The department will handle cases on behalf of property developers and professional landlords against bridging/property finance firms who inflate the size of the debt by increasing the redemption fee and doubling the monthly interest charge when the borrower falls into default.
The specialist legal department has been created as a result of a recent case against a well-known bridging finance company where Credit Issues appointed lawyers reduced a debt by £300,000.
Credit Issues is now continuing to challenge the legality of lenders increasing exit fees and monthly interest rates, in most instances by 100%. It is taking on cases on a genuine no-win, no-fee basis.
The claims management firm is urging brokers who may have arranged bridging/development finance for such clients to refer the enquiry if they have since gone into default and never redeemed the loan on time.
Lee Lipson, legal services director at Credit Issues, says: “In these difficult times borrowers need to challenge this unscrupulous behaviour by lenders. It is also important to make brokers aware of these potential misdemeanours as ultimately it is their clients that may be bearing the brunt of this unacceptable behaviour.
“Brokers need to look at the current market with an open mind and investigate all sectors to ensure that clients are protected and therefore getting the best possible service.
“The perceptions of claims management firms is changing but it remains wise for brokers to complete thorough due diligence checks on claims management companies before entering into any agreement.
“Claims management firms must be regulated by the Ministry of Justice. Any Solicitor used must be regulated by the Solicitors Regulatory Authority and it is vital that they should possess the specialist knowledge required and that firms have high level barristers at their disposal.
“A proven track record and reputation are also crucial combined with a strong, experienced management team and staff.”