james
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Post by james on Apr 26, 2014 5:14:57 GMT
The Student Loans Company is to refund interest on many loans where it issued combined arrears notices instead of one notice per loan. All interest and charges from the time the notices were issued until the business sold the loans is to be refunded. The notice requirements were introduced in a 2008 change to the Consumer Credit Act, at the same time as the requirement to issue annual loan statements was introduced. Potential implications for P2x if loans are regarded as individual rather than combined are quite unpleasant for P2x businesses that issue documents on behalf of lenders and are responsible for complying with the law. |
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pikestaff
Member of DD Central
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Post by pikestaff on Apr 26, 2014 6:58:34 GMT
I note this has been done voluntarily because the point came up in DD on the sale of the loans to Erudio, so it is not known whether the FCA or the Courts would have imposed the same penalty. If they would, then this just confirms my view that this is one of the most asinine pieces of legislation known to man.
Be that as it may, it is crystal clear that p2x loan parts are just that - parts of a single whole loan - so there is not a general issue. The point would only be relevant where consumer borrowers have taken more than one loan from a p2x provider and arrears notices are not sent separately for each loan.
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james
Posts: 2,205
Likes: 955
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Post by james on Apr 26, 2014 8:05:08 GMT
We can be pretty sure that they wouldn't be spending the substantial amounts of money involved unless they were pretty satisfied that they had got it wrong. Why else would they be paying instead of just discussing with regulators first?
At least one P2x provider issues contracts and pre-contract disclosures between each lender and borrower involved but only issues one annual statement for the whole amount borrowed. I don't know how they handle arrears statements but I assume it's just one for the combined loan rather than individual notices. I'm not sure whether they would want to argue that it's one loan or one loan per contract. Or maybe they would try both at the same time depending on the context.
I'm not even sure how I want it regarded in law. Both ways could cost me money if a P2x vendor doesn't accept responsibility for getting it wrong and absorb the costs.
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