Challenge late payment fees and win

June 2nd, 2010

Late payment fees have come under the spotlight this week after a successful challenge by a borrower who will now be repaid over five hundred pounds. Mike Parry challenged the fees charged by Close Premium Finance (CPF) and will now be repaid the fees plus costs and interest.

Last year, as readers of this blog will be only too aware, the Supreme Court rejected a well publicised challenge of the legality of bank overdraft charges by the Office of Fair Trading (OFT). Because of that ruling a judge rejected Mr Parry’s original claim against CPF.

The redoubtable Mr Parry then made his claim more specific and managed to get it reinstated by pointing out that the Supreme Court ruling applied to bank overdraft charges only, not to charges imposed on other loans. This meant that the 1999 Unfair Terms in Consumer Contract regulations (UTCCR) could be applied to the late payment fees levied by CPF on the grounds that they were arguably unfair.

CPF somehow failed to even submit a defence against this new line of argument, and Mr Parry was awarded his claim by default. This means a court did not actually make a ruling on his legal argument but, when bailiffs were authorised to begin seizing property, CPF magically agreed to pay up.

However, CPF has said that the court’s decision was founded on an administrative error and it will still dispute the settlement.

Mr Parry was supported in his claim by the Consumer Action Group, who believe, rightfully, that the OFT should make it much clearer to financial services customers that the Supreme Court ruling only applies to bank charges and not to late payment charges.

This case has the potential to begin a long hard journey towards redressing the balance of fairness towards customers after the ludicrous Supreme Court decision last year. If CPF’s challenge to the court decision is unsuccessful it could open the way for many other people to try to reclaim late payment charges. However, at the moment that is a big if.

This entry was posted on Wednesday, June 2nd, 2010 at 5:24 am and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Challenge late payment fees and win

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