A 70-year-old man (the Defendant) living in retirement accommodation had entered into two successive fixed sum loan agreements with Swift Advances plc (the Claimant), both of which were secured by a second charge on his home and were regulated by the Consumer Credit Act 1974 (CCA). Before entering into each agreement, the Defendant represented that he was working and that he would continue to do so past retirement age. The Defendant had no such job. Under the second agreement, the loan was repayable in equal monthly instalments over a period of 180 months. This meant that the Defendant would be 85 years old before he had paid off the loan. The Defendant fell into arrears and the Claimant commenced possession proceedings. The Defendant argued that, bearing in mind his age and the term of the loan, he was never likely to have been able to sustain the loan over its full term. Consequently, the Defendant asserted that there was an unfair relationship arising out of the loan agreement contrary to section 140A of the CCA. The court ruled for the Claimant, saying:
- the defendant’s mendacity was a relevant consideration for the purposes of section 140A. The court is required to look at the whole of the transaction from the point of view of both the debtor and the creditor before determining whether the relationship is unfair;
- the Claimant’s practice and experience in dealing with elderly borrowers was relevant in judging whether or not it had acted unfairly. The claimant’s policies and procedures took into account the risks of lending to the elderly; and
- the Claimant’s actions were not to be judged by guidance or standards of behaviour that came into force after the loans were agreed. The evidence was that the Claimant was operating in accordance with the then existing guidance and there was consequently no reason for condemning the relationship as unfair.