Help with Court CCJ letter 1st credit *** SETTLED OUT OF COURT ***

[Curlyben]

Gets better and better doesn't it

[pt2537]

well this would be something you would use to discredit the document

[B3rty]

Thanks for your input guys...I will have a little wait as they have asked for 28 day stay in their AQ so I assume any court hearing would be months away.....I would love my day in court and what have I to lose?

I have gathered some useful research info and would need help in preperation but this would be something I would include in my court bundle

© F A R Bennion Website: Francis Bennion -

Doc. No. 2003.061 JPN008L 167 JPN (2003) 773

Any footnotes are shown at the bottom of each page

Consumer Credit Act 1974 s 127(3)

As the draftsman of the Consumer Credit Act 1974 I would like to thank Dr Richard Lawson

for his interesting and well-argued article (30 August 2003) on Wilson v First County Trust

Ltd [2003] UKHL 40, [2003] 4 All ER 97.

Dr Lawson may be interested to know that I included the provision in question (section

127(3)) entirely on my own initiative. It seemed right to me that if the creditor company

couldn’t be bothered to ensure that all the prescribed particulars were accurately included in

the credit agreement it deserved to find it unenforceable, and that the court should not have

power to relieve it from this penalty. Nobody queried this, and it went through Parliament
without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed.

167 Justice of the Peace (2003) 773.

[Edz11]

Peculiar - MBNA were saying that their £25 default charges reflected the actual cost of a late payment (according to the Guardian in 2005). Obviously, the boss of MBNA didn't realise that they were charging £12 instead of £25. Unless, of course, those terms and conditions are the 2007 ones.

They aren't are they??!!

[B3rty]

They have sent me copies of statements which have late charges showing for £25....these are the 2007 terms...

Thanks Edz11

[B3rty]

Press Releases

CREDIT CARD COMPANIES/BANKS MUST MAKE CLEAR THEIR CHARGES AND THE REASONS FOR THEM. NO MORE PROFITS BY DECEPTION

28 October 2004

PRESS RELEASE

CREDIT CARD COMPANIES/BANKS MUST MAKE CLEAR THEIR CHARGES AND THE REASONS FOR THEM. NO MORE PROFITS BY DECEPTION

Local MP Nigel Beard was in the news again this week when the Chief Executives of the major banks (Barclays, Royal Bank of Scotland, HSBC and MBNA) appeared before the Treasury Select Committee to answer questions on their credit cards.

The most controversial issues were the interest they charge and their penalties for late payment and going over the card limit.

“I welcome the fact you have now agreed a standard way of calculating the Annual Percentage Rate of interest (APR) but it’s deceptive isn’t it” said Mr. Beard. “People would assume that two cards offering the same APR would have the same interest charge, but that would be wrong. There are nine different ways of calculating the interest charge and no ‘card’ makes it clear which method is being used. For example, with the same Annual Percentage Rate of interest and identical sets of transactions, the interest charged by MBNA would be at least 50% more than for HSBC which would be slightly lower than Barclaycard.”

The bank bosses defended themselves by saying they would not standardize the interest calculation because that was how they competed with one another. To which Mr. Beard replied:

“How can people choose which card is competitive when you don’t tell them how much interest will be charged and the information they need to calculate it themselves is either hidden in the obscurity of small print or not there at all. You are profiting by deception and we want you to remove the obscurity you seem addicted to and make the charges clear to customers. Rather than making weak excuses you should be saying ‘it’s a fair cop guv: we promise to go straight from now on’. If you won’t do that voluntarily the regulator will have to step in to stop the deception.”

Similar exchanges occurred with other committee members on the penalty charges of the card companies whose legal validity is now being examined as a result of the Committee’s hearings.

Speaking afterwards Mr. Beard said:

“If the Banks and Credit Card companies are to retain public trust in the essential services they offer, they need to adopt the business methods of the Twenty First Century. That means putting the customer first and being clear and open about the scale of their charges and the reason for them. This issue will not go away. The House of Commons Treasury Committee won’t let it and neither will the press judging by this response to our hearing.”

END

Enclosed: ‘TIMES’ leading article, Wednesday 27th October 2004


Copyright 2004 Times Newspapers Limited
The Times (London)

October 27, 2004, Wednesday

SECTION: Home news; 1
LENGTH: 786 words
HEADLINE: Banks make millions from 'unfair' credit card charges
BYLINE: Joe Morgan

BODY:
The big banks have been accused of using bogus accounting practices to cheat millions of credit card customers with late payment and other penalty charges.

The Office of Fair Trading has written to all the main credit-card issuers asking them to explain how they calculate fees for customers who exceed their credit limit or pay late.

They believe that many of the charges may be in breach of consumer contract law.

Banks are likely to have to slash the charges or face prosecution.

Until now banks have stubbornly refused to reveal how much money is made on "late-payment" and "over-limit" credit card fees, despite repeated demands from consumer groups and the Commons Treasury Select Committee.

However, Barclaycard, the leading credit card company, which made profits of £722 million last year, reported that 43 per cent of its operating income was generated from fees and charges.

There is growing anger among consumers at set penalty charges which are out of proportion to the sum owed. Those who forget or fail to pay the fixed minimum monthly percentage, often as little as £5, have ended up with charges of £20.

Mike Naylor, principal researcher at Which?, formerly known as the Consumers' Association, said: "These charges are punitive and do not reflect the costs incurred by the company. Credit card companies are making huge profits from these extremely high charges. Is it any coincidence that most fees are between £20 and £25?"

The Treasury said last night that it had long supported moves to increase transparency and simplicity. John McFall, chairman of the Treasury Select Committee, said that credit card companies had to prove that they had nothing to hide over the charges.

Mr McFall produced a letter that he had received from John Vickers, Director-General of the Office of Fair Trading, in which he questions the veracity of methods used by card companies to calculate such charges.

Legal experts say that under consumer law banks are able to charge customers penalty fees that reflect the cost of the unauthorised borrowing only.

Mr Vickers's letter stated: "We have found that different card issuers use different accounting policies and bases for charging, some of which, on our preliminary analysis, are of questionable validity under the regulations on unfair terms in consumer contracts."

A spokesman for the OFT said it expected the banks to reduce default charges automatically if it found them to be excessive. He added that banks may also have to give consumers clearer information about how the fees are levied.

MPs highlighted how the size of the fees varied between card issuers Nationwide charges a late payment fee of £15 while MBNA charges £25 -and repeated their demand for the committee to be told how much profit they made on the fees.

HSBC was the only card issuer prepared to give an indication of fee-based profits, which industry experts say are worth millions of pounds. "We have shown that 0.2 per cent of our personal banking profits comes from default charges. It is minuscule," Michael Geoghegan, chief executive of HSBC, said.

Banks were asked if a £25 penalty, levied on a borrower who repaid his or her credit card bill five days late, reflected the costs that the card issuer incurred.

Sir Fred Goodwin, chief executive of the Royal Bank of Scotland, said the fees could not be looked at individually and argued that they reflected the annual debt collection costs of pursuing customers who fall into default.

Legal experts say that the charges are unlikely to be enforced by the courts because penalty clauses are legally void unless they reflect the loss that the party enforcing them has suffered.

Richard Colbey, a barrister from Lamb Chambers, said that the banks' willingness to waive card penalty fees as a "goodwill gesture" and their failure to bring a test case through the courts against a debtor who refused to pay the charges were evidence that the fees were unjustifiable.

He said: "Credit card penalty charges are legally unenforce-able because they seek to punish the borrower rather than compensate the bank for any losses that they have suffered as a result of the unauthorised borrowing."

A report by PricewaterhouseCoopers, the accountancy firm, concluded that poorer borrowers with small credit limits were most likely to be punished by penalty charges.

Leading article, page 19

BANK CHARGES

Over limit and late payment fees

MBNA............Pounds25
HSBC............Pounds25
HBOS............Pounds25
Barclaycard.....Pounds20
RBS.............Pounds20
Capital One.....Pounds20
Lloyds TSB......Pounds20
Nationwide......Pounds15

LOAD-DATE: October 27, 2004

[Edz11]

I spotted that one immediately!

[B3rty]

Are the T&Cs prescribed terms?

[car2403]

Originally Posted by Curlyben

Just to add to my comments re terms witin signature doc.
This was covered off in Wilson and another v Hurstanger Ltd [2007] EWCA Civ 299

Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated
consumer credit agreements". Some of this information mirrors the terms prescribed by Sch 6, but some does not. Contrasting
the provisions of the two schedules the Judge said

Originally Posted by pt2537

well, no prescribed terms are a nail in their coffin

The way i would approach this,if firstly to disregard the other documents and look at the scans 7 and 8

now then you have signed the document

but on the other piece which one would assume would be argued by them would be the back of the document, there appears to be a crease on the left bottom of scan 7 however this is not present on scan 8

so we can say its not the front and back i would suggest

now also there needs to be a link to any documents outside of the signature document as far as i know so we would need to look at the scan 7 & 8 to see if there is any reference to any terms and conditions contained within documents outside the sig document

so bearing this in mind i feel there is a strong case to argue that this fails to comply with the CCA 1974

Originally Posted by car2403

This looks enforceable to me, B3rty.

They are asking for an enforcement order to cover the possibility the judge will disagree, which is unlikely.

Prescribed terms are credit limit, payments and interest rates.

You can argue it's improperly executed because of the missing creditor signature, but s.127(3) only works if the debtor hasn't signed the agreement - you would need to show prejudice (unlawfully Defaulted, for example) to get that argument to stand up under s.127(1).

The prescribed terms are credit limit, payments and interest rates;

• Credit limit; "we will choose your credit limit and tell you what it is", Term 1 in Scan10007.jpg
• Payments; "the minimum payment you must make will be shown on your monthly statement", Term 1d in Scan1007.jpg
• Interest rates; "in working out the APR...", Term 1g in Scan1007.jpg

The prescribed terms are there, so you should argue as mentioned about the actual layout of the document - whether these terms are in the signature document is a matter of fact which the Judge will decide. There's a danger here that it COULD be seen as enforceable, or, (if you can't show prejudice) it is improperly executed and the Court will allow enforcement by Order. What is your "in the alternative" argument going to be if this happens, regardless of your submissions regarding the structure of the signature document?

Have they Defaulted you?

[pt2537]

Hi Chris,

See what your aiming at but there is a clear crease in the photo copy on scan seven but this is not apparent on scan 8 so i would be looking at that and drawing the judges attention to this

[B3rty]

I had a letter arrive on Saturday basically saying because it would cost a substantial amount to take this to court and that in the small claims court the costs were irrecoverable they would like to offer me a chance to make a reduced settlement in one lump sum or they may be willing to consider payment by instalments.

[B3rty]

Hi All

Any thoughts on my next step as I am quite confident to go to court and argue the case for 127(3) I have looked up all the relevant aspects from the CCA along with additional info regarding Wilson and Bennion’s quote’s however my understanding is the debt still stands, so their offer of the settlement could be something I could use to my advantage and I don’t want to miss out on that

I can’t pay a lump sum but could squeeze about 10% of the debt paid over 12 months by reducing down the term of one of my life assurance policies

My dilemma is they have written with an offer of reduced settlement and if it goes to court I don’t want to do anything that they could use to influence the judge i.e. if I don’t respond they could say they have tried to compromise but I haven’t co-operated or if I offer a monthly payment which they then refuse they could say I acknowledge the debt but have only made token payments when I could have made higher ones……all I am thinking about is a smart lawyer using irrelevant facts to present a case should the judge feel the agreement is OK.

My instincts are to write a letter to confirm I don’t have sufficient funds and that I am confident I can argue a case for 127(3) plus have a counter argument based on the non production of the default notice for when it goes to court.

Your comments would be appreciated

Berty

[pt2537]

Hi Berty

Now then,

if you are considering making an offer, you could always go down the "Without prejudice" route which would mean they cannot show it in court, however you cannot rely upon such a letter either.

it may be prudent to make them an offer,highlighting that you have a strong case with the 127(3),Wilson -V- FCT ,Wilson and Another -V- Hurstranger arguements they may consider it,

that ultimatley is up to you if you want to try that

the letter you received on saturday seems to me that they have realised they dont have as stronger case as they would like so they are trying to settle

i hope this helps

regards

paul