Unenforceable credit agreement claims dealt major blow

Borrowers eager to have their credit card debts wiped out due to a legal loophole have had their hopes dashed after a court ruling went in the banks' favour.

Thousands of claimants have been attempting to have their credit card debts quashed by requesting the original credit agreement from their banks. Theoretically, if the bank could not produce the original documentation then this would deem the agreement "unenforceable" and the debt could not be chased.

But a High Court judge has decided that banks may chase debts even if they cannot produce the original credit agreement within 12 working days or have lost it.

The judge said that debts are still valid if the bank can produce a reconstituted version of the credit agreement, even if it isn't an exact copy of the original.

Hundreds of these borrowers have been using claims management firms who charge up to £400 up-front to for their services, but it is now unlikely that many of these claims will be successful - potentially leaving claimants even deeper in debt.

However, there is still a glimmer of hope for some borrowers. An earlier court ruling stated where a customer has been treated unfairly by a bank and in cases where there have been technical breaches of other consumer rules, then there is a chance of having debts eradicated.

Helpful links:

Claims Financial

How to make a good customer complaint