can you cca request for overdrafts??? / 1st credit chasing debt in IVA

[supasta1]

Hi all, dont want to sound stupid but can you cca request a bank overdraft or is that something completely different??? i've read threads about loans and catalogues etc but not about overdrafts?? a simple yes or no would suffice thank you....

[mrsc]

I don't think that overdrafts are covered by the CCA,but i could be wrong,I am sure someone more in the know will answer the query.

[slick132]

Hi SS1,

You cannot make a CCA request for an o/d in the same way as credit cards, catalogue debts, etc.

You can, however, reclaim unlawful charges that the bank applies to the account.

Slick

[rory32]

Overdrafts have part V (form and content) exemptions from the Act. The copy of the agreement would simply be a letter from the bank stating the amount of credit, the APR, charges and cancellation rights (theirs not yours). There is no requirement for the agreement to be signed by you. So while you can send them a CCA request, as Slick has pointed out, the copy of the agreement would be a lot looser than in other credit agreements.

[Kcat]

Hi,

What about a joint bank account that has 'joint and several Liability' does there have to be some document with both signatures on ?.

[rory32]

No the same rules apply as a normal overdraft facility i.e. the copy of the agreement would just be a letter from the bank. Joint liability just means they can pursue either one of you. There would however need to be a copy of the agreement signed by both of you if for instance it was a loan or a credit card but not for an overdraft.

[Kcat]

Originally Posted by rory32

No the same rules apply as a normal overdraft facility i.e. the copy of the agreement would just be a letter from the bank. Joint liability just means they can pursue either one of you. There would however need to be a copy of the agreement signed by both of you if for instance it was a loan or a credit card but not for an overdraft.

So there's no point in CCA them then for a joint overdraft on an account the dates back to 1987 ?.

[slick132]

Hi Kcat,

There's no point in sending a CCA request because this is a bank a/c (which happens to be overdrawn). The age of the a/c and the fact that it's a joint a/c are irrelevant.

You could reclaim any unlawful penalty chgs applied to the a/c over the last 6 years but you are responsible individually and/or jointly for any debt if the a/c is o/drawn.

[excel1]

Soory for the highjack,
but what about when the overdraft was let to go from say £10000 agreed and in writing to £28550? has some law been broken about responsible lending etc?

[Kcat]

I was under the impression that for an agreement to be 'Joint and Several' it must be signed by both parties. Why wouldn't this apply to an overdraft ?.

The bank account had an agreed overdraft not just an account that has gone overdrawn, does this make a difference ?.

Also I keep reading about an amendment to the CCA in 1990 that refers to Overdrafts as this account was openned in 1987 does this make any difference ?.

Thanks.

[slick132]

Hi Excel,

Surely the responsibility lies with the account holder. If someone spends £28,500 which they don't have, they are borrowing from the bank and will be responsible for paying it back.

I agree that the bank are not lending responsibly, letting an unauthorised o/d rise to 3 times the agreed limit. But it's the accountholder who spent the money and remains responsible for it's repayment.

[timewarp]

Last year Sequenci posted this which appears to confirm that overdrafts are part of CCA, I won a case last year against another bank on separate credit card and overdraft accounts:


"you guys need some section 10 in your lives, overdrafts are running-account credit

10 Running-account credit and fixed-sum credit

(1) For the purposes of this Act—
(a) running-account credit is a facility under a personal [consumer] credit agreement whereby the debtor is enabled to receive from time to time (whether in his own person, or by another person) from the creditor or a third party cash, goods and services (or any of them) to an amount or value such that, taking into account payments made by or to the credit of the debtor, the credit limit (if any) is not at any time exceeded; and
(b) fixed-sum credit is any other facility under a personal [consumer] credit agreement whereby the debtor is enabled to receive credit (whether in one amount or by instalments).



(2) In relation to running-account credit, “credit limit” means, as respects any period, the maximum debit balance which, under the credit agreement, is allowed to stand on the account during that period, disregarding any term of the agreement allowing that maximum to be exceeded merely temporarily.
(3) For the purposes of section 8(2) [paragraph (a) of section 16B(1)], running-account credit shall be taken not to exceed the amount specified in that subsection [paragraph] (“the specified amount”) if—
(a) the credit limit does not exceed the specified amount; or
(b) whether or not there is a credit limit, and if there is, notwithstanding that it exceeds the specified amount,—
(i) the debtor is not enabled to draw at any one time an amount which, so far as (having regard to section 9(4)) it represents credit, exceeds the specified amount, or
(ii) the agreement provides that, if the debit balance rises above a given amount (not exceeding the specified amount), the rate of the total charge for credit increases or any other condition favouring the creditor or his associate comes into operation, or
(iii) at the time the agreement is made it is probable, having regard to the terms of the agreement and any other relevant considerations, that the debit balance will not at any time rise above the specified amount."

[Kcat]

Rory32,
In the original thread by Sequenci (as posted by timewarp above) you go on to agree with this statement. Have things changed?.
Think I'm getting even more confused whether overdrafts are covered or not.

[rory32]

Have things changed?.

No. An overdraft is running account credit but the agreement is different for overdrafts than for other credit agreements. Section 74 of the Act allows for certain types of agreement to be excluded from part V (form and content) where the OFT has so determined. This detemination (the Determination) regarding overdrafts under section 74 was made on 21 December 1989 subject to three conditions.

(a) That the creditor shall have informed in writing the OFT of his general intention to enter into agreements to which the Determination will apply;

(b) that...the debtor shall be informed at the time or before the agreement is concluded
- of the credit limit, if any;
- of the annual rate of interest and charges applicable from the time the agreement is concluded and the conditions under which these may be amended;
- of the procedure for terminating the agreement
and this information shall be confirmed in writing.

(c) that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing no later than 7 days after that 3 month period of the annual rate of interest and charges applicable.

[Kcat]

What about accounts opened before 21 Dec 1989 ?.