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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I took out a Fixed sum credit agreement with a company to finance

Resolved Question:

I took out a Fixed sum credit agreement with a company to finance the purchase of a car. The agreement sets out the amount of credit, total interest, arrangement and credit facility fees, and the total charge .
However, there is one major error on the agreement. To shows two interest figures:
interest rate: 26.98%
APR: 49.9%
The interest rate figure, is the figure that I relied upon when signing the agreement, to understand that bargain I was making.
Based on the payments set out in the agreement, that actual interest rate (not APR) is 42%. Since this (important) part of the agreement is so wrong. Is this agreement enforceable?
I wish to approach the finance company to ask to pay at the lower rate as shown on the agreement. And knowing that the agreement in unenforceable will make me more able to do this.
Thanks
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

my name is ***** ***** I will help you with this.

Alex Watts :

please let me know when you took out the credit agreement?

Customer:

27/04/2013

Alex Watts :

The rules changed a few years ago under the Consumer Credit Act 2006.

Alex Watts :

This means that before where if there was a breach of the prescribed information then the agreement is automatically unenforcebale.

Alex Watts :

Now its changed.

Alex Watts :

This means it can be enforced through the courts.

Alex Watts :

But what you should do is write and complain about the interest rates.

Alex Watts :

They will investigate the matter and report back to you.

Alex Watts :

If you are still not satisfied then you can take it to the Ombudsman. They offer a free, independent service and can be found at: www.financial-ombudsman.org.uk

Alex Watts :

I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything about this today please?

Customer:

One further clarification. I beleive that this means that moment, the agreement is unenforceable, without a court order to allow them to inforce the debt?

Customer:

enforce*

Customer:

Surely it would be reasonable to presume that a court would make decision based upon intentions.

Alex Watts :

Yes a Court order is needed.

Alex Watts :

The Court will look at the intent of both parties yes.

Customer:

Would it a reasoable to say to the finance company, that a court may reduce the total payable based upon the lower interest rate stated on the agreement?

Alex Watts :

That is something you could raise with the financial Ombudsman

Customer:

Okay. I think it worth a conversation first. I will call in the morning. Thanks help. It seems that there isn't a definitive answer as it would depend upon the discresion of the court if it ever went that far.

Alex Watts :

Yes that is right. Its not hard and fast.

Customer:

Well I guess it's not bad news. Thanks help!

Alex Watts :

Can I clarify anything else ?

Customer:

Well, since you asked... Does this not constitute an unenforceable contract on the grounds of mistake, or of their not being a 'meeting of the minds'?

Alex Watts :

No

Alex Watts :

This is simply an enforcement argument.

Customer:

okay. that's all I have. Thank you.

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