Thousands in settlements for farmers mis-sold cheap loans

Farmers have received hundreds of thousands of pounds in settlements following a High Court action over mis-sold finance deals.

A legal claim made by 17 members of the NFU has resulted in the large payout after farm businesses were offered short-term loans and pressured into quickly signing the paperwork without fully understanding the documents.

See also: Common scams – how to protect your farm business against them

The NFU worked alongside law firms Clarke Willmott and Maitland Chambers to support its farming members in bringing a class action against Nationwide Corporate Finance (NCF) and Bluerock Secured Finance.

The farmers claimed they had been victims of negligence and misrepresentation, and also that the companies had breached consumer credit law, which had resulted in some of the farmers’ assets being seized.

NCF had marketed its services through emails and advertisements in the farming press, offering favourable loan rates and “fast farming finance”.

Pressure

Sales representatives from the company reportedly offered farmers interest rates of between 3% and 6%, before then arriving at their farm businesses and putting the claimants under pressure to agree to the terms quickly, before they had time to properly read the agreement.

It later became clear to the claimants that they had actually signed sale-and-leaseback agreements covering their own assets, including livestock, tractors and farm machinery, on unfavourable terms.

The case was first issued in the High Court in 2019 and final settlements were reached in October 2022.

Clarke Willmott argued on behalf of the claimants that the farmers would never have agreed the terms if they had known the full impact of them at the time.

It was also argued that the agreements were worse for the claimants than any legitimate finance on the market, and that the farmers would have been better off selling equipment outright than under the conditions of the lease agreements.

Although NCF and Bluerock did not admit liability, they waived any further claims to the farmers’ equipment.

Advice for similar schemes

Clarke Willmott has warned that other companies continue to operate in a similar way, targeting agricultural businesses with unfavourable finance solutions.

It said the methods of mis-selling were becoming more sophisticated, making it more difficult to bring claims, and advised farmers to seek independent professional advice before signing anything.

Members of the NFU can contact NFU CallFirst on 0370 8458458 to seek legal advice.