All Credit Card Companies in Default????

[pcr1]

OK... I've been reading through the Consumer Credit Act 1974 here. I'm not sure if I've interpreted this right. I'm sure I must have this wrong - it would put everyone in default if I'm reading this right.

 

It's about credit-token agreements. Now, a credit-token agreement is defined by the Act as follows:

 

14 Credit-token agreements

 

(1) A credit-token is a card, check, voucher, coupon, stamp, form, booklet or other document or thing given to an individual by a person carrying on a consumer credit business, who undertakes—

 

(a) that on the production of it (whether or not some other action is also required) he will supply cash, goods and services (or any of them) on credit, or

 

(b) that where, on the production of it to a third party (whether or not any other action is also required), the third party supplies cash, goods and services (or any of them), he will pay the third party for them (whether or not deducting any discount or commission), in return for payment to him by the individual.

 

 

(2) A credit-token agreement is a regulated agreement for the provision of credit in connection with the use of a credit-token.

 

(3) Without prejudice to the generality of section 9(1), the person who gives to an individual an undertaking falling within subsection (1)(b) shall be taken to provide him with credit drawn on whenever a third party supplies him with cash, goods or services.

 

(4) For the purposes of subsection (1), use of an object to operate a machine provided by the person giving the object or a third party shall be treated as the production of the object to him.

So, credit cards are credit-tokens, right? I can't see how they're not. If so, here's the juicy bit:

 

85 Duty on issue of new credit-tokens

 

(1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it.

 

(2) If the creditor fails to comply with this section—

 

(a) he is not entitled, while the default continues, to enforce the agreement; and

 

(b) if the default continues for one month he commits an offence.

 

 

(3) This section does not apply to a small agreement. [Less than £50]

This is the same requirement as in sections 77(1) and 78(1) whereby you write with the £1 fee, except this onus is on the creditor whenever they send out a new credit-token (other than the first). I've never received a copy of the signed credit agreement with any of my cards!

 

My questions are:

1. Have I got this right? Are all accounts where the cardholder is on their second or subsequent card in default on the creditor's part and therefore unenforceable?
   
2. Does it really matter? Because the default can be rectified by them simply sending out a credit agreement?
   
3. Have all credit card companies committed offences on every single account in doing so?

Am I reading this wrong or has the Act been amended and it's not reflected in this online copy?

[pford]

have a look at this section of the act

 

51 Prohibition of unsolicited credit-tokens

 

(1) It is an offence to give a person a credit-token if he has not asked for it.

 

(2) To comply with subsection (1) a request must be contained in a document signed by the person making the request, unless the credit-token agreement is a small debtor-creditor-supplier agreement.

 

(3) Subsection (1) does not apply to the giving of a credit-token to a person—

 

(a) for use under a credit-token agreement already made, or

 

(b) in renewal or replacement of a credit-token previously accepted by him under a credit-token agreement which continues in force, whether or not varied.

[Mike220359]

I tell you what this could be a right nest of worms. What happens about the credit card cheques that people like Monument send out with a short term lower interest rates, and then cash advance rates when they run out.

 

If they are in default then they won't be able to charge interest at all.

 

I wonder if I should write a letter to the FSA.

 

Mike

[pcr1]

have a look at this section of the act

 

That just means they can't send you a credit card if you haven't applied for one. I don't think they'd want to do that anyway!!

 

If they are in default then they won't be able to charge interest at all.

 

This is the sort of thing I'm thinking. It means all defaults should be removed too.

 

Massive.

[pford]

That just means they can't send you a credit card if you haven't applied for one. I don't think they'd want to do that anyway!!

 

no you missed my point section 3 b of this

 

(b) in renewal or replacement of a credit-token previously accepted by him under a credit-token agreement which continues in force, whether or not varied.

[pcr1]

No I didn't. That means it's not an offence for them to actually send you a new card!

 

However, if they did not include a copy of the signed agreement with that card, they are in default. One month later they commit an offence.

[pford]

Just checking as i got asked to hand mine back to them in 1999 has I couldn’t keep up the repayments settled with then on £20 a month to pay dept off. Last year wife was ill was on sick pay for 3 months no spare cash at all. Next thing we want min payment ever month and we will charge you interest and all the illegal charges again. Managed to stop the interest and charges but they still demanding the min payment ever month. Used to get 3 or 4 calls from them a day. They soon stopped when one of them asked me to borrow money of friends and family to pay them.

 

 

damm now i wish i had that bit on tape

 

issued a cca under 77(1) and 78(1) to them that still stand if it comes under 85(1)

[pcr1]

issued a cca under 77(1) and 78(1) to them that still stand if it comes under 85(1)

 

Yes, the request under 77(1) or 78(1) still stands.

 

However, if they have ever issued a new card on your account (i.e. unless you're still on your first), if they didn't enclose a copy of the executed (i.e. signed) agreement with this then they are already in default before you even sent the request.

 

This means if you've lost a card, or had one stolen, or a card has expired, and they have issued a new one, they are in default if they didn't include a copy of the signed agreement (and we all know they don't - it just comes mounted on a bit of card).

 

If they have subsequently defaulted you, they had no right to, as you had no obligation to make repayments at all as they had no right to enforce the agreement. It also sounds, as Mike220359 has suggested, that they can't even charge interest during this period (as that is part of the agreement).

 

The wording in sections 77(1), 78(1) and 85(1) are identical:

 

77 Duty to give information to debtor under fixed-sum credit agreement

 

(1) The creditor under a regulated agreement for fixed-sum credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

 

78 Duty to give information to debtor under running-account credit agreement

 

(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

 

 

85 Duty on issue of new credit-tokens

 

(1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it.

 

 

 

 

Can anyone clarify this please???

[Mike220359]

To add more to the fire.

 

Think of the number of new cards that were sent out under 'chip & pin'. I had a new one with LLoyds TSB, (I'm going after them in the future by the way)without any sign of the original agreement just notification of the change in terms and conditions.

 

Extending the thought processes further, whilst they are in default and you use the card, they cannot charge interest because you can't make profit from an unlawful act (Common Law). By the same token since you have borrowed with the card I would assume that you are duty bound to pay what you have taken because that may be consituted as theft.

 

Moderaors it may be a good time to add your pennyworth!

 

Mike

[pcr1]

You can legally suspend payment whilst they are in default. Hence why if they have defaulted you, they shouldn't have, because they had no right to enforce the agreement anyway.

 

I'm wondering if this has been repealed. Or maybe just ignored or overlooked? But for 32 years?

[meagain]

I'm sorry, where do you get this idea that you need a signed copy of your agreement for S85? I would assume that "a copy of the executed agreement" would be satisfied by producing a full copy of the terms and conditions. Every time I received a new card, it included a full copy of the terms and conditions, the table of interest rates, and a few other bits and pieces. That is the agreement to which I assented. Again, I would assume that a signature is only required when you are specifically asking for a copy of the agreement under SS77-78. I was under the impression that the law is not generally intended to be interpreted literally.

 

I read this thread with the impression that this is less rights advocacy than it is attempted dodging.

[pcr1]

I'm sorry, where do you get this idea that you need a signed copy of your agreement for S85? I would assume that "a copy of the executed agreement" would be satisfied by producing a full copy of the terms and conditions. Every time I received a new card, it included a full copy of the terms and conditions, the table of interest rates, and a few other bits and pieces. That is the agreement to which I assented. Again, I would assume that a signature is only required when you are specifically asking for a copy of the agreement under SS77-78. I was under the impression that the law is not generally intended to be interpreted literally.

 

I read this thread with the impression that this is less rights advocacy than it is attempted dodging.

 

Executed agreement is defined in the Act as the agreement that has been signed by both parties.

 

As I have demonstrated, it is the same wording as in sections 77(1) and 78(1) whereby they have to produce a copy of the signed agreement on request or the debt becomes unenforceable. If a copy just extends to providing the Ts and Cs, they could get round these requests by just sending a booklet.

 

Nothing about dodging here. I read the CCA and this stood out to me. I still await clarification!!!

[meagain]

Executed agreement is defined in the Act as the agreement that has been signed by both parties.

 

But does it define it as the piece of paper containing the signatures? In my view, "the agreement that has been signed" is just that - the agreement. Anyway, the use of the same wording is irrelevant, since AIUI the law is to be read in context, not literally. In the context of SS77-78, there is doubt over whether or not the person presenting you with the bill has the right to do so, thus they would need to demonstrate assent, which in the case of regulated credit would require them to provide your signature. In the context of S85, there is no such doubt, otherwise there's an offence under S51. The likely intent of S85 is to place a duty on the creditor to ensure the debtor is aware of the continuing terms of the agreement; I doubt the intention was to provide everyone with a signed copy every time a worn-out card is replaced.

 

Ultimately, in civil matters, it's for the parties to a contract to decide whether or not to take action, and if you were to consider this a default and then take action, I doubt a court would look favourably on it.

[Gaz v]

I've experienced a situation with one of my creditors and I was told (over the phone) that since I had defaulted the agreement that my credit card agreement was no longer valid and that they have agree to stop charging me interest for a period of 6 months as long as I agreed to pay a set amount every month. This would be a new agreement etc etc. After 6 months the situation would be reviewed. Anyway 6 months came and I heard nothing so I continued to pay the agreed amount. I then received a statement asking for a minimum payment including interest. I called the company and asked what was going on and was informed that as I hadn't contacted them to renew the agreement after 6 months (let's not forget they said they would review not me.) I had defaulted the agreement and so my previous agreement had been reinstated. After a heated discussion they then set up another agreement for another 6 months and registered another default against my name.

Legal documentation received in the way of agreements apart from my original credit card agreement when I took the card out. Nada zip.

There must be something in the law that state's that they can do this otherwise all these so called agreements aren't worth the paper they’re not written on

[phatram]

What happened?

[The Lantana]

What happened is that people have started using s85 in their defence. Whether quite successfully or not I don't know, but it seems that the mailer enclosed when your card is renewed is not a true copy of the executed agreement.

 

Regards

 

 

Lantana