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Old 01-07-2011, 11:54 AM
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Default Hello everyone... need a little help with a Loan

Hello everybody....

I'm a bit poorly and low... but I need to get back into helping more here...

However I do need some guidance if anyone would be good enough.

I have suffered the consequences of NRA from my employer and despite a lot of appeals have now been dumped and forced to retire....

Some of you knew that I could not respond to certain threads because I felt obliged not to work against my employer .... RBS...

Sad I know...

Anyway I was based in their HO in Edinburgh and to help my cash flow I used to regularly apply for and obtain a free loan to buy in advance cheaper flights. I am looking at the form I used to submit each year its called Application for a Staff Season Ticket Loan.
It contains the Loan Details - amount requested, duration 12 months, monthly repayment, final repayment, first repayment date and final repayment date.
There is a declaration section which state that I understand how the money will be deducted from me and if I leave they can deduct the balance from my bank account... I owe them 1800

There is absolutely no mention of the CCA and I have never received an agreement.

I asked for a copy of the agreement as part of the SAR... I finally got a letter today ... we confirm that the 'application form' is the Credit Agreement for your Staff Season Ticket Loan......

mmmm surely this cannot be true... I need help with a reasoned reply as to why they are wrong... for a change I am word tied....

HELP if you can please

thanks

Z
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  #2  
Old 05-07-2011, 08:31 AM
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This is not something I have come across previously so some research is going to be needed. I would have thought that the loan should still conform to the cCA.
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  #3  
Old 05-07-2011, 10:41 AM
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Default

Yes Tam it is rather interesting....

as far as I can tell ANY loan regardless of terms is subject to CCA.

They have said that they have complied with the DPA requested so I have now submitted a formal request for a true copy of the executed agreement containing all the prescribed terms and T&Cs.

Lets see how they respond to that

Z
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Old 05-07-2011, 01:49 PM
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I am wondering if this type of loan is similar to laons made by companies to employees and are governed by a different legislation. These loans are generally signed off by Trustees and are meant as a short term, credit union type of lian. As such they are not subjected to the CCA. They normally have a start date, end date and anount to be deducted out salary. Sometimes these can be secured aganst property or unsecured. Similar to me lending you money.
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Old 05-07-2011, 08:24 PM
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DL I think you will find that this loan and in fact any loan regardless of source or circumstances is regulated under CCA.

I have read it in the introduction of the Act and described in the scope of regulation.

At the very least a simple contract signed by both parties should accompany any loan. An application is merely that ... A request for a loan and agreeing to the terms IF the application is approved.. But that must be confirmed with a signed contract.

Well your honour... I applied for a loan but I've never signed a contract so why should I repay?

Z
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Old 06-07-2011, 09:15 AM
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I understand what you are saying, but I think it is not governed by the CCA. I am not sure what the legislation is and I hope someone with more knowledge can help. it will be interesting to see what the DPASAR reveals for you.

I agree it is a contract between ttwo parties, so maybe it comes under some form of contract law......I am thinking aloud here. I am thinking along the lines of what is called a subsidised loan given to students by colleges, it does not earn interest. If your loan has interest it is a an unsubsidised loan, but still comes under different contract, not the CCA

This is what I have found out

The company pays into the trust and the employee is lent the money via the trust. No tax is payable on the loan itself. The repayments are deducted from your pre-tax salary, thus reducing your tax/NI liability. However, loans of >5k/year are taxed on the "interest" you would normally be paying, i.e. 40% of a "standard rate". So it can work out very tax advantageous. However, the value of the product you actually buy with the loan may be taxed as a benefit in kind, depending on what it is. Whether this applies to season tickets, I am not sure. Sorry I can't help further.

It's great for the employer though - no NI, tax relief on their contributions to the trust, and it's "green".

http://www.pistonheads.com/gassing/topic.asp?t=823928

Student loans are not governed by the CCA, so I am thinking Employer Loans fall into this category. Reading a bit more and these loans are classified as a Personal Loan and they are not governed by the CCA, because there are tax breaks for the employer in giving them. It does fall under HMRC Legislation

Last edited by Dragonlady : 06-07-2011 at 09:43 AM.
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  #7  
Old 08-08-2011, 10:10 AM
sparkie1723 sparkie1723 is offline
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Hi Zubo,
Look to section 8 of the CCA..............I think your answer is there.

sparkie
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  #8  
Old 09-09-2011, 12:37 PM
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Default The argument

Thanks Sparkie.... bit late with the thanks.... but I had concluded the same. Their argument is that their underwriters claim that since it is an employee benefit it is not covered by the Act.

I beg to differ and have asked them to refer the matter to their legal team rather than an employee who has been trained as an underwriter but has no experience with the law. Also to refer to Section 8:

8.-Q) A personal credit agreement is an agreement between
an individual (" the debtor ") and any other person (" the
creditor ") by which the creditor provides the debtor with credit
of any amount.
(2) A consumer credit agreement is a personal credit agreement
by which the creditor provides the debtor with credit not
exceeding 5,000.
(3) A consumer credit agreement is a regulated agreement
within the meaning of this Act if it is not an agreement (an
" exempt agreement ") specified in or under section 16.

Exempt agreements in section 16 are:

16-0) This Act does not regulate a consumer credit agree- Exempt
ment where the creditor is a local authority or building society, agreements.
or a body specified, or of a description specified, in an order
made by the Secretary of State, being-
(a) an insurance company,
(b) a friendly society,
(c) an organisation of employers or organisation of workers,
(d) a charity,
(e) a land improvement company, or
(fl a body corporate named or specifically referred to in
any public general Act.

so cannot see any exception here......

Let us see whether they do refer the matter... to the legal team.... and if so what they say.....

Now the second part of this dispute is..... if the Loan is regulated and their is no agreement then I have paid them all that money in error.... so under the Laws of Restitution I am entitled to claim that back with interest...

but... you might argue I was provided with Loan - shouldnt that be returned.... not if you refer back to the argument in the famous High Court case.... brain gone to sleep... cannot just yet give you the case...

Z
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  #9  
Old 09-09-2011, 12:45 PM
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This is interesting to follow Zubo. I hope you get a reply from the Legal Team and see what they say. When i worked in the NHS there were a lot of employee benefits and I am wondering now about relocation expenses and the car buying assistance extended? i never took advatage of these as had my own car perfectly happy with and of course own home so was not interested in relocating to hospital provided accommodation.

You might have opened a can of worms if there is no clear cut answer.
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