Kate Richmond, instructed by Paul Tilley at Wannops, has recently been successful in a counterclaim brought by Mrs Charles against lender Blemain Finance for unfair terms in a consumer credit agreement.

The outcome has reduced the interest, costs and charges on Mrs Charles’ account by more than £25,000.

The proceedings related to an unregulated, interest-only, secured loan for £30,000 that Mrs Charles entered into in August 2006. In 2007, Blemain brought possession proceedings resulting in a suspended possession order. The arrears were cleared and no further action was taken. In 2018, Blemain sought to enforce the possession order. Permission was granted to bring a counterclaim for unfair terms under the Unfair Terms in Consumer Contract Regulations 1999 and an unfair relationship.

The judgment held that the clause in the agreement allowing the interest rate to be varied was unfair under the 1999 Regulations given its broad potential operation, limited notice period and curtailed ability to redeem. The clause in the agreement relating to costs, charges and expenses was also held to be unfair due to its wide scope and potential application to charges not incurred by the lender. Both clauses were struck from the agreement and the account was reconstructed.

The judgment also considered the application of the transitional provisions contained in Schedule 3 of the Consumer Credit Act 2006.

The case has been recently reported in the Guardian here