Thread: Does it matter when the creditor signs an agreement and do they have to send a copy to the debtor?

Hello All!

As this Thread has grown out from another Thread, I'm just adding some Comments here to explain the background.

Tonka99 had what looked like a well executed Agreement for a Fixed Term Loan with PPI from the MBNA. It looks grim, but then it was spotted that the bankers had Signed and Dated the Agreement before Posting it to Tonka99.

As the Loan was a Cancellable Agreement, this raised some questions about s63 and s64 of the Consumer Credit Act 1974.

The Agreement effectively became Executed the moment Tonka99 Signed it. It was sent via Post, so it was not an Agreement made at a bank or in the presence of a bank employee authorised to Sign.

Below follows where it was spotted that the signature Dates were potentially an issue worth exploring. This Thread can now take things from here...

I also think the Signature Dates is a big issue, and that, along with Charges and PPI reclaim could well come together to make a good Defence/Counter-Claim.

The Signature Dates may be worth holding back on, and then bring them out in your Defence. If I'm right on that, the issue could preclude a Court from Enforcing that Agreement...see the details I outlined in Post #4.

Cheers,
BRW

(Note: this thread was created from posts from http://www.consumeractiongroup.co.uk...oan-m1plg.html and some of the points may relate to that thread)

Similar Threads:

• Creditor - not sent copy of Default notice
• Agreement not signed by Creditor - GE Money - advice needed!!!!
• Who do I send CCA letter to, debt collector agency or debtor?
• How do I get Welcome Finance to send me a copy of my original credit/loan agreement?

BRW

I've had a look at the signature date thingy and I think I don't agree with you

As you point out in post #4, the relevant section is s63 of the CCA 1974

63. Duty to supply copy of executed agreement.
(1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, and on the occasion when he signs it the document becomes an executed agreement, a copy of the executed agreement, and of any other document referred to in it, must be there and then delivered to him.

(2) A copy of the executed agreement, and of any other document referred to in it, must be given to the debtor or hirer within the seven days following the making of the agreement unless—
(a) subsection (1) applies, or

(b) the unexecuted agreement was sent to the debtor or hirer for his signature and, on the occasion of his signing it, the document became an executed agreement.

This identifies 2 cases where a copy does not need to be sent. Both relate to situations where the document becomes an executed agreement at the time when the debtor signs it:

1) when it is presented to the debtor personally and (s)he signs it and it becomes an executed agreement and it is given to her/him there and then. This would be in a shop or during a visit to the debtor's home when (s)he signs it and a representative of the creditor also signs it.

2) when it is sent to the debtor for signature and it becomes an executed agreement at that time. This can only happen if the debtor receives the document already signed by the creditor.

Hello Steven!

Firstly, I think this was not Signed by T99 on site at the MBNA Offices, so I don't think s63(1) applies.

Thus, if the Agreement arrived on T99's dormat via Post, pre-Signed, then when T99 Signed it, then I agree that s63(2b) applies. The Agreement is executed upon T99's signature.

s63

(2)

(b) the unexecuted agreement was sent to the debtor or hirer for his signature and, on the occasion of his signing it, the document became an executed agreement.

However, if this is a Cancellable Agreement, which I think it was, then would not s63(3) apply, in other words, s63(3) over-rules s63(2b) in the case of a Cancellable Agreement. That would seem logical, as the debtor must be given an option to bang out, even after signing, otherwise it can't be Cancellable.

If it's Cancellable, then the Creditor has a Duy to remind the Debtor of those rights after execution. In the case of an Agreement that becomes executed upon the Debtor Signing, then a Copy plus Cancelling Rights can only follow via post, there's no other way if it was signed in their own home having arrived there in the first place via post. The Creditor can't remind the Debtor via Mental Telepathy! They have a Duty, and the only way to discharge that Duty has to be via Post after execution, which was why I'm sure s63(3) was added to the Consumer Credit Act.

T99 had to return it, and the seven day clock was ticking from the date that T99 put pen to paper. The MBNA had just seven days to get the Agreement back, copy it, and send out a copy for T99 along with Cancellation Rights.

s63

(3) In the case of a cancellable agreement, a copy under subsection (2) must be sent by post.

This does seem to say that despite what s63(2b) says, if it was a Cancellable Agreement, then a Copy has to be sent by Post if the MBNA are to be in compliance with s63(3) as well.

If they did not post a copy, then they have not complied with Section 63(3).

If they failed to comply with s63(3) then I think that means the Agreement is not properly executed by virtue of s63(5):

s63

(5)A regulated agreement is not properly executed if the requirements of this section are not observed.

Furthermore, under s64, they have a duty to also send cancellation rights. Specifically:

Duty to give notice of cancellation rights.

64.

(1) In the case of a cancellable agreement, a notice in the prescribed form indicating the right of the debtor or hirer to cancel the agreement, how and when that right is exercisable, and the name and address of a person to whom notice of cancellation may be given,—

(a) must be included in every copy given to the debtor or hirer under section 62 or 63, and

(b) except where section 63(2) applied, must also be sent by post to the debtor or hirer within the seven days following the making of the agreement.

As s63(3) over rules s63(2b) then they had to send cancellation rights within seven days of making the agreement, i.e. seven days from when T99 signed it, as it was pre-signed by the MBNA and executed when T99 put pen to paper. It's their tough luck that the clock started ticking so soon, as they could've avoided that by NOT pre-signing the Agreement. Had they sent out an unsigned Agreement, then the Agreement would remain un-executed even after T99 had signed it, until sent back to the MBNA, and executed when they signed it. Then they could've made a copy and post it, plus cancellation rights back to T99.

But they did not do this! They pre-signed it before T99 even saw it.

I do know why they did it this way, and that was because they were in a mad rush to get these Loans wrapped up to stop people taking a closer look at the PPI Cost. I was offered Marks and Spencers Gift Vouchers if I sent mine back within 7 Days! Why was that I wonder!

The MBNA therefore only had 7 Days from T99's Signature Date to receive the Agreement back from T99, crank out a Copy, add cancellation rights and post these back to T99.

I can't see how they managed that, although it is just about possible if T99 sent it back fast, and they returned a copy with cancellation rights as fast! Most would agree that's pretty unlikely. I know I never received a copy and did not receive any cancellation rights after Signature...and certainly not within seven days of me putting pen to paper (on a pre-Signed Agreement).

If I'm reading this correctly, and I stand to be corrected, as I am no expert, then I think the Agreement is not properly executed by virtue of s63(5), and cannot be Enforced by virtue of s127(4a) and s127(4b), as they failed to comply with section 63(3), and they also failed to comply with s64(1b).

Does that make sense?

I think there is some merit in this, as the MBNA seem very reluctant to press this one home. I suspect they have already been defeated on this, which was why they bent over so fast for Davefirewalker, and why they seem reluctant to stick the dagger in on T99.

I hope this helps, but any help to untangle my thinking would be appreciated. If I am wrong, I would much rather know that for my sake and that of T99.

Thanks in advance Steven!

Cheers,
BRW

BRW

You make some interesting points in posts #35 and #37. It's sent me back to re-read that part of the CCA 1974.

Firstly, s64 says that the right to cancel must be included in every copy and must be sent by post within 7 days except where s63(2) applies - ie where no copy of the agreement needs to be sent for the reasons I listed in post #33.

Secondly, s63(3) is odd! It only applies where s63(2) applies since it says "a copy under subsection (2)" - you could read it as saying "for a cancellable agreement, the copy you have to send under subsection (2) must be sent by post but a copy of a non-cancellable agreement can be sent by carrier pidgeon" - I don't know what its intention is.

s64(1)(b) says the right to cancel must be sent by post within 7 days except in the cases where a copy of the agreement does not need to be sent at all (ie where s63(2) applies).


(ps I wonder whether we ought to take this discussion out of Tonka's thread to a seperate thread - what do you think?)

None sent me copies of the Agreements within 7 Days of the "making" of that agreement, and none sent me any Cancellation details either within that key time limit.

But I think that's because they have interpreted s63(2) as I did - they didn't need to send a copy within 7 days because it became an executed agreement as soon as you signed it as they had signed it already.

What I will do is to move al the relevant posts from post #32 onwards to a new thread in General and lerave a link here

I could be missing the point here, but this argument is only relevant where the agreement is cancellable - in order for that to be the case, s.67 would have to apply;

67.
A regulated agreement may be cancelled by the debtor or hirer in accordance with this Part if the antecedent negotiations included oral representations made when in the presence of the debtor or hirer by an individual acting as, or on behalf of, the
negotiator, unless—
(a)the agreement is secured on land, or is a restricted-use credit agreement to
finance the purchase of land or is an agreement for a bridging loan in
connection with the purchase of land, or
(b)the unexecuted agreement is signed by the debtor or hirer at premises at
which any of the following is carrying on any business (whether on a
permanent or temporary basis)—
(i) the creditor or owner;
(ii) any party to a linked transaction (other than the debtor or hirer or a
relative of his);
(iii) the negotiator in any antecedent negotiations

Where are the antecedent negotiations in the linked thread, exactly?

Originally Posted by banker_rhymes_with

Hello Car2403!

If the agreement was Cancellable, i.e. after Execution, then would that not make it a Cancellable Agreement?

Is s67 therefore applicable in the case of all Agreements than can be Cancelled?

This doesn't seem to tie in with the Loans being looked at, as they did have a period after Exectution when they could be Cancelled.

s67 seems to be saying that certain Agreements can also be Cancelled by it, but I'm not reading that as meaning all agreements that can be Cancelled have to be covered by s67.

Cheers,
BRW

s.67 means if the agreement was signed away from the crditor or his agents premises and with prior negotiations then there should have been a cancellation period applied to the agreement.

I can't see when a cancellable agreement that doesn't meet that criteria wouldn't be cancellable.

Remember though, that if an agreement states it's cancellable, (or has the "your right to cancel" wording on it) it is - regardless of s.67.

It is confusing...

I think you could be confusing the difference in the creditor/debtor dates, (creditor signature pre-dating the debtor) but you shouldn't be thinking in terms of cancellation rights, as it's a prospective agreement that isn't binding under s.59 instead; (and that's easier to get your head around!)

59

.—(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

Originally Posted by banker_rhymes_with

BTW, I do hope Peterbard is OK, as I see he has not posted since February this year.

Me too. I have PM'd him previously, but he hasn't responded. I know he wasn't well, but he did pop back in for a while there.

Peter is one of the CAG CCA experts - I, for one, have learnt an awful lot from Peter and I'm sad he isn't around to help on the more difficult issues, like this one.

Originally Posted by banker_rhymes_with

Turning back to Tonka99's Loan Agreement, does this help Tonka99?

I've had another look at the agreement and yes, it does help. For two reasons.

Firstly, the agreement is prospective so is not binding due to s.59(1). They will argue it was only "prospective" in that it was signed by the creditor prior to the debtor signing - a Judge may take a view that the agreement was executed on signature of the debtor and advance of the funds, but this defeats the purpose of s.59and would be an error in law, IMHO.

Secondly, the agreement states cancellation rights will be communicated. We now know this makes the agreement cancellable regardless of whether it was meant to be or not. We do need to know if the details were sent or not. If not, they will be in trouble.

IMO, if the cancellation rights were on the agreement sent to Tonka to sign, that fulfills the various requirements of ss63-65.

Advice I have received is that s59 is superceded once any agreement is signed - the application form is not void because an agreement based on it has been executed. In fact several card companies use a form which acts as both - it is an application form and it contains the presecribed terms.

Originally Posted by steven4064

IMO, if the cancellation rights were on the agreement sent to Tonka to sign, that fulfills the various requirements of ss63-65.

If the rights were stated on the agreement, I'd agree with that - as it stands though, they aren't, as it states;

YOUR RIGHT TO CANCEL

Once you have signed this agreement, you will have a short time in which you can cancel it. The creditor will send you exact details of how and when you can do this.

If they haven't sent the cancellation details, which provide in evidence to show they did, they'll fall foul of the Act.

Originally Posted by steven4064

Advice I have received is that s59 is superceded once any agreement is signed - the application form is not void because an agreement based on it has been executed. In fact several card companies use a form which acts as both - it is an application form and it contains the presecribed terms.

Agreed - IMHO, the prospective argument only works where you don't take the credit facilities out. The agreement can't be prospective if both parties have acted under it in good faith, which is why I said;

Originally Posted by car2403

They will argue it was only "prospective" in that it was signed by the creditor prior to the debtor signing - a Judge may take a view that the agreement was executed on signature of the debtor and advance of the funds, but this defeats the purpose of s.59 and would be an error in law, IMHO.

Just had a quick look at this thanks to BRW...it is a similar case to the one I am pursuing with MBNA...now taken over by equidebt.

see below for excerpts from the OFT documents "Cancellable Agreements" 2003

In my case as well as the one here MBNA signed first...this made it executed upon the debtors signature.

in this case they MUST send seperate cancellation rights on a completely seperate piece of paper

........................

Cancellable agreements

A regulated consumer credit agreement can be either cancellable or non-cancellable.

Both types are subject to rules as to content, form and copies. A cancellable credit
agreement is one where:

during the negotiations before the agreement is made, a trader (who, in this case, may be the creditor, the credit broker or the supplier) – in the presence of the customer – discusses the prospective agreement or a transaction to be financed by credit provided under it, and the unexecuted agreement (that is the document embodying the prospective
agreement which has not yet been signed by both trader and customer) is signed by the customer off trade premises.


Points to note

For an agreement to be cancellable, discussions about the prospective agreement must take
place in the presence of the customer. If all the negotiations take place over the telephone or
by post, the agreement is not cancellable and the booklet Non-cancellable agreements should be consulted.

Regulated credit agreements secured on land, however, are non-cancellable and different rules apply (see pages 30–31).

Regulated agreements for credit which can be used only to finance the

purchase of land (including bridging loans) are also always non-cancellable.


Non-cancellable agreements treated as cancellable


A trader may choose to give cancellation rights to customers in the case of some agreements which would otherwise be non-cancellable. In such cases, however, the rules relating to the giving of copies of cancellable agreements and the content of those copies should be followed.



Form of separate notice of cancellation rights

The separate notice of cancellation rights – to be sent in cases where a second copy of the agreement does not have to be sent to the customer – must be on a single sheet of paper and in the form appropriate to the type of agreement as set out in Appendix 5.

If the notice is entirely on one side of the paper, the cancellation form must also be on that side. If the notice is continued overleaf that must be indicated by the word ‘/over’ appearing on the front of the sheet after the end of the incomplete text.

APPLICATION TO THE COURT FOR AN ENFORCEMENT ORDER

A cancellable credit agreement or a credit agreement secured on land will be improperly executed unless all the requirements as to form and content of the document embodying it, copies of the document to be given to the customer and (where appropriate) notices of cancellation rights are strictly complied with.

A trader can, however, apply to the court for an order that an improperly executed agreement can be enforced.

The court must dismiss the application if the trader has failed to provide the copies and details of the customer’s cancellation rights which the Act requires.

In other cases the court will dismiss an application only if it considers that to do so would be just, having regard to the extent to which the customer (or anyone else) has been prejudiced by the breach (or breaches) of the requirements and the extent to which the trader was to blame for the breach. In granting an enforcement order, the court can also suspend the operation of any term of the agreement and/or reduce or discharge any sum payable by the customer under the agreement.

///////////////////////

APPENDIX 5

SEPARATE NOTICE OF CANCELLATION RIGHTS TO BE SENT
WHEN A SECOND COPY DOCUMENT IS NOT REQUIRED

Type of agreement Form of notice/cancellation form
1 Agreements, other IMPORTANT – YOU SHOULD READ THIS CAREFULLY
than a hire-purchase
or a conditional sale STATUTORY NOTICE RELATING TO A REGULATED CONSUMER CREDIT
agreement, where the AGREEMENT
credit must be used
to finance a YOUR RIGHT TO CANCEL
transaction between
1 with 2. You have
the customer and You recently made a credit agreement
either the trader or a a right to cancel it if you wish. You can do this by sending or taking a
3. You have FIVE DAYS
supplier who has an WRITTEN notice of cancellation to
arrangement with the starting with the day after you received this notice. You can use the form
trader (eg a retailer provided. accepting payment by credit card)

If you cancel the agreement, any money you have paid [, goods given in
part-exchange (or their value) and property given as security]4 must be
returned to you. You will not have to make any further payment.
[If you already have any goods under the agreement, you should not use
them and should keep them safe. (Legal action may be taken against you if
you do not take proper care of them.) You can wait for them to be collected
from you and you need not hand them over unless you receive a written
request. [If you wish, however, you may return the goods yourself.]5 [You
are warned that it would be dangerous and could be in contravention of
Health and Safety legislation for you to attempt to disconnect and return the
goods yourself.]5]4

[You will not, however, be required to hand back any goods supplied to meet
an emergency or which have already been incorporated, for example in your
home. But you will still be liable to pay for emergency goods or services or
for any goods which have been incorporated by you or one of your
relatives.]4

[Note: Your notice of cancellation will not affect [your contract for life
assurance] [your contract for insurance] [your contract of guarantee] [your
contract to open a current account] [your contract to open a deposit
account].6 [The place where your financial obligations consequent upon
cancellation of this agreement are shown is 7.]8]6


Type of agreement Form of notice/cancellation form

CANCELLATION FORM
(Complete, detach and return this form ONLY IF YOU WISH TO CANCEL
THE AGREEMENT.)
3
To:
I/We* hereby give notice that I/we* wish to cancel agreement
1
Signed
Date
*Delete as appropriate.
Notes:
1 Creditor to insert reference number, code or other identification details.
2 Creditor to enter his name.
3 Creditor to insert name and address of person to whom notice may be
given.
4 Creditor may omit words in square brackets where not applicable.
5 Creditor to include the words in the first set of square brackets unless the
words in the second set of square brackets are applicable, ie in a case
where the subject matter of the agreement is a liquefied petroleum gas
vessel of greater than 150 litres water capacity.
6 Creditor to omit words in square brackets where not applicable.
7 Creditor to insert a clear reference to the place where these obligations
appear.
8 Creditor may include words in square brackets where applicable.


......................... ...................

the formatting of the notice might be "out"...(cant be bothered trying to fix it)

I think that this answers most of the questions raised in this thread.

rgds

Dave

OK, I suspect my blonde moment may be going on for longer than I anticipated, but I'm possibly more confused now than I was when I started reading.

This didn't seem to have an over-riding outcome on whether it's a problem if they signed first?

My interest is because I have two Egg agreements, both looking to have the pt's on them, both signed before me by them.

One of them states that it's cancellable and details will be sent after I sign and return it, one doesn't show anything to do with cancelling.

They also state that it will only be binding on them once they have completed their final checks and I have signed and returned the agreement to them. Surely if they have already signed it, and I then also sign it, it is binding on them?? Could they really turn round if both signatures are there and say 'actually no, we're not going ahead now'?

Thanks,

one very headachy Lexis