- Analysis of cases that have dealt with unauthorised secured loans, setting out the strategies often used, and the consequences for both lenders and borrowers.
Over recent years, a financial industry has operated whereby some businesses lend money secured on people’s homes without authorisation. A recent Court of Appeal case illustrates some of the subterfuges that can be used.
The background
The Financial Services and Markets Act 2000 (FSMA 2000) introduced a scheme of authorisation which was required lawfully to carry out certain financial services activities including, in general terms, granting credit secured on domestic property resulting in a regulated mortgage contract (see the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (RAO 2001), art 61).
The origin of requiring official approval (registration) to grant credit is to be found in the Moneylenders Act 1900. These provisions were replaced by the Moneylenders Act 1927, which provided for a scheme of licensing for moneylenders the grant of which depended on having a certificate
