Thread: Multiple agreements falling within section 18 CCA 1974

Multiple agreements within section 18 Consumer Credit Act 1974

This is just my view and interpretation of s18 CCA and therefore I would advise anyone reading this bear that in mind

Section 18 can be very useful concerning agreements where there is a main loan and payment protection insurance.

Firstly lets look at what section 18 says

18.Multiple agreements.

—(1) This section applies to an agreement (a “multiple agreement ”) if its terms are such as—

(a)To place a part of it within one category of agreement mentioned in this Act, and another part of it within a different category of agreement so mentioned, or within a category of agreement not so mentioned, or

(b)To place it, or a part of it, within two or more categories of agreement so mentioned.

(2) Where a part of an agreement falls within subsection (1), that part shall be treated for the purposes of this Act as a separate agreement.

Ok so what does this mean, well, lets say you borrow £6000 from Nasty Banking Corp, the loan is for you to use as you like and therefore you would have fixed sum credit See s10 (1)(B) CCA, unrestricted use credit See s11 (2) CCA and finally it would be a debtor-creditor agreement as defined within s13 CCA

Now if you add PPI to the loan, this changes things slightly, why? Well in my view if you borrow £6000 from Nasty Banking Corp and then you add a PPI policy for example adding another £1500 of credit you are turning it into a multiple agreement

The PPI is fixed sum credit as set out in section 10 CCA but it is not unrestricted use, instead its restricted use credit ( See s11 CCA) as you do not have any say over its use, it is in effect only credit for the purchase of the PPI policy and additionally it is a debtor-creditor-supplier agreement as it would be undoubtedly underwritten by another specialist insurer and not the creditor and therefore it falls within the definition given in section 12 CCA

So in effect what we have with the £6000 loan and the £1500 PPI is a multiple agreement with “part of it within one category of agreement mentioned in this Act, and another part of it within a different category of agreement so mentioned, or within a category of agreement not so mentioned”

This is because the £6000 is fixed sum, unrestricted use debtor creditor and the £1500 is fixed sum, restricted use Debtor-creditor-supplier

Therefore since this type of agreement falls within s18, it means that as defined in s18 (2) CCA that the document is to be treated as 2 separate agreements and each agreement must have its own prescribed terms for each part

Therefore each piece of credit must have its own term stating the amount of credit, repayments and all other statutory info, in addition the PPI policy would need to have a term stating the Cash Price of the policy, due to it being a restricted use debtor creditor supplier agreement.

In essence there should be the following

Loan

Amount of Credit £6000
Repayments 60 payments of £XXXXXX
Total amount payable £XXXXXXXX

APR 16.9%



PPI

Amount of credit £1500
Repayments 60 payments of £XXXXXXX
Total amount payable £ XXXXXXXXX

Apr 16.9%

Cash price of policy £1500


the agreement may not be set out exactly as above but that is to give you an idea of what it must contain


If the agreement fails to correctly set matters out in accordance with s18 then the lender risks falling foul of the form and content requirements of section 60 CCA and could be improperly executed as set out within section 61(1) (a) CCA 1974 thus becoming unenforceable

the main thing to remember is that you have two agreement within one document, so there must be a set of prescribed terms for each piece of credit, it is permissible to add the prescribed terms together and then state them as total amounts BUT they must be also stated in their separate parts.

any questions just post on this thread

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subbing - can see this being VERY useful!

Thanks pt2537 for your stirling efforts in making the definitions, wonder why the financial instiutions have not made the distinction themselves - as it probably means any CCA document with PPI attached is unenforceable?

In the case of a running account credit (credit card), where the applicant is asked to sign for acceptance of PPI separately, but within the same signature document as the main CCA agreement, s.18 (as with the fixed sum credit example you made) makes the PPI agreement separate from the application for a credit card.

In the event that a CCA s.78 request is sent,if PPI had been applied for, they also need to include a true copy of a document containing the prescribed terms of the PPI, as well as that for the credit card agreement.

So-

Failure to comply with a CCA request for a copy of the original agreement and their donkey is filleted, and the unfortunate creature is filleted once more if such an agreement included a separate agreement for PPI on the same page?


Sorry to harp on about s.78 requests.


Many application forms have a separate box with something akin to :



Would you like PPI?

yes


no


Sign _________________


Does such a box on the credit card application form suggest that this is a multiple agreement.

Would such a box without the: "This is a credit agreement regulated by the Consumer Credit Act 1974, sign only if you agree to its terms" make the PPI agreement unenforceable?

Originally Posted by pt2537

doesnt it just

Nice work Paul.

The more things we can throw at them, the better.

These greedy banks and C Card companies have cut so many corners when it comes to a maximum profit at any costs business model. Now they're reaping the "rewards" for their own greed and stupidity. They should have listened to their legal debts instead of the marketing depts.

I only have one agreement that lists the PPI interest and payments, etc seperate to the loan amount.
I kept my copy of it from 1998, just a pity that HFC didn't keep their copy safe. oops.

Originally Posted by pt2537

31 .05.2005 the rules changed so the agreement containing the PPI what ever it was for would require a separate box for signing to say you want PPI

and yes it would seem that their donkey is a poor creature cos its gonna get a real royal filleting if that is the case as you outline noomill

What about a Credit Card agreement from 2001 with a Tick for PPI and no explanation as to what it`s for, how it works and what it costs? Like my Lloyds TSB account?

Originally Posted by pt2537

31 .05.2005 the rules changed so the agreement containing the PPI what ever it was for would require a separate box for signing to say you want PPI

and yes it would seem that their donkey is a poor creature cos its gonna get a real royal filleting if that is the case as you outline noomill

PT, does this mean that documents signed before 31.05.2005 not be covered by this.

That poor donkey

Pt

As it's 2 seperate agreements, wouldn't it need a signature for each part too?

(I saw a NW loan agreement on a thread the other day which was set out exactly as you say in post #1 which gives credence that your 'opinion' is correct.

My gf`s CCA for a suite from Brighthouse is like that.

Two seperate signature boxes, one for the main document and one for their cover and protection.

She only signed the main document but she is still paying for the cover as they say she MUST have it because she doesn`t have her own House Insurance.

That means she is being billed for a service she hasn`t agreed to, does it not?

What sort of nonsense is this?


N.P

Birighthouse are the biggest rip off ever when it comes to PPI. All their insurance does is cover Brighthouse and not the person actually paying for it. And they make a massive profit from it too. They charge way over the norm for the goods, add high interest charges, then add useless PPI and interest on top of that, and use the home insurance trick to con you into having it. No home insurance policy pecifically states that it covers HP goods, even though they really do cover your stuff you have repceits for, hp, bough on credit cards, or paid for in cash.

SAR Brighthouse, then follow the usual miss selling PPI the usual way. As soon as you file a court claim, they will cough up.
But beware, as they will try and con you into signing a new agreement for the goods that convieniently forgets about any payments you've already made.

Be hard on them. Follow CAG advice, and take no crap from Brighthouse. Treat them the same they would treat you, if you messed up big style.

Been there, done it, and won on behalf of a workmate, who would have ended up paying £1200 for a fridge freezer that was worth £300 from Argos.

Originally Posted by pt2537

Actually, id be quite pleased at that, the reason is, the insurance becomes a charge for credit as opposed to credit itself, see section 20 CCA and the Total Charge for Credit Regulations 1980

accordingly if its treated as credit then ( and i would really like to see the agreement) id say the agreement may be improperly executed ala Wilson v first county trust

Just been looking to see if I still have a copy of my friends Brighthouse agreement anywhere. Not found one yet, I may have given her all the paperwork back afterwards, but if I do find it, I'll scan it and put in on here for you. From what I remember there was only one signature and the whole lot was on 2 A4 pages.