A British judge canceled the debts of a couple whose $10,350 loan had grown to $691,200, thanks to a 34.9 percent interest rate.
The Liverpool judge acted after London North Securities took Tony and Michelle Meadows to court for failing to keep up with repayments on their loans, the Times of London reported Friday.
The pair borrowed the money in 1989 to convert a room in their house into a bathroom for their growing family. Late payments, interest and legal costs increased the loan amount from $10,350 to $691,200.
In dismissing the loan company's effort to possess the couple's house and also the entire amount due, he said, "The combination of factors is so potentially exorbitant that it is grossly so and does grossly contravene the ordinary principles of fair dealing."
The decision comes as Britain's Department of Trade and Industry makes it an offense, beginning Monday, to conceal the true cost of a loan in small print.
© Copyright 2004 by United Press International
