Don Leocornay Vs HSBC

[rory32]

Two threads merged

[don leocornay]

excellent! thanks!

 

Now, how do I deal with these 'people'. They're puffing their chest out like the big bullies they are. I just want my money back!

[don leocornay]

Here's my solicitor's letter. She's asking me to review it before sending it out. I personally think it's a bit soft as it does reference any laws. The post after this will include my updates so far. tell me what you think guys;

 

WITHOUT PREJUDICE

Dear Sirs

Mr Don Leocornay

We write further to our letter dated 06 November 2007 to which we have not received a response.

We confirm that we are instructed to act for Don Leocornay in relation to his complaint connected to his managed loan.

Background to the complaint

In 2003 our client was approved for an HSBC Gold Credit Card. Unfortunately our client exceeded the limit of this card by some £1,000. HSBC, therefore, demanded full payment of the balance of his credit card. Despite explaining to HSBC that he was not able to meet such a demand and continuing to pay the minimum payment each month our client was continually hounded to make a payment in full. Our client would receive phone calls at various times of the day approximately every 2 – 4 days between the hours of 8.00am and 8.00pm.

Eventually, after making several requests for help from, HSBC to come to a resolution, our client was told that his only option was to enter into a Managed Loan. Our client was told that this was a type of consolidated loan with a lower monthly repayment. This was the only information provided to our client in relation to the loan and he was told that the alternative was a threat of court action.

In or around September 2004 our client finally accepted the offer of a Managed Loan on the basis that he was advised that he had no other option. This was done over the telephone and our client considered that the simple fact that he had acknowledged that he would enter into such a loan was sufficient for him to be bound by it. No written loan agreement followed by post for our client to read, consider and sign. For the avoidance of doubt he was also not asked to attend one of HSBC’s branches to sign the required loan agreement. HSBC then began to take the sum of £157.00 per month in payment of the Managed Loan.

Later in 2004 our client arranged to set up an internet banking service. It was only at this stage that he noticed that for every payment of £157.00 that he was charged a further sum of £100.00 as interest. Our client considered that this was an unusually high interest payment and made enquires of HSBC asking what his APR was and when he might expect to pay off the loan. He discovered that his APR was 14% and was told he would make his final loan payment in or around 2012/2013. Our client complained at this stage that this was not acceptable to him and that had he been provided with this information at the start of his loan he would not have agreed to enter into it. HSBC told our client that there was nothing he could do and that he was tied into the agreement. As a lay person our client accepted that this was a true representation of his rights and continued to meet his monthly payments.

Earlier this year our client became aware of the Consumer Credit Act and, bearing in mind the circumstances in which he was induced in to the loan, considered that the loan may in fact be unenforceable. In particular our client became aware that he should have been sent a written copy of the agreement which would only become enforceable once he signed it.

Your handling of the Complaint.

Our client has corresponded with his Branch Manager and HSBC’s Complaints Department. He has repeatedly denied that he signed any loan agreement in connection with the managed loan. He has requested sight of the signed loan agreement and HSBC have failed to provide this to him. Further HSBC have relied upon the presentation of a “true copy” of the agreement to enforce the loan.

Our client continues to dispute that that he signed any written agreement in relation to the managed loan and, therefore, maintains that the loan is unenforceable.

Request for further information

Please now provide a copy of the loan document which bears his signature and thereby makes the agreement valid and enforceable. In addition please provide any corroborating documentation to show how and when the loan agreement was sent to our client for signature e.g. covering letter and when it was returned from our client signed.

Further please provide screen print outs from your computer records detailing the phone calls made by HSBC to our client from the time that he exceeded his Gold Credit Card limit to the current day.

In addition we require confirmation as to whether telephone conversations made by HSBC to our client were recorded and if so please provide copies and/or transcripts of any such recordings.

As set out above our client disputes that there is an enforceable loan agreement in place between HSBC and him. In the alternative it is disputed that the full sums claimed under the loan are legally recoverable. Any attempt to enforce full recovery of the debt will be disputed if necessary via Court proceedings.

Further should we fail to receive a satisfactory response to this letter we are instructed to progress this complaint to the Financial Ombudsmen’s Service.

We look forward to hearing from you by return.

Yours faithfully

Don's Lawyer

[car2403]

The first thing I would say about this letter is that it must state;

 

"I do not acknowledge any debt to your company"

 

Without this statement, what you're effectively doing is acknowledging the debt which can cause you problems later on.

 

I too feel it is too soft, this should be a LBA so needs to outline;

- Your complaint, by referring to previous correspondance with dates and answers to responses you've had already.

- Outlining your reasoning for disagreeing with their interpretation of events and details of those disagreements. It's also good to outline any areas you actual agree on, as the Court will like to see this and is good evidence in your favour.

- Provide legal authority for your argument, along with full citations to Acts, Regulations or Cases up on which you are basing your argument.

 

I mean no disrespect to your Solicitor at all - I'm sure they are offering the best advice they can based on what they've been informed - but if you intend to take legal proceedings to seek enforcement of your rights this must be a given in your response.

 

The letter is also "without prejudice" so cannot be submitted to a Court as evidence as it has no legal effect whatsoever.

[don leocornay]

Those were my thoughts:

 

a/ Don't need to go into the history, it doesn't mean anything. The fact is HSBC are enforcing a loan that they're not allowed to. Everything else is irrelevant.

b/ List complaints with regulatory facts to back it up.

 

Will be back with my own version. I just need the solicitor to add weight. A bit disappointing that I have to re-draft their letter!

[hsbcfiddled]

I too agree it is soft- time for hard ball!

Good luck Don

[Docman]

Don

 

I wouldn't send this from anyone in its present form. At the moment, the bank are unable to provide a signed agreement that contains all the prescribed terms. However, I think I'm right in saying (and please anyone else correct me if I am wrong) that if you acknowledge or sign another document that contains the prescribed terms, then such a document is binding.

 

This letter does state the rate of interest, the monthly repayments and the length of time to repay. I also assume your solicitors will sign it on your behalf. I know I'm stretching matters but you could be handing the bank an argument against an otherwise solid defence. I wouldn't provide such details in the letter.

[don leocornay]

Thanks Doc.

 

That's why I was against going into so much detail.

 

Instead of saying 'Making Repayments' I'd say the bank has been taking money.

 

Instead of 'the loan was set up', it's 'the bank placed funds in my account' because in essence because the loan is unenforceable that's what they've done. They've put money in, without my approval, they've taken money out, without my approval. When their attempt to take my money failed, they've applied a charge thereby taking more money without my consent.

[car2403]

I just would say anything that is mentioned in this letter - the LBA is simply a recap of your case, with legal authority for it, and a warning that further unsatisfactory responses or no response at all will result in legal proceedings being issued.

 

This letter shouldn't be complicated at this stage - and you don't want to give too much away, allowing them to create a Defence, at this stage.

[don leocornay]

Ok so how about this?

 

(WITHOUT PREJUDICE)

Dear Sirs

Mr Don Leocornay

We write further to our letter dated 06 November 2007 to which we have not received a response.

He does not acknowledge any debt to your company and has instructed us to act on his behalf in relation to his complaint connected to managed loan account _______.

Background to the complaint

In 2003 our client was approved for an HSBC Gold Credit Card. Unfortunately our client exceeded the limit of this card by some £1,000. HSBC, therefore, demanded full payment of the balance of his credit card. Despite explaining to HSBC that he was not able to meet such a demand and continuing to pay the minimum payment each month our client was continually hounded to make a payment in full. Our client would receive phone calls at various times of the day approximately every 2 – 4 days between the hours of 8.00am and 8.00pm.

Eventually, after making several requests for help from, HSBC to come to a resolution, our client was told that his only option was to enter into a Managed Loan, whereby his Credit Card, Overdraft and a Graduate Loan would be consolidated into one loan. Our client was also told that this was a type of consolidated loan with a lower monthly repayment. This was the only information provided to our client in relation to the loan and he was told that the alternative was a threat of court action.

In or around September 2004 our client finally accepted the offer of a Managed Loan on the basis that he was advised that he had no other option and did not want to be taken to court. This was done over the telephone and our client considered that the simple fact that he had acknowledged that he would enter into such a loan was sufficient for him to be bound by it. No written loan agreement followed by post for our client to read, consider and sign. For the avoidance of doubt he was also not asked to attend one of HSBC’s branches to sign the required loan agreement. HSBC then began to take the sum of £157.00 per month out of his current account.

Later in 2004 our client arranged to set up an internet banking service. It was only at this stage that he noticed that for every payment of £157.00 that he was charged a further sum of £100.00 as interest. Our client considered that this was an unusually high interest payment and made enquires of HSBC asking what his APR was and when he might expect to pay off the loan. He discovered that his APR was approximately 14% and was told he would make his final loan payment in or around 2012/2013. Our client complained at this stage that this was not acceptable to him and that had he been provided with this information at the start of his loan he would not have agreed to enter into it. HSBC told our client that there was nothing he could do and that he was tied into the agreement. As a lay person our client accepted that this was a true representation of his rights and continued to meet his monthly payments.

Earlier this year our client became aware of the Consumer Credit Act and, bearing in mind the circumstances in which he was induced in to the loan, considered that the loan may in fact be unenforceable (in particular under sections 61, 65 and 127). In particular our client became aware that he should have been sent a written copy of the agreement which would only become enforceable once he signed it. (Subject to the Consumer Protection (Distance Selling) Regulations 2000.)

Your handling of the Complaint.

From March 2007 to present, our client has corresponded with his Branch Manager and HSBC’s Complaints Department. He has repeatedly denied that he signed any loan agreement in connection with the managed loan. He has requested sight of the signed loan agreement and HSBC have failed to provide this to him. Further HSBC have relied upon the presentation of a “true copy” of the agreement to enforce the loan.

Our client continues to dispute that that he signed any written agreement in relation to the managed loan and, therefore, maintains that the loan is unenforceable.

Request for further information

Please now provide a copy of the loan document which bears his signature and thereby makes the agreement valid and enforceable as without this, the agreement previously sent cannot be considered a true copy and you have failed to comply with Section 77 of the Consumer Credit Act. In addition please provide any corroborating documentation to show how and when the loan agreement was sent to our client for signature e.g. covering letter and when it was returned from our client signed.

Further please provide screen print outs from your computer records detailing the phone calls made by HSBC to our client from the time that he exceeded his Gold Credit Card limit to the current day.

In addition we require confirmation as to whether telephone conversations made by HSBC to our client were recorded and if so please provide copies and/or transcripts of any such recordings.

As set out above our client disputes that there is an enforceable loan agreement in place between HSBC and him. As a result (and in accordance with the Consumer Credit Act and in line with the Case Wilson vs First County Credit) he is entitled to have all repayements and interest applied refunded to him. In the alternative it is disputed that the full sums claimed under the loan are legally recoverable. Any attempt to enforce full recovery of the debt (either by yourselves or through a debt collection agency) , as well as adding reference to the Managed Loan on his credit file is an infringement of Sections 65 and 77 of the Consumer Credit Act and will be disputed if necessary via Court proceedings.

Further should we fail to receive a satisfactory response to this letter we will receive instructions to either progress this complaint to the Financial Ombudsmen’s Service or claim reimbursement of all loan repayments, interest applied and any linked charges (plus 8% statutory interest) through the county court. When successful HSBC will also be liable for all of our client’s legal costs.

We look forward to hearing from you by return.

Yours faithfully

 

Don's Lawyer

[hsbcfiddled]

They need to keep documents such as a copy of the agreement for 6 years after the closure of the account to comply with money laundering legislation. If they don't they commit a rather serious offence.

 

The law is very clear on this no credit agreement = no enforcement of the debt. The Consumer Credit Act was set up to protect consumers from sharp practices by creditors. The whole balance of probability arguement I'm afraid is complete bollarks in this instance. The solicitor simply hasn't ready the statute or case law.

 

EDIT: The point is not really about whether there is or was a debt, the point is whether it can lawfully be enforced. Without a copy of the agreement it can not be enforced.

 

Anyone know the exact section from the CCA that applies please?

[42man]

Rights and Duties

CCA74 s189(1)

“ creditor “ means the person providing credit under a consumer credit agreement or

the person to whom his rights and duties under the agreement have passed by

assignment or operation of law, and in relation to a prospective consumer credit

agreement, includes the prospective creditor;

CCA74 189 (1)

“ debtor “ means the individual receiving credit under a consumer credit agreement or

the person to whom his rights and duties under the agreement have passed by

assignment or operation of law, and in relation to a prospective consumer credit

agreement includes the prospective debtor

S61(1)(a) CCA provides that, for a regulated agreement to be properly executed, it must contain all the prescribed terms of the agreement and conform to regulations under s60(1) – see Q1.14.

 

Reg 6(1) provides that the terms specified in Sch 6 to the Agreements Regulations are ‘prescribed terms’ for the purposes of s61(1)(a) and s127(3) – see Q8.2.

 

 

CCA RULES FOR PRESCRIBED TERMS

CONSUMER CREDIT ACT

8.2 What if prescribed terms are missing or incorrect?

 

s127(3) provides that the court may not make an enforcement order unless a document containing all the prescribed terms of the agreement was signed by the debtor – see Q1.21.

 

If therefore any of the prescribed terms is missing, or incorrect, the agreement is not enforceable against the debtor, and the court is precluded from making an enforcement order.

 

 

8.3 What are the prescribed terms?

 

The prescribed terms specified in Sch 6 are as follows:

 

* amount of credit – see Q8.

 

* credit limit – see Q8.5

* repayments – see Q8.9.

* rate of interest – see Q8.6

 

Sch 6 was not amended by the 2004 Regulations.

They need to keep documents such as a copy of the agreement for 6 years after the closure of the account to comply with money laundering legislation.

IS MY AGREEMENT ENFORCEABLE( Via section 127(3) CCA1974)

PRESCRIBED TERMS FOR THE PURPOSES OF SECTIONS 61(1)(0) AND 127(3) OF THE

CONSUMER CREDIT ACT 1974 Taken from sced.6(1983/1553) regulations

(If you just want to find out, skip the bits in between the stars it’s just some extra information)

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

 

How does unenforceable differ from enforceable with a court order only?

When an agreement is unenforceable it means that the court or the judge cannot make a ruling on it. The court cannot make it enforceable.

When an agreement is enforceable only by ruling of the court it means that the agreement can be stopped by the debtor but the court has the power to re-instate it and allow the credit to continue to enforce.**

 

The Pescribed Terms are these

 

A Amount of credit

A term stating the amount of credit

 

B Repayments

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following-

(a) Number of repayments;

(b) Amount of repayments;

© Frequency and timing of repayments;

(d) Dates of repayments;

(e) The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable.

 

C Rate of interest

A term stating the rate of interest to be applied to the credit issued under the agreement

D Credit limit

This may be a term or the manner in which it will be determined or that there is no credit limit.

--------------------------

 

Which of these applies to you depends on the type of agreement you have?

 

For a Running Account (credit card) agreement

 

BC and D Apply

 

For a Restricted Use Debtor Creditor Supplier

• Where the dealer is the supplier and the creditor is the one providing the finance.
  
• The money can only be used for the purpose it is given.
  
• There is no interest on the purchase (the cash price is the same as the total price)
  
• And there is no advance payment

A is applicable

 

For a fixed Sum Credit Agreement

A conventional credit agreement with none of the above restrictions

 

A and B apply

 

For a Hire Agreement

 

B is Applicable

 

This paper only covers section 127(3) of the Act agreements can also be unenforceable by contravention of sections 1 and4 this will be the subject of the next paper.

Please note that these Prescribed terms where not changed in any way by the 2004/1482 Ammendments although the form in which they appear on the agreement was. Subsection127(3) was repealed on the 6th of April 2007 so that unenforceability due to 127(3) will only apply to agreemens executed before that date.

Consumer Credit (Prescribed Periods for Giving Information) Regulations

1983 (SI 1983/1569)

2 Prescribed period

The period of 12 working days is hereby prescribed for the purposes of each provision of the Act specified in Column 1

of the Schedule to these Regulations relating to the duty indicated in Column 2 in relation to regulated agreements

 

 

SCHEDULE

SECTIONS OF THE ACT IN RESPECT OF WHICH A PERIOD OF 12 WORKING DAYS IS PRESCRIBED RELATING TO DUTIES IN

RELATION TO REGULATED AGREEMENTS

Regulation 2

Section of the

Act

Duty

(1) (2)

77(1) Duty to give information to debtor under fixed-sum credit agreement.

78(1) Duty to give information to debtor under running-account credit agreement.

79(1) Duty to give information to hirer under consumer hire agreement.

and section 78 for running credit

 

 

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 [F1 £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,—

(a)

the state of the account, and

 

(b)

the amount, if any currently payable under the agreement by the debtor to the creditor, and

 

©

the amounts and due dates of any payments which, if the debtor does not draw further on the account, will later become payable under the agreement by the debtor to the creditor.

 

 

(2) If the creditor possesses insufficient information to enable him to ascertain the amounts and dates mentioned in subsection (1)©, he shall be taken to comply with that paragraph if his statement under subsection (1) gives the basis on which, under the regulated agreement, they would fall to be ascertained.

 

(3) Subsection (1) does not apply to—

(a)

an agreement under which no sum is, or will or may become, payable by the debtor, or

 

(b)

a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

 

 

(4) Where running-account credit is provided under a regulated agreement, the creditor shall give the debtor statements in the prescribed form, and with the prescribed contents—

(a)

showing according to the information to which it is practicable for him to refer, the state of the account at regular intervals of not more than twelve months, and

 

(b)

where the agreement provides, in relation to specified periods, for the making of payments by the debtor, or the charging against him of interest or any other sum, showing according to the information to which it is practicable for him to refer the state of the account at the end of each of those periods during which there is any movement in the account.

 

 

(5) A statement under subsection (4) shall be given within the prescribed period after the end of the period to which the statement relates.

 

(6) If the creditor under an agreement fails to comply with subsection (1)—

(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.

 

 

(7) This section does not apply to a non-commercial agreement, and subsections (4) and (5) do not apply to a small agreement

[hsbcfiddled]

Hi 42MAN,

Thanks for the info…….brill.

However what I am really interested in is the quote below.

Quote;

The law is very clear on this no credit agreement = no enforcement of the debt.

I believe that the creditor must be in possession of the original document for six years beyond the lifetime of the agreement.

The original agreement was in A5 format.

A solicitor acting against MOH is trying to persuade us that a reconstructed document into A4 from microfilmed source is ‘perfectly admissible in court’ even though we have disagreed.

The solicitor is threatening court action.

I want to know where it states in the CCA that the original must be retained, if indeed it does.

[car2403]

s.127 prevents enforcement without having an agreement;

 

127.—(1) In the case of an application for an enforcement order under—

(a)

section 65(1) (improperly executed agreements),

(3)

The court shall not make an enforcement order under section 65(1) if section

61(1)(a) (signing of agreements) was not complied with unless a document (whether

or not in the prescribed form and complying with regulations under section 60(1))

itself containing all the prescribed terms of the agreement was signed by the debtor or

hirer (whether or not in the prescribed manner).

 

If there no credit agreement, signed by the parties, the Court can't enforce the debt against the debtor and the creditor is left without remedy through the Court as an method of enforcement, nor can they seek enforcement by any other means, as the debtor has a complete defence against such enforcement. (Wilson v First County Trust)

 

The jist is that an agreement can be executed without being signed, (see earlier posts on the main CCA thread for the discussion surrounding this, if you're interested) but is improperly executed as it doesn't meet the requirements of form/content of CCA 1974. (As there is no signature)

 

Improper execution + s.127 exclusion from issue of enforcement order = unenforceable agreement.

 

Does this answer your question?

 

Incidentally, report the Solicitor to the Law Society, as he is CLEARLY misrepresenting the facts and causing you prejudice by misleading you he can take Court action against you. Having said that, their is nothing wrong with saying the agreement is "admissible in Court", as you've put it, as he is right - just doesn't stand a hope in hell of having the agreement enforced against you! I'd also argue he is using the fact you are a "layperson" to confuse you with legal jargon, as "admissible" is right "can be relied upon to enforce" is wrong...

[don leocornay]

Happy New Year to all!

 

update on current situation:

 

1/ HSBC have written back saying that my lawyer doesn't hold authority so they won't reply to them.

 

2/ They've passed the accout to Metropolitan Collection Services.

 

Woo hoo!

[42man]

Watching with interest DL.....very likely they will pass it on to DG Solicitors (all part of the same HSBC / Metropolitan in house collection service).......

[joesoap]

Watching with interest DL.....very likely they will pass it on to DG Solicitors (all part of the same HSBC / Metropolitan in house collection service).......

 

Son's was passed on to DG solicitors and after collecting they've decided to give up and have now passed it on to Fredrickson's who I politely told (on behalf of my son) to P off unless they could give me a signed agreement. It's been quiet since November; haven't heard a tosser.

[don leocornay]

It's not a problem. I'll simply pass the bill onto HSBC should I decide to go to court. Becoming more and more likely.

 

Haven't told solicitor yet but MCOL might be the best option. Put claims in as follows:

 

1/ Render loan unenforceable

2/ Remove ALL information regarding this from my credit file.

3/ Pay all costs

4a/ Refund all interest applied, payments taken and subsequent bank charges (about 9k to me).

4b/ If a is rejected then substract said charges against original balance (about 1.5k to me)

 

Even if both parts or point 4 are rejected, as long as I get 1 and 2 then I'm happy.

 

What do you guys think?

[don leocornay]

Update:

 

HSBC have now gone to DG Solicitors.

[hsbcfiddled]

Good luck Don.

 

Keep us posted.

[don leocornay]

Happy Valentine's all!

 

Quick update:

Contacted DG Solicitors on the 2nd of Feb to explain situation, usual questions "Did you receive the money?" etc. I refused to answer as the question was irrelevant.

 

I advised them to refer to my solicitor. They couldn't guarantee it but would put my account on hold.

 

My Solicitor has since contacted them and they gave her the runaround as well. Eventually they advised that they would refer to my branch (the same branch who claimed it was 'damaged or destroyed'), who would send a copy that should take 7 days. We've given them to the emd of the month to either:

 

Produce a signed agreement

Confirm they are taking no further action.

 

On top we've advised that if they don't comply we can issue them with a court order forcing them to cough up the agreement or else!

 

I love it, she finally agrees that court is the way to go!

[42man]

Great work Don L....watching with interest, keep us posted !!!

[don leocornay]

Update:

 

DG Solicitors have missed their 10 day deadline. When my solicitor contacted them, they tried to give her the brush off. She's now insisted that a Solicitor (not a call centre operator) contact her.

 

I love it, the more the goes on, the more annoyed she gets!

[42man]

Brilliant...watching with interest here DL...

[don leocornay]

Received final response from HSBC.

Will post in full later on but they basically repeated their previous points, told me it's gone to debt collectors and I should pay up.