“Freemen on the land” sound like outlaws in a fairytale. But rather than stealing from the rich to give to the poor like Robin Hood, this group tries to convince hard-up borrowers they are not legally bound by their mortgage contract.
It may sound far-fetched but the Financial Conduct Authority (FCA) has sounded the alarm over this conspiracy theory as a small but growing number of homeowners are using this argument to try to block repossession proceedings.
“We’re aware of mortgage holders in financial difficulty who are being misled by this online misinformation, often with serious financial consequences,” the FCA says.
The “freemen on the land” movement – sometimes written as “FOTL” or just “freemen” – claims individuals are only bound only by the contracts and laws they consent to, often using arguments dating back to Magna Carta. It is not a new phenomenon but is gaining currency in the UK thanks to social media.
People involved in the movement post information and eviction videos online, including on YouTube. The accounts can have thousands of followers and some videos have been viewed close to half a million times.
Mortgage lenders are reporting a rise in borrowers using these arguments.
The FCA says that some borrowers have paid individuals a fee to take their claims to court to avert their home being repossessed. However it says: “None of these claims have succeeded as they’re not legally valid.
“Other people have ended up losing not just their homes but also a large chunk of their equity.”
On its website the housing charity Shelter has a round up of what it calls a “growing trend ofconspiracy theory litigants”. In one case, a judge dismissed 13 separate claims against various mortgage lenders and expressed concern about an “unseen hand” behind the court documents.
The misinformation is being spread by word of mouth or in help groups on social media sites. “People are using informal channels like Facebook groups to find help and these individuals are in those groups saying: ‘Yes, I can,’” says one expert who did not want to be named.
Greg Sachrajda, the head of department in the FCA’s retail banking directorate, suggests that some people who are at risk of losing their home are “susceptible to arguments that make things sound better”.
But he says: “If you borrow money, you’re required to repay it, and you only make the situation worse by trying to rely on false arguments which the courts are rejecting.
“We’ve seen examples of people not only losing their home but also then getting less back from the proceeds of the sale of the home.”
The same bogus arguments are being used to avoid council tax payments and parking fines. Indeed numerous councils devote sections on their websites to debunking “Freemen” ideas.
Thurrock council, for example, spells out that “rights claimed under common law, are not the same as laws relating to council tax”, adding: “You don’t have a ‘choice’ as to whether you are liable for council tax.”
Do not believe the claims.
If you are struggling to repay your mortgage the short answer is: speak to your lender.
Lenders are required to treat borrowers in financial difficulty fairly and the options available could include extending the term of the loan, temporarily switching to an interest-only mortgage, or even agreeing a payment holiday.
Selling up may turn out to be right thing to do but even then the lender should be able to help. Many lenders offer what is called an “assisted voluntary sale”. This gives the borrower more time to sell the property and the lender can help with the costs. This can maximise the amount of money the individual realises from the sale.
A spokesperson for the lenders’ trade body UK Finance says: “It’s always worth seeking independent legal advice before acting on information you find online as understanding your legal position fully will help protect you from costly mistakes.”
Speak to your council if you are struggling with your council tax bill.
There are other places you can turn to for help with debts.National Debtline,StepChange,Citizens Adviceand the government-backedMoneyHelperservice are among those offering free support.