London North Securities has been convicted for trading without a consumer credit licence between March 2007 and February 2010. The lender was ordered to pay £400,000 under a confiscation order.
London North Securities (LNS) was convicted at Southwark Crown Court for imposing unfair terms on borrowers. It has been ordered to pay £400,000, with the money being used to compensate up to 56 LNS loan customers. The company was chastised for imposing very high interest charges on legal fees, and causing customers ‘distress and aggravation’.
High interest loans
Which? members are among those who have suffered losses due to LNS’s practices over the years. In 2006 and 2007 we reported on cases where people have successfully challenged the company in court, including one instance where a couple found themselves facing a bill for £37,000. The couple had taken out a loan for £2,760 and incurred interest of 37.3% on a legal fee of £150.
In passing judgment Judge Rivlin said that LNS’s tactics of pursuing customers while unlicensed amounted to ‘merciless exploitation of ordinary, vulnerable people’.
As a result of the judgment LNS sole director Harvey Collis gave an undertaking that he would never engage in any activity that requires a consumer credit licence. The charges against him will remain on file. Should he breach the undertaking he is likely to be in contempt of court and subject to imprisonment and/or a fine.
The prosecution was brought by the Office of Fair Trading, whose Consumer Credit Group director Ray Watson said: ‘LNS traded in blatant disregard for the law, and this outcome sends the clearest message to traders that they must be licensed or face action by the OFT. I am delighted that, as a result of the Court’s decision, significant compensation will be paid to borrowers who dealt with LNS while the company was unlicensed’.
For more information on credit, read the Which? guides Your loan options and .
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