If you have had an TFS loan or loans both in the past or even that are still running it is well worth checking whether they have been mis-sold. Like many loan guarantor firms TFS have a responsibility to the borrower, regardless as to whether there is a guarantor, to make sure they can afford any loan and these forms of loan are no exception.
Since 2005 when they started lending, the assessment for any lending has been at best scarce leading to financial difficulty and heavy interest and fee charges. Guarantees have been enforced and whilst some lending for whatever reason always goes wrong the amount that has gone wrong has drawn the beady eyes of the Financial Conduct Authority. The FCA having now started an investigation into the firm and its practices.
What is a Guarantor Loan?
Guarantor loans are a very effective product but laced with potential problems. They are a loan facility that is made available to individuals who do not have the required financial standing to obtain the loan themselves. Either due to a poor credit rating or the difficulty of establishing income levels for those whom are self-employed.
This is where a guarantor steps in, either a friend or more often than not a relative who does meet the lending credentials. Any firm like TFS should then conduct a full financial appraisal on the borrower before lending the money, using the guarantor as a last stop in case of default. Sadly that was not the case. The lender normally focused on the guarantor to repay the debt and had little concern for the borrowers financial position.
TFS Compensation Claims and Refunds
Why Can You Look at TFS Loans as Being Mis-sold?
TFS loans like other guarantor loans offered borrowing to clinets poorly, they concentrated on the finances and comfort of those guaranteeing the loan rather than the borrower which they are required to do by the regulator, the FCA. The firm paid little regard to the borrower and their ability to meet the monthly commitment for loans either taken out individually or a succession of loans over time.
There was no assessment of income, expenditure and other financial commitments and in the case of further loans, there was no establishing a pattern of financial hardship before introducing further financial commitment.
How Long have Guarantor Loans Been Around?
Guarantor loans are not a new concept, in fact they have been around since the 1970’s. They were primarily started to allow people to borrow money when there was not the abundance of assets or finance available as there is today.
Finances were a lot different back in the 1970’s, with your bank manager, someone of significant importance in the community, making lending decisions. Personal acquaintance and knowledge was normally the reason for lending, not down to now a days faceless ‘computer says no’.
What Compensation Could I be due?
If you are a borrower or guarantor of an TFS loan with the borrower there is a strong possibility some form of mis-selling could have taken place. If that was the case and mis-selling established we can look at a refund which would include a refund of interest, compensation and in some cases debt reductions. Firms have been recently fined for mis-selling and provisions have been made to cover compensation of this nature of financial mi-sale following the on-going review by the FCA.