Thread: Same old egg- Same old contract

Hello all,

I am new to the site in posting, but have been lurking for a while. My OH too has an Egg contract from 2003 with the "approved limit" as others have with no actual limit on it. There are no T&C's on it either. Now I understand that a majority of people are suggesting that this is not enforcable as the limit is not present. But were they compliant in that they sent an agreement albeit unenforcable.

If this is the case and I meant to sent the NO CCA after 12+2?

I am sorry if this has already been answered, but I am trying to deal with tis and virgin(MBNA- i believe) at the same time and want to ensure that I get everthing in the right order. I want to send the letter off today as I sent the original request out on the 28th of sept 2009 and the 12 working days was over yesterday. Furthermore, does the "further 30 days" start from the original date of asking for the request of the CCA or 30 days from the 12 working days?

Many thanks for your help.

sorry not entirely clear here.
You (or your OH - or both of you?) have Egg agreement(s) with the Approved Limit wording. The thing here - and you can get the full resume on this at http://www.consumeractiongroup.co.uk...ml#post2024413 - is that the CCA requires a creditor MUST state in the credit agreement the rate of interest, AND the repayment arrangements AND either the credit limit (eg £3000) or how the credit limit will be determined (eg "we will determine your credit limit and notify you of this from time to time". Either way of dealing with the credit limit is fine. Egg's problem is that they didnt say "credit limit" but "approved limit" and the argument, which you will find set out in much more detail in the above thread, is that they have missed out the "credit limit" prescribed term and thus, as a result of 127(3) of the CCA, even a court, if it was so minded, CANNOT issue an enforcement notice for an agreement like this - they are stuffed!
Often there are other problems - for instance was there a right to cancel? were default charges specified? However, there are sort of second order failings - the court would still have the discretion to enforce the agreement if it was so minded.
Were they compliant? Yes I suppose they were. Their problem is that what they sent you was NOT compliant - or at least not enforceable.
It might be an idea to scan what you have got from them and post it up here so that you can get opinion on whether it is enforceable (belt and braces), though if it includes the words "Approved limit" you probably have as good a chance as any of us.
If its not enforceable, then its best to send them a "sorry you have sent me a duff CCA" letter. You might adapt this http://www.consumerforums.com/resour...cation-is-sent to your own circumstances. Just dont expect them to curl up and die when they get it. Lots of DCAs out there, and still the question of what happens when the Court case re approved limit comes in (of course they might lose! Lets hope for the best)
Hope this helps

OK, first thing is that you are by no means the first to have had this very letter (or at least parts of it - Egg seem to be working on a kind of menu system - "this one gets response a, d and f. The other one gets a, b and e" sort process).
Re "it is a well established point of law ....." - it is of course no such thing (though I am pretty sure Egg would sincerely like it to be and if the Cardiff case goes wrong it might become one! :?) so ask them for their legal authority on this and be specific - where is approved l limit used in ANY set of regs, or in any legislation relevant here, or approved in an case to go to a court.
What follows really concerns the problems when there is a dispute about whether they have or have not provided you with an executed agreement. Lenders will come up with any old rubbish and try to tell you its an executed agreement (I have had an unsigned and not even dated set of T&Cs).However, with that belief firmly in their minds they will take the view that everything is fine and that they can carry on as normal. When you read OFT guidance one needs to keep this in mind, however erroneous and twisted it might be. Basically they are setting themselves as judge on a dispute to which they are party and the dangers of that are obvious.
So were I you, I would write back to say
1. what is the legal authority for their use of approved limit, as the phrase is used nowhere in the Consumer Credit Act 1974 (its not) or any associated set of Regs issued under the authority of that Act. If they can produce an authoritative precedent to support their position you would be interested to learn of this
2. you remain unsatisfied with the documents they have sent you for the above reason and that therefore the agreement is unenforceable, so you take the view that they should not continue to register defaults on your credit record, nor should they continue with collection activity (in fairness to them the recent RBS case does suggest as it stands that while an account may be unenforceable in law, that does not prevent a lender from trying to enforce by other - I presume legal - means).
Conclude by advising them that no matter what they might assert the document they have sent is not an enforceable agreement and that, as such, the account remains quite clearly in dispute.

so what you are saying is that even though they are saying "regulations" it is just a loads of guff to make me think they are right and I am wrong? The fact is the " approved limit" isn't even a limit as there was no amount on the "agreement" it just said "Approved limit" and they would decided what it would be from time to time, but no actual amount was even on the "agreement".

I am not bothered about them marking the credit ( which I can't stop them doing" but i am not going let them try and press me for money when there is no eforceable CCA.

What is the Cardiff case?

Originally Posted by Jennji

so what you are saying is that even though they are saying "regulations" it is just a loads of guff to make me think they are right and I am wrong? Nope you are absolutely spot on. This is what it is always about - tell them what you need to, hope they believe it and pay up.

The fact is the " approved limit" isn't even a limit as there was no amount on the "agreement" it just said "Approved limit" and they would decided what it would be from time to time, but no actual amount was even on the "agreement". That actually does matter - they dont need to spell out the amount. A lender can get away with something like "a limit that we will decide and notify you about". Where Egg go wrong is by describing this limit as "Approved" and not as a "Credit Limit". The 74 Act and all the Regulations talk about a Credit limit and the argument goes that this means that one of the prescribed terms is absent (the ref to credit limit) and thus under s127 (3) even a court cant order enforcement. The original argument is at http://www.consumeractiongroup.co.uk...ml#post2024413 and it might be an idea for you to have a look at this if you havent done so already (its about 70+ pages now, so give it a bit of time.

I am not bothered about them marking the credit ( which I can't stop them doing" but i am not going let them try and press me for money when there is no eforceable CCA. Have a look at this (though its important to remember that this action is still ongoing) BBC News - Lenders warned not to mislead customers over debts. This is an interesting report. It says about half way down the page that "In particular, the regulator points out that it is perfectly legal and proper for a bank that has lost the original loan agreement, or whose copy is illegible, to supply an accurate "reconstituted" version instead, to show that the agreement did in fact include the information specified by the Act." which is of course perfectly true - faced with a s77 request a lender can produce a true copy and be able to say that they have complied with the request as far as the Act is concerned. But it doesnt go on to make two other crucial things clear - first of all that this doesnt make the agreement legally enforceable and secondly that if the case did go to court, a court would be looking for a legible copy of a signed and compliant agreement. S77 is really only concerned with answering the question "what did we (lender and debtor) agree?". Enforcement at court requires evidence, proof. Otherwise you could have banks popping up and saying "you owe us £x. Here is a true copy of our agreement, though its not signed". The spin the Beeb put on this is interesting - ""It is important to remember that the purpose of these sections is to provide information to consumers, not to provide a method for consumers to avoid paying their debts," the OFT says." Again this is true - s77 was never intended to be a means for anyone to avoid paying their debts. But consider this now famous quote by Francis Bennion who drafted the 1974 Act - he is talking about s127 (3) of the 1974 Act -
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." In other words, Bennion's intention in drafting s127 (3) was precisely that if a lender couldnt be bothered to make sure that fundamental terms such as rate of interest, repayment arrangements and credit limit were properly stated then they SHOULD NOT be able to enforce. End of. Other views of the OFT are interesting given this, in particular that without an enforceable agreement they shouldnt be able to use collection activity (which runs contrary to the McGuffick and RBS case - though I believe it is being appealed).

What is the Cardiff case?

There will be other references in this thread, but you can find a reference to the Cardiff case here (pg 49) http://www.consumeractiongroup.co.uk...s-what-49.html - post 963 by PT2537 who is the "man" on this particular argument re Egg. Might well be a good idea for you to give that thread (and the others that refer off it) a bit of time

So is there some sort of template letter I can send? Or do I need to resend what I already sent to them with a few changes asking them to " State specficially there in any of the act or regulations it states that the used of "approved limit" can be used in place of " credit limit" to any contract. And that is it their legal obilgation to supply me with a contact that states all the prescibed terms as required by law, which would entitle them to enforce any unknowledge debt they beileve may or may not be owed to them.

I am not sure what I should be putting but as they sent me the letter I have also received a letter stating we are behind in payments, so I want to get it straight and right before I send it off.

Any help please would be appreciated.

I dont think there is a template - though I would be happy to be proved wrong. You might want to have a trawl round the other Egg threads and you might find something (or even parts of letters and weld them together).
If you are starting from the beginning, I would start off by posing them the question that if "Approved Limit is a well established point of law, would they mind referring you to the authorities that show this".
On the lodging of adverse information, the current problem is that they will assert the McGuffick decision which says that collection activity is ok even if they dont have an enforceable agreement. However, you can come back with a reference to the OFT guidelines on debt collection which says that they shouldnt (paraggraph 2.8(k)). That would deal with their paragraphs 2 and 3.
This doesnt have to be a long letter.
Dear idiots
I note the assertion in your letter to me of (date) that your use of Approved Limit is a well accepted point of law. I have completed my own exhaustive research on this matter without success, so I would b grateful if you could refer me to the legal authorities on which you base this assertion.
Concerning your continued lodging of adverse information, I believe that this is an Unfair practice under the OFT Guidelines on debt collection and specifically of paragraph 2.8 (k) "not ceasing collection activity whilst investigating a reasonably queried or disputed debt." This account is in dispute and thus it seems clear that collection activity should have ceased, including lodging of adverse information.
This clause also requires you to cease any collection activity until such time as my dispute with you has been resolved, which at the time of writing, it has not.
Have a nice Chrissy

Something like that

right, thanks. Gotta cha. I will put something together this afternoon or tomorrow so I can get these ijjets to see sense. But I doubt this will ever happen. At least I can answer their smugness with a bit of my own.

I appreciate your help and insight.

Ok been doing more reading and actually read more of the of CCA 1974 itself and it doesn't say they HAVE to use the term Credit limit. It just says they need to state the amount and what will be owed. It is not just the opinion of others that say approved limit is not prescribed, when in theory it may still be fine?

Jeez, you sound like Egg. Really you do want to have a look at http://www.consumeractiongroup.co.uk...ml#post2024413. The point is what does Approved Limit mean? Yes it might mean the same as Credit Limit, but how many other things might it mean? Number of transactions in a period? Value of transactions in a period?
PT2537, who is sort of the Godfather of all this, says on this seminal thread, quoting initally from Central Trust Plc V Spurway [2005] CCLR, that HHJ Overend states
24. In my judgment, the passages of Lord Nicholls’ speech cited by Mr Say persuade me that:
(a)The amount of credit must mean credit in its technical sense, and
(b)That although the use of the word “credit” is not prescribed, there should not be any confusion in the mind of the lay reader as to what the amount of credit is
Following HHJ Overend’s view, the agreement should make clear to the consumer, who is likely to be a lay man, what the credit limit is or how it will be determined. It is not possible to say with any certainty that the documents EGG have provided are clear, unambiguous or that a consumer would understand that the approved limit would be their credit limit.
This is currently being tested at the High Court in Cardiff, though PT2537 apparently has succeeded at District Court level with this argument.
In theory it might be fine - but is it fine in law. If you have another look at the Act (and Regulations on how an agreement is to be set out) its VERY prescriptive. Its often not just "tell them about this". Its more "this is the way it should be put" - and just as often not just what is to be made clear and how, but in what order.
Lastly, see if you can get a look at a recent Egg agreement and see if they still refer to Approved Limit. I'll save you the bother - they dont. Could this be because they know they were wrong in using Approved Limit.

Thanks Wjms- I didn't notice I did that....DOH!! I editted it. I do change the odd bits here and there too. And yes, some of the grammar needs a bit of a touch up, but over all not too bad.

I will spend the next day or so getting a letter out as I have so many other things to do than faff about with that lot of idiots.

But thanks again and I will keep an eye out on your and see how your stuff goes.

Ok I am thinking about sending this letter how does it look or should I change a few more bits? I nicked a bit from here and there and I added a pargragh from what you said which I think may help, but not too sure.

Account no: XXXX


Re: My request under the Consumer Credit Act 1974

I do not aknowledge any debt to your company.

Dear Sirs,


I refer to your recent letter. I do not agree that my complaint is settled and I still consider the account to remain in dispute.

On XXXX I wrote to you requesting that you supply me a true copy of the executed credit agreement for this account. You failed in your efforts and only supplied a sub-standard alleged contract which did not comply with the requirements of the Consumer Credit Act 1974.

The document sent purporting to be a credit agreement does not contain all of the prescribed terms as required by section 60(1) Consumer Credit Act 1974. The Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) made under the authority of the “1974 Act” sets out what the prescribed terms are, I refer you to Schedule 6 Column 2 of SI 1983/1553 for the definition of what is required. Suffice to say not all of the terms are present in the document.

You are I think, well aware that the term “approved limit” is not recognised as stating a means by which a credit limit will be arrived at nor does it meet the requirement for you to state the "credit limit” as required by the consumer credit act 1974 (as amended). If your company felt that this “approved limit” was a term which could readily be used within your contracts, I see no reason why your current contracts would not contain the same wordage. Furthermore, whilst YOU feel the term “approved limit” is understandable, I disagree and it could mean anything, from approved limit of transactions, approved limit of values of transactions, approved limit of specific numbers of transactions. Therefore you cannot assume that the person viewing the contract would automatically determine your specific meaning of “approved limit” and therefore leaves the term ambiguous as to its actual meaning. It is your requirement by law to ensure that specific terms are met when executing a contract. Therefore due to the above reasons and others, I feel this account is and will remain in dispute, unless a compliant contract can be supplied.

Further, an agreement which does not contain all of the prescribed terms, or if the terms are mis-stated, then the agreement is unenforceable and a court will be prevented by virtue of s1279(3) from enforcing the agreement. I refer you once again to Wilson V FCT and also to Wilson V Hurstanger as authority for this proposition.

I would also point out that the prescribed terms may not be found in, nor referred to in any other document, nor may they be "lost" within the body of the general terms and conditions of the agreement, rather they must be clearly identifiable in the signature document at the time of signing the agreement.


Moreover, you seem to be attempting to rely on the terms and conditions of a contract which is clearly in dispute, should you continue to pursue me for this debt you will be in breach of the OFT guidelines, and being thus I may report you to them and any other body I see fit. I draw your attention to the Office of Fair Trading’s guidance on debt collection. The OFT guidance which was issued July 2003 (updated December 2006) relating to debt collections and what the OFT considers unfair, I have enclosed an excerpt from page 5 of the guidance which states

2.6 Examples of unfair practices are as follows:

h. Ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment

I require you to produce a compliant copy of my credit agreement to confirm I am liable to you or any organisation, which you represent for this alleged debt, if you cannot do so I require written clarification that this is the case. Should you ignore this request I will report you to the Office of Fair Trading to consider your suitability to hold a credit license in addition to a complaint to Trading Standards, as you will be in breach of the Administration of Justice Act 1970 section 40.

Furthermore you should be aware that a creditor is not permitted to take ANY action against an account whilst it remains in dispute.

The lack of a credit agreement is a very clear dispute and as such the following applies.

* You may not demand any payment on the account, nor am I obliged to offer any payment to you.
* You may not add further interest or any charges to the account.
* You may not pass the account to a third party.
* You may not register any information in respect of the account with any credit reference agency.
* You may not issue a default notice related to the account.



I shall counter-claim that any such action constitutes unlawful harassment. Please note you may also consider this letter as a statutory notice under section 10 of the Data Protection Act to cease processing any data in relation to this account with immediate effect.

This means you must remove all information regarding this account from your own internal records and from my records with any credit reference agencies.

Should you refuse to comply, you must within 21 days provide me with a detailed breakdown of your reasoning behind continuing to process my data.
It is not sufficient to simply state that you have a ‘legal right’. You must outline your reasoning in this matter and state upon which legislation this reasoning depends.

This matter remains a formal complaint, and I may as suggested by you escalate this matter with the Financial Ombudsman.

I would appreciate your due diligence in this matter.

I look forward to hearing from you in writing.

Regards

ok I have changed it a little some comments would be nice if any one has a few minutes...

Account no: XXXX


Re: My request under the Consumer Credit Act 1974

I do not acknowledge any debt to your company.

Dear Sirs,
I refer to your recent letter. I do not agree that my complaint is settled and I still consider the account to remain in dispute.

On XXXX I wrote to you requesting that you supply me a true copy of the executed credit agreement for this account. You failed in your efforts and only supplied a sub-standard alleged contract which did not comply with the requirements of the Consumer Credit Act 1974. The document sent purporting to be a credit agreement does not contain all of the prescribed terms as required by section 60(1) Consumer Credit Act 1974. The Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) made under the authority of the “1974 Act” sets out what the prescribed terms are, I refer you to Schedule 6 Column 2 of SI 1983/1553 for the definition of what is required. Suffice to say not all of the terms are present in the document. I would also point out that the prescribed terms may not be found in, nor referred to in any other document, nor may they be "lost" within the body of the general terms and conditions of the agreement, rather they must be clearly identifiable in the signature document at the time of signing the agreement. Further, an agreement which does not contain all of the prescribed terms, or if the terms are mis-stated, then the agreement is unenforceable and a court will be prevented by virtue of s1279(3) from enforcing the agreement.

Furthermore you should again be made aware that a creditor is not permitted to take any action against an account whilst it remains in dispute. The lack of a credit agreement is a very clear dispute and as such the following applies:-
*You may not demand any payment on the account, nor am I obliged to offer any payment to you.
* You may not add further interest or any charges to the account.
* You may not pass the account to a third party.
* You may not register any information in respect of the account with any credit reference agency.
* You may not issue a default notice related to the account.


You are I think, well aware that the term “approved limit” is not recognised as stating a means by which a credit limit will be arrived at nor does it meet the requirement for you to state the "credit limit” as required by the consumer credit act 1974 (as amended). If your company felt that this “approved limit” was a term which could readily be used within your contracts, I see no reason why your current contracts would not contain the same wordage. Furthermore, whilst you feel the term “approved limit” is understandable, I disagree and it could mean anything, you usage leaves the term ambiguous as to its actual meaning. It is your requirement by law to ensure that specific terms are met when executing a contract. Therefore due to the above reasons and others, I feel this account is and will remain in dispute until a compliant contract can be supplied.



Moreover, you seem to be attempting to rely on the terms and conditions of a contract which is clearly in dispute, should you continue to pursue me for this debt you will be in breach of the OFT guidelines, and being thus I may report you to them and any other body I see fit. I draw your attention to the Office of Fair Trading’s guidance on debt collection. The OFT guidance which was issued July 2003 (updated December 2006) relating to debt collections and what the OFT considers unfair, I have enclosed an excerpt from page 5 of the guidance which states


2.6 Examples of unfair practices are as follows:
h. Ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment

I require you to produce a compliant copy of my credit agreement to confirm I am liable to you or any organisation, which you represent for this alleged debt, if you cannot do so I require written clarification that this is the case. Should you ignore this request I will report you to the Office of Fair Trading to consider your suitability to hold a credit license in addition to a complaint to Trading Standards, as you will be in breach of the Administration of Justice Act 1970 section 40. All communications must be made in writing only. I trust that you will comply with my request forthwith.

I would appreciate your due diligence in this matter.

Regards

sorry for the ignorance but what does "subbing" mean?

One point would be, rather than repeat that Approved Limit wont do - which I assume you did in your original letter - would be to put Egg on the spot and ask them what their specific legal authorities are for asserting that approved limit is ok - eg case law/ where in regulations the phrase approved limit is used etc. They will almost certainly deny being anything other than aware that approved limit is ok - this is their view. To hope to make their paperwork enforceable they have to take this view. It might be interesting to try to put them on the spot and see if they have any basis for this point of view or if its just bluster.

Mandy- *LOL* Oh - thanks.

And SFU- I will Make a few changes and I think it willbe ready to go out monday. They are mean to call today, but I know they won't get through- Global Vantage that is. So we shall see what happens.