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ARTICLE · 02 AUGUST 2016

Unfair Relationship But Limited Relief

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There is no precise or universal test to determine an unfair relationship under s140A of the Consumer Credit Act 1974 (CCA).

United KingdomConsumer Protection
Greg Standing
Greg Standing
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This article was originally published on Motor Finance in July 2016.

There is no precise or universal test to determine an unfair relationship under s140A of the Consumer Credit Act 1974 (CCA). Whether the relationship is unfair, and if so what remedies that will be available, will depend on the court's assessment of all the relevant facts.

In Nelmes v NRAM PLC, Nelmes obtained a loan of over £2 million from the bank secured on 26 properties. Nelmes' broker's fee was 0.75% of the sum advanced (£16,112) and the bank's arrangement fee was 1% (£21,483). In turn the bank paid half of the arrangement fee to the broker as a procuration fee by way of commission. The payment of the procuration fee was not disclosed to Nelmes.

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