Transcription Of Panorama Documentary

Jeremy Vine: "Hello I am Jeremy Vine and this is "Panorama". The Great British love affair with Credit is over and Lenders are getting tough.Whilst its payback time for most of us, some Borrowers are fighting back"... "Mr & Mrs Rankine are a couple who have attempted to avoid paying back their debts"...

Panorama: asks the Rankine's "Out of the £120,000 how much have you managed to avoid paying back ?"

The Rankine's: reply "About £100,000"

Panorama:  "They are using tiny mistakes in the small print to get their debts wiped out. Roughly about one in five Agreements have problems with them. With Lenders desperate to get their money back and Borrowers increasingly unable to repay it, the gloves are off"...

"We were splashing cash about in the good times and so were the Lenders. On average every single British adult now owes almost £5,000 on Credit Cards, Loans and Overdrafts. The idea that the money belongs to somebody else and will have to be repaid at some point, seems to have gone out of the window"...

"Now the Lenders are struggling to tell the difference between who those who Can't pay and those who Won't pay"...

"The two sides are squaring up. On one side the Lenders who want their money back, they need it because they are desperately short of cash. On the other us the Consumers, we have spent the money they offered and if we Can't pay it back we are facing tougher tactics than ever before"...

"But this story cuts both ways"...

"A whole industry has emerged on the web claiming it can find loopholes in the small print of our Credit Agreements"...

"Have you ever thought about taking your Credit Card providers to Court to get them to Legally write off your Credit Card Debt, some people have and they have won their cases"...

"The message is if you are prepared to challenge your Lenders in court, you might just have them running for cover"...

Panorama: asks The Rankine's "So when things were at their worst, what was your biggest level of debt?

The Rankine's: state "Just over £100,000, about £120,000"

Panorama: asks The Rankine's "You don't know exactly"?

The Rankine's: state "Its not something you really like to look into in that much detail, I think most people are the same , they avoid looking at their debt collection letters and things like that"

Panorama: states Mr & Mrs Rankine have 13 Credit Cards, 4 Loans, Car finance and an Overdraft

The Rankine's: state "Half of it was living expenses and half of it was the extras, the luxuries, the nicer things that ordinarily you couldn't afford unless you borrowed that money"

Panorama: states Mr & Mrs Rankine's business starts to fail and they began to miss their monthly repayments. It was then Mr & Mrs Rankine had an idea, they got hold of a copy of The Consumer Credit Act and began trawling through it page by page, it lays out the Rules for every purchase we make on credit in the UK, apart from our homes. Armed with this, they began looking for mistakes their Creditors may have made in the paperwork and then they took on their first Lender.

The Rankine's: state "I put together a bit of a letter to HSBC, thought I had everything correct, sent it off, then the Bank wrote back after a few months and said ‘We are prepared to write the balance off'".

Panorama: asks The Rankine's "How much have you managed to avoid paying back"?

Mr Rankine: "That was about £10,000 for a HSBC Credit Card, HSBC said they wrote off the Debt because they had lost the original documents"

Sir Roy Goode is an eminent Lawyer who knows the Act better than most, he was instrumental in its creation more than 30 years ago......

"The rules relating to the formation of the Agreements are extremely complex, it is very easy for a creditor to make a little slip. Indeed in some respects the rules are not very clear, so that any slip that is made entitles the consumer to refuse to pay unless the court gives leave to enforce the Agreement"

Among the potential slips the Rankines were looking for was: had the Agreement been signed, was the APR accurate and in the right place, did the Creditor actually have a copy of the Agreement at all. Their tactics began to pay off.

Mr Rankine: "Some Lenders would say they couldn't find a copy of the Agreement so they are prepared to write it off, others would just say they were prepared to write it off without giving an explanation, they wouldn't commit themselves to say this is the point that was wrong".

Panorama states: There's reason for Basil and Amanda Rankine to celebrate. Basil successfully challenged 6 Banks. By now their Creditors had written off £37,000. They were not alone specialist Legal Firms were winning with similar tactics.

Andrew Leakey - Consumer Litigation Specialist:

"We would say that roughly about one in five of the Agreements that we see have a problem with them. However the ones we see are also being filtered through by other people, so it may be about one in ten"

Panorama asks: "So with that quantity you are talking about those would get the loans written off, completely written off ?

Mr Leakey states: "Yes the existing Loan could be written off"

Panorama states:  "Now people will find that quite extraordinary, would you say that is down to the drafting of a letter or a missing fall stop ?"

Mr Leakey states: "No, its a bit more substantial than that, it could be how the Loan was sold or indeed how the charges have been put in to the paperwork that have essentially been put in the wrong place"

Panorama states: By now Mr & Mrs Rankine were so geared up that they went to the High Court to see if they could get their remaining debts written off, but the Judge threw their case out saying

..."they were trying to wriggle out of their debts and branding them dishonest..."

But because they failed to claim their money back during the case they can no longer do so, so it would seem that the Rankines lost the legal battle but won the debt War!!

Panorama asks Mr & Mrs Rankine:  "Out of the £120,000 that you borrowed, how much of that have you managed to get away with ?"

Mr Rankine: "Part of it is written off by the Lender, that means that there is no Debt on their books and the money is not owed, part of it is the Lender cannot take any further steps to recoup that money from us

Panorama asks Mr & Mrs Rankine: "So how much money have you avoided paying ?".

Mr Rankine: "About £100,000".

Panorama asks Mr & Mrs Rankine:  "You have avoided paying £100,000 out of £120,000 ?"

Mr Rankine: "Yes, we used our Legal rights"

Beating the Lenders has led to online notoriety for the couple. But everytime someone does the same there is a cost.

Eric Leenders - British Bankers Association

"It is unfortunate when some people look to the loopholes to get out of Credit Agreements. Ultimately, the reason why it is unfortunate is that the money that they don't repay has to be repaid by the rest of us"

Panorama asks Mr & Mrs Rankine: "Why are you so special and different from everybody else in that you are allowed to take money of a lending institution and not pay it back ?"

Mrs Rankine: "Because we have studied the Law

Mr Rankine: "The Law says that if I have legal right to avoid paying the debt, then that is my option".

 

Assuming troublesome debts is expensive and time consuming for Lenders. In the first 6 months of this year UK Banks & Building Societies were forced to write off around 3.2 billion pounds in bad consumer debts for various reasons

Remember Mr & Mrs Rankine, they have successfully avoided paying £100,000 of Debt, but now owe the same in Legal costs. Their tactic in trying to set a legal precedent in Court backfired. If they had stuck to letter writing, and loophole detection, they might well be DEBT FREE !!

This is a struggle that will go on for some time as we move towards a recession there is likely to be more Won't Pay's, deepening the Lender's troubles and hardening their resolve to get their money back.  As the Lenders carry on claiming their money back it will only generate more Can't Pay's, and when that happens the Banks lose