Firm in £384,000 case collects a list of complaints

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The Independent Online

The "loan-shark" firm that lost its legal claim this week for repayment of £384,000 on an initial loan of £5,750 to a Merseyside couple is being challenged by more customers over spiralling debt.

The "loan-shark" firm that lost its legal claim this week for repayment of £384,000 on an initial loan of £5,750 to a Merseyside couple is being challenged by more customers over spiralling debt.

Similar claims involving at least five other customers have followed Thursday's verdict. The company, London North Securities (LNS), was criticised by Judge Nigel Howarth at Liverpool county court for the "grossly exorbitant" terms of a loan that left Tony and Michelle Meadows with a debt 67 times the original amount.

The new complaints concern the "double whammy" of penalty interest added to late payment penalties. In one case a bill for legal costs and building insurance rose from £700 to £10,000 in 10 years.

These incidents of rapidly rising costs and the resulting threats of home repossession have brought misery to numerous households and are consistent with evidence offered against the company at Liverpool county court. The Consumers' Associationbelieves such practices will soon be eradicated as a result of the ruling and planned changes to consumer credit laws which will penalise lenders for mis-selling loans or failing to check customers' ability to repay the money lent.

LNS was established in Finchley, north London, in 1984 by its director Harvey Collis, although its consumer credit licence, permitting the company to lend to the public, lapsed in May. The Consumers' Association, which has been investigating the company, advises anyone lent money by LNS since May to seek legal advice.

Mr Collis is also director of the LNS subsidiary, Broadwick Financial Services, which has a valid licence. This company was involved in a High Court case two years ago over claims that its interest rate charges of 29 per cent were exorbitant.

The activities of LNS were first highlighted by Gordon Marsden, MP for Blackpool South, after complaints from two constituents, Frank and Jeanette Sharratt, who had borrowed £2,240 in 1987 and discovered two years ago that after repaying £10,000 they still owed more than £39,000.

The retired couple complained they were "hounded" for the debt, including receiving 18 calls in a single day.

Another LNS customer, Michael Weber, borrowed £27,000 to develop a business idea.A year later he wanted to repay the loan in full but was told he owed £42,000 ­ a sum that has since spiralled to £320,000.

Mr Collis declined to comment yesterday.

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