The Rankines had 13 credit cards
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As more people find themselves in debt, one couple found loopholes in their credit
agreements to avoid paying tens of thousands of pounds. But a High Court judge had the final
word.
Amanda and Basil Rankine ran up debts of £120,000 after their mortgage advice business collapsed
and they found themselves unable to afford their monthly payments.
Their debts were spread over 13 credit cards, four loans, car finance
and an overdraft. They decided to study the Consumer Credit Act and contacted lenders claiming they
had found mistakes in their credit agreements.
The Act lays down the rules which companies have to follow when they advertise or sell
credit.
"I studied the Act and decided that there were things that didn't match so I put together a bit
of a letter to HSBC, thought I had everything correct, and sent it off," Mr Rankine told the BBC's
Panorama programme.
"They wrote back, and after a few months said we're prepared to write balance off."
The Rankines, from Rugeley in Staffordshire, looked at all their credit agreements and
identified potential loopholes.
These included whether the correct annual percentage rate (APR) was used, whether the forms had
actually been signed and if the lenders had kept a copy of the paperwork.
In this way, they managed to have a number of their 13 credit cards and loans written off, to
the tune of £37,000, including the sum from HSBC.
Sir Roy Goode, an eminent commercial lawyer who was instrumental in drafting the Act, said the
rules relating to credit agreements were "extremely complex".
"So any slip that is made entitles the consumer to refuse to pay unless the court gives leave to
enforce the agreement," explained Sir Roy.
Mr Rankine said: "Now more people challenge agreements, and more people will realise… the law is
there so they have a choice. Challenge or repay at their level, or challenge and repay at your
level.
The couple decided to take their remaining creditors to court over loopholes they believed they
had spotted, and in an attempt to set a legal precedent that may benefit others. But the case was
dismissed by a High Court judge, who said the couple were wriggling out of debt.
Despite the judgement, a legal technicality - which meant the lenders could only claim the money
back while the court proceedings were going on - meant the couple still managed to get most of
their debts frozen.
Warning
That took their total debt clearance to £100,000, leaving more than £20,000 outstanding.
However, a legal bill of £100,000 left the Rankines back where they started.
At least they were now earning enough to manage the legal costs. With some irony, they are
paying it back through consultancy work on the Consumer Credit Act.
They don't accept they lost the case and they say they would prefer to be paying a legal bill
than paying a debt they thought was unlawful.
The Rankines did their own work in scrutinising their credit agreements, but a whole industry is
emerging online of companies claiming to get debts written off, and securing compensation, by
rendering credit agreements unenforceable.
In August the Office of Fair Trading (OFT) and the Ministry of Justice (MoJ) urged people in
debt to consider the consequences before using the services of these businesses.
"Consumers should think very carefully before committing themselves to making claims and handing
over hundreds of pounds in advance to do so, even where refunds may be promised if the claim is
unsuccessful," the OFT and MoJ wrote in a joint consumer alert.
People struggling with loans are advised to seek free and impartial advice from organisations
such as their local Citizens Advice Bureau
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Challenge
or repay at their level, or challenge and repay at your
level 
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