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Beware ‘your debt isn’t valid’ advice

Marc Crosby 10th Sep 2015 One Comment

Reading Time: 3 minutes

Don’t be fooled by websites claiming your debt isn’t valid, warns the Financial Ombudsman Service, especially those claiming to be banks.

Be wary of those ‘solutions’ that seem too good to be true

Someone offering money

Over the past year the ombudsman has received over a hundred enquiries where people experiencing difficulty repaying their mortgage have said that they think their mortgage isn’t valid.

People who bring these complaints to the Financial Ombudsman Service (FOS) often refer to and quote from information they have seen online.

The information online, and in turn the enquiries that come to the ombudsman, tend to quote obscure and sometimes bizarre legal reasons as to why a mortgage, or other debt, is not enforceable. The people providing this information and reasoning often refer to themselves as Freemen of/on the Land.

The FOS featured a couple of case studies involving the arguments that mortgage debt was unenforceable in their July edition of ombudsman news.

As these examples highlighted, in the over a hundred cases they had seen, they are yet to find any of these arguments that actually affect whether a mortgage is valid.

Likewise, they are unaware of any court of law making a finding that these arguments have any validity or impact on a lenders right to reclaim the money it has leant.


The fake ‘bank’ making things worse

Older couple taking advice on their finances

Worryingly though, the ombudsman has now started to see a handful of complaints where people have tried to pay their debts and outstanding balances with ‘cheques’ issued by a ‘bank’, set -up by those providing the misleading information over debts being unenforceable.

This ‘bank’ is not registered or authorised by the Financial Conduct Authority.

For a fee, this ‘bank’ will provide a ‘cheque book’ to allow people to pay off debts which they dispute the validity of.

However the ‘cheques’ are not valid as they are not from a real bank, and people using these to attempt to pay their debts are finding this out the hard way.

Genuine banks and lenders do not accept these ‘cheques’ and people trying to use them to pay balances and debts see their accounts fall into arrears and missed payments recoded on their credit files – which can have far reaching effects.

The Financial Ombudsman Service is urging people, especially those facing financial difficulty, to be vigilant and not to be fooled.


There is help out there

Couple having a meeting with a financial advisor

Money worries can be extremely distressing and often it can all feel too much.

These schemes are not the ‘miracle cure’ they purport to be and in fact the effects can be severe. If something sounds too good to be true, it usually is so be wary of these suggestions of ‘help’.

If you find yourself facing money worries or difficulties with repayments;

  • speak to your lender – they are expected to be positive and sympathetic and work with you to find a solution,
  • get support from free debt charities – there are options out there for support. Most will be able to help you speak to your lender, if you are finding this too stressful. You can speak to (amongst others);
  • Give the ombudsman a call – if financial problems or money matters in general are keeping you awake give them a call on 0800 023 4 567 and they’ll see how they can help put things right.


Have you been affected by these ‘solutions’? Let us know in the comments below.

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4 years ago

Scary, but hey, did you not keep a tab on this in the first place

Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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