Discuss about the Types of Problem Case of Esther Osei.
Relevant essay mainly states the problems that were faced by Esther Osei, while repairing a loan of £6,000. The essay directly state the different types of problems that could be faced by an individual of adequate agreement review are not conducted by the loan taken. The case of Esther Osei is a good example, where individuals should adequately check the loan documents before taking any kind of decisions. Relevant cases of frauds also discussed in the essay, which help in highlighting the unethical measures used by loan companies to increase the interest rate. Lastly, the overall evaluation of the Esther Osei case is been conducted. The overall AC also helps in identifying the relevant issues from the case study which could directly help future loan receiver to make adequate decisions. These issues identified from the case could eventually reduce the high interest rate loan Agreement that was conducted by loan providers.
The overall debt of £6,000 directly grew to £116,000 due to the negligence of Esther Osei in conducting relevant agreement with Broadwick Financial Services. Firstly, Esther Osei Mili borrowed the loan of £6,000 only because of the need for her father's funeral and to buy a cooker for her Clayton home (News 2017). However, there were relevant repayment issues that could be seen from the situation. The overall debt of Esther Osei was out of control due to the high end interest rates claimed by Broadwick Financial Services. Esther Osei mainly stated that loan providing agent came to her and directly provided the loan, where Esther Osei did not even look at the agreement and took the money for a father's funeral. this decision is mainly considered by Esther Osei one of the worst of its kind, which directly altered her future life. There were many instances where Esther Osei had complaint in court regarding the problems faced by the finance providing company (Chapman and Lounkaew 2015).
In addition, there two to three instances where both Broadwick Financial Services and Esther Osei faced in court due to the non payment of loan instalments. there was a certain system used by Broadwick Financial Services, missing out of instalment payments could directly impose more Surcharges and penalties on to the loan amount. This directly increased the loan amount exponential. Moreover, the non payment of interest was also being charged as an interest to the borrower. This directly increased the overall debt of £6,000 to astonishing £116,000 in 18 years. Moreover, it was claimed by Esther Osei that interest rates on the loan was not disclosed adequately to her while discussing for the alone requirement (Moss et al. 2015). This non disclosure of interest rates is relatively problematic in nature, where individuals are not able to identify the actual amount that needs to be paid for the borrowed amount. This mainly increased void in repayment instalments, which directly increased the loan amount of Esther Osei.
Esther Osei after seeing the loan amount raised to £116,000 approached North Manchester Law Centre for a settlement. this mainly included irrelevant hearings and discussions with the loan provider, where a deal was cut between Broadwick Financial Services and Esther Osei.This deal when he stated that loan amount could be reduced from £116,000 to the amount offer of the house and an additional £5,000. This mainly helped Esther Osei for reducing the loan amount substantially with the help of North Manchester Law Centre (Schiantarelli, Stacchini and Strahan 2016).
The main issue that could be identified from the evaluation of Esther Osei Case is identified as below.
Negligence in part of loan receiver:
The main issue that could be identified from the case is the negligence that was conducted on part of the loan receiver. Due to personal problems and financial need drove Esther Ose to neglect the overall reading of loan agreement, where the loan provider has increased overall interest rates and provided certain clause in the agreement. This negligence on the part of Esther Ose mainly hampered her future existence in UK, as in the current scenario she needs to sell her house and pay the loan amount to the financing company. O’Neill, Dhareshwar and Muralidhar (2017) stated that relevant news has been circulating all over the world where loan providers manipulate the loan Agreement to increase the interest rates and the profitability. This negligence on the part of loan received as directly increased the loan amount from £6,000 to £116,000. Moreover, the loan receiver also neglected the fact that major legal actions could be taken by the loan provider as legal documents have been in there custody. Currently, Esther Ose reached out to North Manchester Law Centre, which helps in reducing the overall loan payments from £116,000 to the amount offer house and an additional £5,000. This overall settlement of the loan could have been done way before than 18 years, which could have reduced the overall loan payments of Esther Ose and saved her house.
Lack of information clarity by loan provider:
The second issue that was identified from the case study was mainly the Lack of clarity that was provided by the loan provider. There was an agent of Broadwick Financial Services, who seeing the opportunity of getting a loan borrower directly pitched her the loan process. However, the agent of Broadwick Financial Services was not clearly mentioning about all the requirements in the loan process, which included the high interest rate imposed on that loan. Even the spokesperson of North Manchester Law Centre claimed that Esther Osei Should have read the loan Agreement before signing up, as the interest rate was drastically higher than normal rates. This forced Esther Osei to miss out loan repayment, which accumulated in time and came to an astonishing amount of £116,000 after 18 years. Therefore, from the evaluation of the case study it could be understood that loan providers are conducting business, where each and every document needs to be read before entering into any kind of agreement. The Bureau of Investigative Journalism (2017) stated that payday loans have astonishing interest rate of 7000 percent on most of the loans provided to the customer. This mainly indicates that loan providers are not providing all the relevant information regarding the loan agreement to the loan receiver (Bozick and Estacion 2014).
Actions taken by finance providing company:
There were different types of actions that were taken by the finance providing company, among which there was no ethical actions taken by Broadwick Financial Services. The company did not ask its financial advisor regarding the steps taken in providing all the relevant information regarding interest rates to Esther Osei. This action mainly states that the company knew about the interest rates and wrongly charged its loan borrowers. In a Press interview North Manchester Law Centre urged loan borrowers of Broadwick Financial Services to look into the interest rates that have been charged by the organisation (Zhang, Tsao and Chen 2014). This mainly states that the organisation is well known for its unethical measures in hiding the interest rates in the loan agreements. The second action that was taken by Broadwick Financial Services was requirement for the payment of £116,000 from Esther Osei with a weekly payment of £75. This will mainly take Esther Osei around 242 years to pay the overall loan amount. There is no consideration conducted on the part of Broadwick Financial Services, where it directly claimed the house of Esther Osei.
Long time taken to provide relevant decisions:
The last issue that was found from the case of Esther Osei and Broadwick Financial Services was the overall time taken for an adequate decision. The decision taken by Esther Osei and Broadwick Financial Services mainly came after 18 years, which directly increase the overall interest on loan amount, which in turn raise the loan instalment. There were many instances where Esther Osei was not able to pay the instalment amount, where relevant actions needed to be taken by the financing company. However, in the 18 years there was some hearing involved, which resulted is no adequate action. This mainly forced Esther Osei to approach North Manchester Law Centre Follow settlement, which could help in reducing the excessive loan amount which was accumulated in 18 years. The decision of settlement could have been conducted by Esther Osei much sooner, which could help in saving her house. Mann (2015) mentioned that relevant court actions are taken on loan providers who increase the interest rates without noticing the loan receivers. Therefore, it was relatively high time for Esther Osei to make the adequate decision and reduce the loan amount from £116,000 to the amount offer of the house and an additional £5,000.
Recommendation for Loan receivers
After the evaluation of the case study, there are relevant actions that need to be taken by loan receivers before signing into any loan Agreement. The overall interest rates that is imposed by the loan provider needs to be identified which is essential for detecting the actual loan repayments conducted by the individual. However, in case of Esther Osei the interest rate rules to 30% and a total interest rate of 18 years was around 102%. This mainly states that identifying the actual interest rates is compulsory for all the loan receivers. The second measures that needs to be used by the loan receiver is the determination of actual interest payment that is conducted after the repayment of loan. This could eventually help in identifying the minimum instalment payments that needs to be conducted by loan receivers (Cornelius and Frank 2015). The third measure that needs to be taken by the loan receivers is the charges and surcharges that is imposed if any instalment as missed out. The determination of the charges for instalment miss out would eventually help in identifying the extra penalties that needs to be conducted when loan instalments are not paid. This could eventually help in reducing the unethical measures that could be taken by loan providers
Evaluation of the overall case study mainly helps in identifying the Actual problems that is faced by individuals taking loan from loan providers. The fine lines used in the agreement directly helps in identifying the relevant unethical measures that is taken by loan providers. There have been several cases in USA and UK, which could directly help in identifying the problems related to debt accumulation. Therefore, the case of Esther Osei directly depicts the relevant problems that are faced by individual taking loans without reading the fine lines in the agreement. The loan of £6,000 in 18 years grew to £116,000, which only indicates that relevant interest rates were not disclosed to the individual, Therefore, it is advisable to evaluate the loan Agreement before signing, as it might help in identifying any kind of unethical measures taken by the loan provider.
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