday for our client, Reclaims4U, following a mystery shopping exercise. It's very timely, given the fact that the Supreme Court upheld the Banks' appeal regarding unfair charges.

http://www.reclaims4u.co.uk/

NEWS RELEASE: Reclaims4U Ltd urge caution where firms offer to “write off”, “wipe out” or “clear” your debts

LANCASHIRE financial reclaims business, Reclaims4U Ltd is warning consumers to be cautious when looking to pursue a claim against their credit card or loan agreement for ‘unenforceability’.

In the wake of yesterday’s Supreme Court ruling in favour of the banks over ‘unfair charges’, many hard-up consumers may be looking at other means of pursuing the banks for unfair charges.

As such, Reclaims4U has expressed concern for consumers who may now be considering looking at unenforceable credit agreements, such as credit cards. A mystery shopping exercise conducted by the business revealed some startling discrepancies - such as wide variations in upfront, irredeemable charges and unsubstantiated claims about the potential for a successful outcome. For example, of those businesses questioned, nearly 40 per cent said there was a greater than 80 per cent chance of success with 12 per cent of businesses claiming that that there was a “100 per cent” likelihood of a successful outcome.

It has become clear that a proportion of credit card or loan agreements may not be fully compliant with prescribed terms as required under the Consumer Credit Act of 1974 – and some of these credit agreements could be deemed unenforceable, which means consumers may be paying Credit Cards or Loans which are not enforceable. A large number of businesses have emerged offering to work on behalf of consumers to “Write off”, “Wipe out” or “Clear” their debts, phrases which are not compliant with Claims Management Regulations.

Reclaims4U Ltd – the company that conducted the mystery shopping exercise over the 9th and 10th of November, is urging consumers that whilst credit agreements can be reviewed to assess whether they are enforceable or not, they should be cautious and ask the right questions before instructing a company to get their credit card or loan agreements reviewed.

Reclaims4U’director, Lee Blackshaw commented: “There are a lot of companies trying to cash in on this sector, although not all of them are acting in the best interest of their clients, as whilst they maybe explaining the benefits of unenforceability they are not fully advising consumers of the potential consequences.”

“We found that many of the 39 businesses we spoke to didn’t fully explain the process and its drawbacks. Over 56 per cent said that successful claims wouldn’t affect the consumer’s credit rating, when this is currently not the case.”

“A big concern is that whilst consumers may have credit card or loans deemed unenforceable, at the moment the debt stays on your credit file, which could effect future credit applications such as loans or mortgages.”

“Although Lenders are currently required to register the fact that a debt has been deemed as unenforceable on the credit bureau, there is currently nothing to stop the lenders continuing to register the customer’s payment history. As this is the current Legal position, I’d urge people to proceed with caution.”

“In the current financial climate it is understandable that people will consider this option because they could be struggling to make ends meet. Pursuing credit card or loan unenforceability is an option, but you should be aware of the full facts and also the costs before proceeding with such a claim – over 30 per cent of companies charged an upfront fee between £200 and £300. Over five per cent charged more than £500 and the highest upfront fee we came across was £995!”

“With regards to claiming, there are other options which are worth pursuing such as claiming against mis-sold payment protection insurance on loans or credit cards - most importantly - whatever you do, always talk to a reputable company.”

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