Heather Korwin-Szymanowska of D&R.co.uk reached an out of court settlement for a client whose consumer credit agreement with Shenley Finance Ltd appeared unenforceable.

Glenys Bell, from Caerphilly in Wales, approached us when she got into financial difficulty with her loan.

Mrs Bell agreed a £9,944 loan in 1992 with a company called Shern Management Ltd. She had wanted the loan initially to pay off some small debts, and carry out some home improvements. The loan included payment of an £800 broker fee for arranging the loan. The loan was secured on her house like a mortgage, and was for a 12 year term. Shortly after the loan was taken out, it was transferred to another company called Shenley Finance Ltd.

Within only a few months of the loan being taken out, Mrs Bell fell into arrears with her payments, and the amount of interest and charges on the loan increased rapidly. Mrs Bell paid as and when she could, and on several occasions paid all the arrears in full to bring herself up to date. However, by the end of the 12 year term, there was still a large balance outstanding. Shenley Finance then began to threaten Mrs Bell with repossession were she not to pay the full amount due under the loan. Mrs Bell sought advice from her local Citizens Advice Bureau (CAB) who referred her to us.

Heather Korwin-Szymanowska says: “By 2007, Mrs Bell had paid over £43,000 for a loan for just £9,944. Despite this, there was still almost £36,000 left to pay as a result of the arrears and charges placed on top of the loan”.

“Mrs Bell was eligible for Legal Aid to assist her in this matter, and it was soon discovered there were problems with the original agreement. On inspection, the brokers fee of £800 was included as a ‘charge for credit’. This meant that the amount of credit was actually misstated, and this goes against the strict regulations of the Consumer Credit Act 1974.”

“The impact of this meant that the agreement was unenforceable, so we were able to reach a settlement with Shenley Finance on Mrs Bell’s behalf. The company wrote off the remaining balance of the debt and paid her legal costs.”

Mrs Bell adds: “I would just like to say how grateful I am for all the help and support. If it were not for them, I would still be paying for the loan, or could have had my house taken off me. I would say to other people out there to not be afraid or hesitate to ask for help or advice about their agreement, as they could end up having their debt written off as well.”