MBNA - default notice/termination question

[landy_alert]

Hi everyone:)

 

I wonder if anyone can help me with this query please? Apologies as it's a long one!

 

I have a thread already in the MBNA forum and have been trying to read as much as I can on the subject, but seem to be getting rather confused and require some further opinions regarding default notices/termination etc.

 

Mr L has an MBNA credt card which we CCA'd back in Feb and were advised here on the forums that it was probably enforceable by a court, although there was some doubt as to whether the front and back were originally part of the same document. I cannot post it here at the moment as our scanner isn't working, but it does appear in citB's library of MBNA agreements.

 

As Mr L had undergone some severe depression resulting in a suicide attempt a couple of years back we had buried our heads in the sand somewhat and hadn't kept all paperwork sent relating to his cards etc.

 

Just after requesting his CCA , but before it arrived, he received a Default Notice for this card as he had fallen behind with payments due to his ill health etc. Unfortunately we didn't keep the envelope, but the DN was dated 6th Feb (a friday) and the remedy date was the 23rd Feb (a monday). We received the DN on 10th Feb (a tuesday), so it would appear to only allow 13 days for service. The arrears was for just under £1000 (against a balance owed of over £6000).

 

On 5th March Mr L received a Notice of Assignment. This consisted of two lettters in the same envelope - one from Apex stating that the account had been assigned to them and one from MBNA informing him the same.

 

The letter from Apex stated that they had purchased Mr L's account and that as of 18th Feb all rights, interest and claims were assigned to them and that the account became live on 25th Feb.

 

As the account appeared to be enforceable and had both unfair charges and mis-sold PPI, we put in claims for both not expecting them to pay out.

 

Much to our surprise after only 3 letters MBNA refunded all charges plus contractual interest.

 

The PPI claim was rejected and we passed it to the FOS who have recently ruled in Mr L's favour.

 

In the meantime Apex have been chasing Mr L for the full balance on the card (over £6000) and MBNA have confirmed in writing that the account was sold to Apex.

 

We would like to make a F&F offer to settle this debt, but are not sure where we stand regarding the Default Notice, which I believe to be defective as it didn't allow enough days for service.

 

Also the account was obviously terminated following this. Does this mean they are only entitled to the arrears?

 

In addition I'm not sure if the fact that the account was assigned to Apex on the 18th Feb when the DN allowed till the 23rd Feb to remedy is of any bearing - or is it the date it became active (the 25th) the important one?

 

Does any of this mean that we should be looking at offering a lower settlement figure?

 

Has the agreement been unlawfully terminated?

 

Apologies for all the questions, but I'm trying to sort out Mr L's tangled financial situation and this one is really getting the better of me!

 

If anyone can advise me on how to proceed with this I would be very grateful, thank you!

 

Regards,

 

Landy x

[Pinky69]

You do not have to worry about the DN. Apex bought the account on 18 February, only 12 days after the Default Notice had been issued,so 18 February is the date of termination - the account is terminated at the point of sale. Thus MBNA terminated the account before the time required in law - 14 days after receipt of the Notice - to remedy the alleged breach on the account. That is unlawful rescission and all that can be claimed from you is the arrears. However, I wouldn't tell Apex that because DCAs don't always know what the law is. I have had a few rescinded accounts and all I have done is informed them that at the point of sale the account was unlawfully rescinded and no account existed after that date. They haven't asked me for a penny thereafter. Unlawful rescission is also a good reason for getting defaults removed from the CRAs.

 

For your letter, MBNA breached the CCA 1974 S 87(1) by terminating an account before the time required to remedy an alleged breach of account, causing unlawful rescission.

[heliosfa]

You do not have to worry about the DN. Apex bought the account on 18 February, only 12 days after the Default Notice had been issued,so 18 February is the date of termination - the account is terminated at the point of sale. Thus MBNA terminated the account before the time required in law - 14 days after receipt of the Notice - to remedy the alleged breach on the account. That is unlawful rescission and all that can be claimed from you is the arrears. However, I wouldn't tell Apex that because DCAs don't always know what the law is. I have had a few rescinded accounts and all I have done is informed them that at the point of sale the account was unlawfully rescinded and no account existed after that date. They haven't asked me for a penny thereafter. Unlawful rescission is also a good reason for getting defaults removed from the CRAs.

 

For your letter, MBNA breached the CCA 1974 S 87(1) by terminating an account before the time required to remedy an alleged breach of account, causing unlawful rescission.

 

I'd also say that the arrears stated are wrong as they include penalty charges, which MBNA have subsequently refunded - so one shot to hell Default

 

H

[vint1954]

Service would not be deemed until the 10th, so DN is faulty on dates alone.

 

They could possibly argue that the assignment was not effective until the 25th, but if it was assigned on the 18th, that is an act of termination.

 

As Pinky says, write to Apex, stating that you are somewhat bemused that they would buy an account that has been unlawfully rescinded owing to a default notice being issued that was flawed, no need to explain why yet, let them guess ( quoting Pinky's s87 text ), lack of a termination notice and this happened while the account was in dispute.

 

Advise them that they should seek a refund from MBNA and be more careful in the future.

 

If they return it to MBNA, they then have a closed account.

[landy_alert]

Hi Pinky, Helios and Vint:)

 

Thank you all for your comments - this has helped me understand the situation much better!

 

I will do as suggested and contact Apex quoting Pinky's s87 text - however there are still unresolved mis-sold PPI issues relating to this account so I'm not sure if I should go ahead with this now or wait till that is fully resolved?

 

Background info re: PPI -

 

MBNA denied mis-selling, we passed complaint to FOS, they ruled in our favour but MBNA have sent cheque for only half what is owed which we accepted as part settlement and referred the matter back to FOS.

 

We are awaiting further notification/refund.

 

In the light of this, should we wait till the PPI matter is concluded or go ahead and contact Apex regarding the unlawful termination straight away please?

 

The other thing I thought of - Apex are aware that the account is in dispute because of the mis-sold PPI. Should we have told them this - I think I read that if there is a case of unlawfully terminated/rescinded account you should not acknowledge that account at all? Have I made a boo boo by doing this?

 

Further advice would be most appreciated, thank you!

 

Regards,

 

Landy x

[vint1954]

Treat the PPI as a different issue and continue with that.

 

Did you put the account into dispute, following the CCA request?

 

I have had a quick lok at your MBNA agreement. I cannot see that being enforcable, as there are no prescribed terms on the front page. If they are trying to say that the prescribed terms are on the reverse, as posted by you on photobucket, then the printing font is different as are the printing and date codes. Another mock up!

[landy_alert]

Treat the PPI as a different issue and continue with that.

 

Did you put the account into dispute, following the CCA request?

 

I have had a quick lok at your MBNA agreement. I cannot see that being enforcable, as there are no prescribed terms on the front page. If they are trying to say that the prescribed terms are on the reverse, as posted by you on photobucket, then the printing font is different as are the printing and date codes. Another mock up!

 

Hi Vint,

 

Unfortunately I think I shot myself in the foot over this.

 

I'll give a timeline of events so you can see what I mean - I've included dates of all correspondence sent/received and have highlighted in bold the letters I have sent to Apex -

 

21st Jan 2009 - CCA request sent to MBNA

 

6th Feb 2009 - Date of Default Notice

 

10th Feb 2009 - Default Notice received

 

18th Feb 2009 - Account assigned to Apex

 

23rd Feb 2009 - Remedy date on Default Notice

 

24th Feb 2009 - CCA received from MBNA

 

25th Feb 2009 - Account became active with Apex

 

5th Mar 2009 - Notice of Assignment received from Apex/MBNA

 

16th Mar 2009 - Letter received from Apex chasing for repayment

 

23rd Mar 2009 - Request for charges refund sent to MBNA

 

25th Mar 2009 - Letter received from Apex chasing for repayment

 

26th Mar 2009 - Account in Dispute letter sent to Apex

 

30th Mar 2009 - Acknowledgement of request for charges refund received

 

16th Apr 2009 - Goodwill gesture sent from MBNA

 

20th Apr 2009 - We wrote accepting goodwill gesture as part settlement only

 

22nd Apr 2009 - Full refund received

 

3rd Jul 2009 - Letter received from Apex chasing for repayment and threatening litigation

 

3rd Jul 2009 - Account in Dispute letter sent to Apex

 

13th Jul 2009 - Debtor's Notice received from Apex

 

13th Jul 2009 - Account in Dispute letter sent to Apex

 

27th Aug 2009 - Account on hold letter received from Apex

 

I know everyone is going to say that I shouldn't have acknowledged the account to Apex, but I didn't know what else to do.

 

They have assigned their own number to the account, but I have never used this number when corresponding with them.

 

Any further advice would be most appreciated - even if it's to tell me what a complete mess I've made of this:eek:

 

Thank you,

 

Landy x

[landy_alert]

Waves to guest:D

[vint1954]

Hi Vint,

 

Unfortunately I think I shot myself in the foot over this.

 

I'll give a timeline of events so you can see what I mean - I've included dates of all correspondence sent/received and have highlighted in bold the letters I have sent to Apex -

 

21st Jan 2009 - CCA request sent to MBNA

 

6th Feb 2009 - Date of Default Notice

 

10th Feb 2009 - Default Notice received Defective

 

18th Feb 2009 - Account assigned to Apex Should not have been

 

23rd Feb 2009 - Remedy date on Default Notice

 

24th Feb 2009 - CCA received from MBNA Unenforcable

 

25th Feb 2009 - Account became active with Apex

 

5th Mar 2009 - Notice of Assignment received from Apex/MBNA So account now closed with MBNA and cannot be re-activated

 

16th Mar 2009 - Letter received from Apex chasing for repayment

 

23rd Mar 2009 - Request for charges refund sent to MBNA

 

25th Mar 2009 - Letter received from Apex chasing for repayment

 

26th Mar 2009 - Account in Dispute letter sent to Apex Ok as they now own the account

 

30th Mar 2009 - Acknowledgement of request for charges refund received

 

16th Apr 2009 - Goodwill gesture sent from MBNA Now a separate issue as they have closed your account with them

 

20th Apr 2009 - We wrote accepting goodwill gesture as part settlement only Thats ok as this is on a closed account

 

22nd Apr 2009 - Full refund received

 

3rd Jul 2009 - Letter received from Apex chasing for repayment and threatening litigation

 

3rd Jul 2009 - Account in Dispute letter sent to Apex

 

13th Jul 2009 - Debtor's Notice received from Apex

 

13th Jul 2009 - Account in Dispute letter sent to Apex

 

27th Aug 2009 - Account on hold letter received from Apex

 

I know everyone is going to say that I shouldn't have acknowledged the account to Apex, but I didn't know what else to do.

 

They have assigned their own number to the account, but I have never used this number when corresponding with them.

 

Any further advice would be most appreciated - even if it's to tell me what a complete mess I've made of this:eek:

 

Thank you,

 

Landy x

Hi Landy,

 

I don't think that it is as bad as you think. Can you post the letter that you sent to Apex, disputing this account.

 

Next steps need to be:

 

Letter to apex (CCA request ) as you beleive that the agreement is improperly executed.

 

Letter to Apex epanding on the reasons for dispute, no agreement, dodgy default and unlawfully rescinded agreement.

 

Let me know if you need some help with the letter.

 

Vint

[landy_alert]

Hi Vint,

 

Thank you for your continued help with this:D

 

Unfortunately our scanner has had a hissy fit and won't work at the moment. I will try to get it working again, if not I will try to take a decent pic with the digital camera and upload that.

 

Thank you for your offer of help with the letter - I shall probably be ok, but could you just confirm whether you are saying I should send two letters - a CCA request and one expanding on the reasons for the dispute - or just the one letter?

 

Regards,

 

Landy x

[vint1954]

Hi Vint,

 

Thank you for your continued help with this:D

 

Unfortunately our scanner has had a hissy fit and won't work at the moment. I will try to get it working again, if not I will try to take a decent pic with the digital camera and upload that.

 

Thank you for your offer of help with the letter - I shall probably be ok, but could you just confirm whether you are saying I should send two letters - a CCA request and one expanding on the reasons for the dispute - or just the one letter?

 

Regards,

 

Landy x

You could actually roll it into one letter.

[landy_alert]

You could actually roll it into one letter.

 

Hi Vint,

 

Thank you:). Will do - we're away visiting family tomorrow, but will work on it when we get back in the evening.

 

I didn't have any luck with the scanner I'm afraid, but can give you an idea of what the letters said -

 

Letter 1 was a standard Account in Dispute letter -

 

Dear Sir/Madam

 

Thank you for your template letter of ****

 

May I suggest that there is urgent liason between yourselves and MBNA Europe Bank Ltd rgarding this matter. As a result of an ongoing claim regarding mis-sold Payment Protection Insurance and unlawful penalty charges, the account is in clear legal dispute.

 

Any verbal or written contact from your company to myself, I will retain for my files and will take the appropriate legal action for harassment. Please take note at this stage, that any legal action that you may contemplate will be both vigorously defended and contested.

 

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

 

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 register any information in respect of the account with a credit reference agency.

 

I would appreciate your due diligence in this matter.

 

Yours Faithfully

 

Landyalert

 

 

Letters 2 and 3 are the ones I'm more concerned about -

 

They are basically similar in content to letter 1, apart from the fact that I made the fatal error of stating that once the PPI issue was resolved to my satisfaction I would make proposals for repayment of the 'alleged debt' based upon the fact that the CCA sent by MBNA did not comply with CCA 1974:eek:

 

Now you can see why I'm sure I've shot myself in the foot over this!

 

I'm truly grateful to you for assisting me with this and apologise that I'm such a lost cause:(

 

Regards,

 

Landy x

[vint1954]

Hi Landy,

 

I don't think that you have shot yourself in the foot at all. You could have just subsequently found out fresh information.

 

I think to get this back on the right footing, you need to send a letter to Apex. 1st realy saying that the dispute, having sought advice, now largely centres around an improperly executed and unenforcable agreement. Add in that there is a separate claim for PPI, that is being delt with by the OC.

 

I am sure that you have seen it before, but you can adapt some of the text from the letter below.

 

Kind regards

 

Vint

 

xxxxxx 2009.

Dear xxxxxxxxx,

ACCOUNT IN DISPUTE

Re account no xxxxxxxxxxxxxxxxxxxxxxxxxxx

I write regarding recent communication regarding the above account.

Further to my request under the above act, your attention is drawn to the fact that this account is now subject to a serious dispute. On xxxxxxxx, by recorded delivery, I requested that you supply me a copy of the executed credit agreement covering this account pursuant to the Consumer Credit Act 1974 section 78, a copy of this request is enclosed. To date you have failed to comply with my request.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Without production of the said agreement I am unable to assess if I am indeed liable for any alleged debt to you, nor does it give me any chance to evaluate whether any original agreement was ‘properly executed’ as required by the Consumer Credit Act 1974. I have to date only received terms and conditions from yourselves.

Contrary to your assertion, xxxxxxxx have not complied with the terms of CCA 1974 s78. The documents that you have supplied, do not comply with your duties to supply a “True Copy” of any agreement you claim to have been signed by me.

In a recent letter from the enforcement department of the OFT, the text below was quoted, explaining what is required.

“The copy of the executed agreement need not be an exact copy but it must be a ‘true copy’ and not some reconstruction of what the original might have been and it must contain the same terms as the original. Where the terms have been varied as provided for within the agreement, the copy of the original agreement must be accompanied by a document setting out the current terms, as varied. Certain details may be omitted from the original agreement eg the signature but the debtor must be in no doubt as to the true nature of his obligations under the loan.

 

Should no original agreement be in existence it is very hard to say that the copy the creditor offers to the debtor is, in fact, a true copy as there would be no original with which to compare it. In our view the onus of proof would be on the creditor to show that the copy is a true one and where none existed he may have difficulty discharging this. Neither should creditors suggest that a consumer has signed a credit agreement where they are unable to provide evidence to support this — to do so is likely to be a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) and would also constitute an unfair or improper business practice.”

 

I also refer you to the information below.

1. A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

 

 

2. Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

 

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

 

2. The need for prescribed terms to be contained in the credit agreement is confirmed by the Author of the CCA1974 act, I quote ““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.”

I am now granting to you a further 7 days to produce a copy of an executable agreement. After that I will consider that the above matter is closed and that you will no longer pursue the alleged debt. If you are insisting that the non enforceable document, that you have supplied, is the only alleged agreement in your possession, then I would suggest that the best course of action would be to immediately set the balance of the above account number to zero.

I look forward to your response.

[landy_alert]

Hi Vint:)

 

Thank you so much for reassuring me that I haven't totally messed things up - I really do appreciate the time you've taken to help me with this.

 

We've only just got back having been visiting family 3 hours away, so tomorrow I will have a thorough read of the letter you have quoted, spend time going through what I need to say and start putting my letter to Apex together.

 

Kind regards,

 

Landy x

[vint1954]

No problem Landy

[landy_alert]

Hi Vint:)

 

Sorry to be a pain, but I have a quick question if you are about please?

 

In my letter should I still be drawing Apex's attention to the unlawfully rescinded agreement as well as the improperly executed agreement?

 

I also found the following letter by Cerberusalert, which I was wondering if I could also adapt to suit and incorporate into what you have suggested -

Dear Sir/Madam

 

I have had the documentation which was supplied by **** independently analysed and it has been found that the Default Notice is defective on a number of points:

The Default Notice is not dated, although I received it on **** and have retained the envelope, it stipulated that I had to remedy the default by **** and allow 7 days for payment to be credited to the account by ****. This left me with 2 days to remedy the situation not the 14 days as required by the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983.

 

The account was terminated on **** which because of the defective Default Notice, is unlawful rescission of contract.

Failure of a Default Notice or Termination Notice to be accurate not only invalidates such notice (Woodchester Lease Management Services Ltd V Swain & Co NLD 14 July 1998) but it is an unlawful rescission of contract which would not only prevent the court enforcing any alleged debt (Wilson V First County Trust Ltd [2003] UKHL 40, Wilson V Robertsons (London) Ltd [2006] EWCA Civ 1088, Wilson V Pawnbrokers [2005] EWCA Civ 147) - but would also give the claimant a claim for damages in the sum of £1000 (Kpophraror V Woolwich Building Society [1996] 4 All ER 119).

Due to the situation outlined above I suggest that you consider this matter now closed because any further claim made by you will be vigorously defended.

 

Yours etc

 

There are obviously parts of the above I would have to amend to suit, but is some of this possibly usable do you think?

 

Many thanks,

 

Landy x

[vint1954]

Hi Landy,

 

I have not seen an instance yet, where a faulty DN has been used before court. I always trust what Cerberusalert posts. If you can let me have a link to the thread, I will look through it, to ensure that the situations are similar and appropriate and check the outcome.

 

It's a good letter though.

[GeoffreyAlby]

Hi Landy,

 

I have not seen an instance yet, where a faulty DN has been used before court. I always trust what Cerberusalert posts. If you can let me have a link to the thread, I will look through it, to ensure that the situations are similar and appropriate and check the outcome.

 

It's a good letter though.

 

 

I have received a DN from MBNA today quoting an incorrect Account Number. At least this time they got my name and address right , I have had letters sent to my address for other peoples names and accounts in the past. Question , should I tell MBNA that the DN they have sent me has the wrong account number or just let them remain in the dark.

[vint1954]

I have received a DN from MBNA today quoting an incorrect Account Number. At least this time they got my name and address right , I have had letters sent to my address for other peoples names and accounts in the past. Question , should I tell MBNA that the DN they have sent me has the wrong account number or just let them remain in the dark.

No,

 

Bet it was sent 7th sept rectify by 24th and also for the full ballance.

 

Let them keep making the mistakes.

[GeoffreyAlby]

No,

 

Bet it was sent 7th sept rectify by 24th and also for the full ballance.

 

Let them keep making the mistakes.

 

 

Are you Derren? You got it in one. You are exactly right with the dates and the full balance to be paid. Also this was sent a few days after they replied to my CCA request with a photocopy of my original application back in the 90s along with a separate photocopy sheet showing T&C's.

[landy_alert]

Hi Vint:)

 

Here's the link to the thread you asked to see -

 

http://http://www.consumeractiongroup.co.uk/forum/general-debt-issues/215073-how-much-can-they.html

 

I think you'll find the outcome is that the poster is still being pursued unfortunately, but it still might be worth a try:?

 

As you say, Cerberusalert is pretty knowledgeable in these matters and certainly trustworthy!

 

Kind regards,

 

Landy x

Edited February 10, 2010 by landy_alert

[landy_alert]

Blast - it hasn't worked - will have another go!

[gezwee]

Are you Derren? You got it in one. You are exactly right with the dates and the full balance to be paid. Also this was sent a few days after they replied to my CCA request with a photocopy of my original application back in the 90s along with a separate photocopy sheet showing T&C's.

 

Woohoo, I must have been in the same batch, same dates on mine too.

 

Whats the line in there about not issuing any further statements? Thought that was after termination and no longer valid after Oct 2008?

 

Mines for full balance as well.......thought they could only issue DN on the arrears and the full balance wouldnt be in arrears until after termination....messes with my head thinking about it

[cerberusalert]

Blast - it hasn't worked - will have another go!

 

The reason the link isn't working is because the hyperlink has been used twice (HTTP) It should be;

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/215073-how-much-can-they.html

[landy_alert]

Hi Cerberusalert:)

 

Thank you twice - firstly for the link and secondly for providing the letter within it in the first place:D

 

(and apologies as usual for being such a thickie!)

 

Regards,

 

Landy x