DebtWeary V Connaughts - Success!!

[Guest DebtWeary]

Thanks everyone and thanks Rory for mergig the threads.

 

Yes, I agree about the OFT. Some of the methods used by the parties in question are in direct violation of the OFT's code of practice. That alone should be enough to get the OFT's attention.

 

These companies prey on people, frighten them into paying far more than they can afford, cannot even validate their right to collect the debt and exploit people's ignorance. "An intelligent approach to debt collection", as their website boasts - Bah!!

[babybear39]

Congratulations Debtweary but beware of 1st credit. They sometimes supply CCA MONTHS after you request it

[Guest DebtWeary]

Babybear you were right! Well, to a point. I had a letter today from 1st Credit, clearly a standard type letter, because it made no real reference to the CCA and S.A.R - (Subject Access Request) letters I sent way back on 8th Nov.

 

They basically said that they understand that I was querying the debt and that they are going to refer my "query" back to Lloyds, which may take up to a month! Then they had the temerity to suggest that I contact them as soon as possible so that I can discuss arrangements to pay off the undisputed portion of the debt!!

 

Well, I am composing a suitably scathing reply, pointing out their failure to provide me with ANY of the information I requested, that they are unable to enforce the debt because of this fact, that even if they were able to, they haven't provided me with the statements that I need to determine what the unfair charges are, that I shall report them if they take longer than 30 days - in other words, I shall politely tell them to f*** off.

 

Meanwhile, Connaught can sweat a bit longer, before I do withdraw the SD set-aside.

 

Can you believe these people??

 

If anyone can think of anything I have forgotten to throw at them, please tell me!!

 

Thanks.

[spamheed]

bearing in mind the fact that they started legal proceedings against you, I would be curious what recourse you have over the fact they threatened to make you bankrupt over a debt they had no title over and potentially caused you a great deal of distress and embarrassment.

 

They can't have all the rights, the little people must have access to some kind of stick to beat them with

[babybear39]

Sorry to have been to bearer of bad news but they did this with me and, months later miraculously produced what appeared to be an encforceable CCA and statements, after TS got involved. TS then said, after seeking advice, that they had decided NOT to prosecute them for non-comp. of CCA within the prescribed timescales or for harassment. But they did tell them that I may still persue them for harassment

[Guest DebtWeary]

Thanks guys for your replies, I have responded to 1st Credit, pointing out their inaccuracies and their failure to give me the right info. Yes babybear, I expect they will respond eventually, whether they can provide me with all the original statements is debatable though.

 

Even if TS can't or won't do anything, then I think the OFT might be interested in their breaches of their code. I have a feeling that if enough people complain about these particular companies that have caused me, and so many others, such upset and worry through their debt collection methods, then the OFT may have good reason to consider their right to have a Consumer Credit Licence. With no licence, they can no longer do business. It's high time their dubious methods were stopped.

[Guest DebtWeary]

Spoke to my Court yesterday, comfirmed that Connaughts HAVE written to them requesting withdrawal of the SD. I asked what I needed to do they said to write explaining why I wanted the SD Set-Aside withdrawn, so I will take a letter down this week.

 

I doubt if this is the end of the matter but at least Connaughts are out of the frame.

[rory32]

Spoke to my Court yesterday, comfirmed that Connaughts HAVE written to them requesting withdrawal of the SD.

What a surprise Well at least that's over and done with. Well done

[ODC]

Wonder what would happen if you did not withdraw your set aside

[Guest DebtWeary]

Don't know ODC, it's tempting to just go along to the hearing and see what happens - the clerk at the Court told me that Connaughts had said in their letter that they would not attend the hearing, so I guess that would mean the judge would set the SD aside anyway.

 

I get the feeling that 1st Credit won't give up so easily - but I'm ready for them!

[spamheed]

Have you had anything in writing to say that the SD is being withdrawn?

 

If not, then apart from a telephone conversation, you have not been informed directly of their actions.

 

In line with ODCs comment, I wonder if this would reflect on Connaughts methods of communication?? quick enough to start the ball rolling, but when they have to backtrack, they say nowt to you directly

[babybear39]

Best of luck with 1st credit, you'll need it

[Guest DebtWeary]

Spamheed, yes I posted a while ago to say that Connaughts had written saying they were withdrawing the SD. This is why I waited a while to ask the Court if they had done what they said they would.

 

When I go to deliver my letter to the Court I will see if they will let me have a copy of Connaught's letter to them.

[Guest DebtWeary]

I heard today from 1st Credit. A compliments slip plus a raft of paper which are copies of statements from Lloyds Tsb for the period I requested. I have had a quick look and there is at least £1000 in charges. So far so good.

 

But they have not sent through any copy of the overdraft agreement, nor any notice of assignment. They have gone over a month so I can ask TS to prosecute them.

 

Attached to the statements was this rather cryptic comment, included in a screen print of what appears to be their debt management system:

 

" - memo to 1st CR to adv that s/m now requested" (next to this line someone ad written "attached")

" - but no app"

 

Now are they admitting that they have no application or are they saying that I have not requested the application - which I have.

 

I think I shall write back thanking them for the statements but also advising them that I mean to write to TS. If they do manage to come up with some sort of agreement then I will take issue with the bank charges.

[shane5408]

I heard today from 1st Credit. A compliments slip plus a raft of paper which are copies of statements from Lloyds Tsb for the period I requested. I have had a quick look and there is at least £1000 in charges. So far so good.

 

But they have not sent through any copy of the overdraft agreement, nor any notice of assignment. They have gone over a month so I can ask TS to prosecute them.

 

Attached to the statements was this rather cryptic comment, included in a screen print of what appears to be their debt management system:

 

" - memo to 1st CR to adv that s/m now requested" (next to this line someone ad written "attached")

" - but no app"

 

Now are they admitting that they have no application or are they saying that I have not requested the application - which I have.

 

I think I shall write back thanking them for the statements but also advising them that I mean to write to TS. If they do manage to come up with some sort of agreement then I will take issue with the bank charges.

 

Hi DebtWeary,

 

I can see others have already mentioned overdrafts and the remit they fall under in the Consumer Credit Act, keep in mind though they are regulated by the Act, subject to a Determination Order by the OFT they are exempt from certain parts of it. A creditor is not required to hold a regulated agreeement for an overdraft nor are they under any obligation to provide one under a CCA Request. If you look at the wording of the Act it says:

 

77. — (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 [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. -

 

Though no agreement needs to be evident, IMO the creditor is required to have notified you of the general terms of the overdraft, ie initial credit limit, rate of interest, repayments etc, you would need to send a SAR to the original creditor to ascertan whether they did this or not.

 

kind regards,

Shane

 

 

____________________________________________

All advice is offered freely & without prejudice

 

 

If my post has been useful to you please click the scales

[Guest DebtWeary]

Hi Shane, thanks for that. But doesn't the "if any" condition apply to all the types of credit arrangement that are discussed on this forum? It seems to me that, as the assignee of the debt, 1st Credit still have to provide some sort of evidence to prove that they are entitled to try and collect it.

 

That is why I was intrigued by the "but no app" comment. It suggests that the statements they sent are all they have - although they must have some sort of agreement with Lloyds when they bought the debt which would specify exactly what they were taking on, in terms of their rights to collect the debt as well as their obligations to the debtor.

 

I think this whole area of debt assignment needs some clarification within the law. Does anyone know whether there is specific reference to this kind of debt in any legislation?

[Curlyben]

DW remember No CCA = Ne Enforceable Debt.

[shane5408]

Hi Shane, thanks for that. But doesn't the "if any" condition apply to all the types of credit arrangement that are discussed on this forum? It seems to me that, as the assignee of the debt, 1st Credit still have to provide some sort of evidence to prove that they are entitled to try and collect it.

 

That is why I was intrigued by the "but no app" comment. It suggests that the statements they sent are all they have - although they must have some sort of agreement with Lloyds when they bought the debt which would specify exactly what they were taking on, in terms of their rights to collect the debt as well as their obligations to the debtor.

 

I think this whole area of debt assignment needs some clarification within the law. Does anyone know whether there is specific reference to this kind of debt in any legislation?

 

Hiya,

 

No it doesn't, though many DCA's will try and mislead you into thinking it is so, take a bow CABOT!!! among others. Have a look at the letter below from the OFT in response to an email regarding overdrafts:

 

 

 

CONSUMER CREDIT ACT 1974 (the Act)

Thank you for your emails of 15 March 2007, concerning overdrafts, and of 22 March 2007, concerning credit card agreements, which have been passed to me to reply. I apologise for the delay in replying.

 

I should note that unfortunately the Office of Fair Trading (the OFT) cannot comment on or intervene in individual matters. This is because such actions fall beyond the remit of the OFT and because the OFT cannot be aware of all of the relevant information in each instance.

 

Similarly, the OFT cannot comment or express a view on particular practices, save where the OFT has considered a practice in the round and its view is in the public domain. The following points are therefore general in nature.

 

Overdrafts are normally not subject to those elements of the Act governing form and content of an agreement. This is because the OFT has issued a Determination under Section 74(3) of the Act excluding overdraft agreements from the need to comply. As a result of this there is usually no written agreement that a consumer can request under Section 78 of the Act.

 

However, I should note that any Bank wishing to avail itself of the benefit of the Determination must notify the OFT of its intention to do so and is required to provide information to the prospective debtor. Specifically, the creditor must provide, in writing, at the time the agreement is concluded or before details of the credit limit if any, the annual rate of interest and any charges available, and the process for terminating the agreement. Typically banks make such information readily available via a variety of media on an ongoing basis.

 

 

kind regards,

shane

 

 

____________________________________________

All advice is offered freely & without prejudice

 

 

If my post has been useful to you please click the scales

EDIT: Credit to Peter Bard for this letter

[Guest DebtWeary]

Thanks Shane, but how is the debt affected by it being sold to someone like 1st Credit? It no longer exists as an overdraft, simply a debt, which the buyer of the debt tries to recover. Wouldn't it then be subject to the same CCA request conditions as other eligible debts, such as loans etc?

 

If it were Lloyds Tsb trying to recover the debt, then I would have thought the exemption you mention would have applied. But they have long since ceased to have any interest in it.

 

I think the onus is still on 1st Credit to provide evidence of their entitlement to try and recover the debt. Surely, when they acquired it, then they should have provided me with the terms of the arrangement. Should it not be the case that assignees of debts be obliged to set up a properly regulated CCA agreement? I don't know how this debt sale operates so I don't know for sure.

 

Most of the notorious DCAs mentioned on this site are just agents and no more. They do not own the debt they are trying to extract from people.

[rory32]

1st Credit still have to provide some sort of evidence to prove that they are entitled to try and collect it

This would be the Notice of Assignment.

I think this whole area of debt assignment needs some clarification within the law.

The law is very clear on the distinctions between types of assignment:

There are four categories of assignment of a thing or chose in action:

1. statutory assignment of legal choses;
   
2. statutory assignment of equitable choses;
   
3. equitable assignment of legal choses; and
   
4. equitable assignment of equitable choses.

See paragraphs 31.9.29 - 31.9.33 below for the formalities of statutory assignments (under section 136 of the Law of Property Act (LPA) 1925) and equitable assignments. It is also necessary to consider, however, whether the assignment of a particular right of action should be legal (ie statutory) or equitable. The distinction, so far as the substantive law is concerned, between legal and equitable things in action is often more apparent than real. However, there is one very important procedural consequence which attaches to the distinction. A statutory assignee can sue without joining the assignor as a party to the action, whereas an equitable assignee often (although not always) cannot do this. Furthermore, a statutory assignment passes a legal right to the assignee, an equitable assignment passes only an equitable right.

Legal assignment of an equitable chose:Although section 136 LPA 1925 appears to apply in terms only to legal things in action, it is thought that the use of the word "trustee" in the list of persons who may be liable in respect of the thing in action militates against a restrictive interpretation. There is also some case law to support the view that equitable things in action are included in its scope. In one of the leading cases (Torkington v Magee [1902] 2 KB 427 at 430-431), Channell J said:

"I think the words "debt or other legal chose in action" mean debt or right which the common law looks on as not assignable by reason of its being a chose in action, but which a Court of Equity deals with as being assignable".

Equitable assignment of an equitable chose:Where a chose is merely equitable and where the whole of the interest is vested in the assignee (ie it is an absolute assignment), equity has always permitted him to sue in his own name without joining the original creditor (see, eg Cator v Croydon Canal [1834] 4 Y & C Ex 593; Fulham v M’Carthy [1848] 1 HLC 703); for the chose existed only in equity and so equity was free to hold that the assignee was the sole owner and no interest remained in the original creditor (see McMurchie v Thompson [1906] 8 OLR 637 and 639). Although there is no authority precisely on the point, it seems that an equitable assignee of an equitable thing in action must join the assignor where the assignor retains an interest in the thing in question.

Equitable assignment of a legal chose:Where a legal thing in action is equitably assigned the original creditor still owns the chose in law, holding it in trust for the assignee. Here neither the assignee nor the original creditor can sue without joining the other, as plaintiff if he consents or as defendant if he does not. The idea is that the court must have all the parties before it that are interested so that there can be a final adjudication binding them all.

Legal or equitable assignment: As far as a legal right of action is concerned a legal assignment is always to be preferred. As far as an absolute assignment of an equitable right of action is concerned, a legal assignment does not appear to be necessary. Provided that the official receiver is sure that he is dealing with an equitable and not a legal right of action and notice is properly given to the debtor, there appears to be no reason why a legal assignment need be entered into. It is not possible, however, to have a legal assignment of less than the whole of the assignor’s interest in the right of action, be it a legal or equitable right of action. Any such assignment will always be equitable. The official receiver should avoid any arrangement whereby any interest in the right of action (be it an equitable or legal right of action) is retained (see paragraph 31.9.25 on assignments to commercial organisations).

31.9.29 Legal assignment of a right of action

 

Where the official receiver as liquidator or trustee considers it desirable, following legal advice, to execute a legal assignment of a right of action, the power to do so is under section 136(1) of the Law of Property Act 1925. Under these provisions:-

1. the assignment must be absolute, to prevent the possibility of claims for costs and adverse costs (see paragraph 31.9.32). It must not be by way of a charge only (Durham Brothers v Robertson [1898] 1 QB 765).
   
2. the assignment must be in writing and signed personally by the assignor (ie the official receiver as liquidator acting on behalf of the company or as trustee). Legal advice should always be sought as to the form and content of the assignment.
   
3. express notice in writing of the assignment must be given by the official receiver to the other party or parties to the action which is to be or has been commenced. Again, legal advice should always be sought as to the content and service of the notice. The assignment only operates under s136 LPA 1925 from the date of the notice, that is, the date on which it is received by or on behalf of the person to whom it is addressed. S196 of the 1925 Act contains provisions on deemed service of notice. If s196 is relied on great care must be taken to follow strictly the relevant provisions. If the date of the assignment is wrongly stated the notice is ineffectual (Stanley v English Fibres Industries [1899] 68 LJ QB 839), though if no date at all is given then notice may be good (Van Lynn Developments Limited v Pelias Construction Co [1969] 1 QB 607). The 1925 Act does not prescribe any limit of time within which the notice must be given.
   
4. the assignment will be subject to existing equities (ie the debtor party may raise against the assignee any defence, set-off or counterclaim which he could have had if sued by the assignor, provided that the matter on which the defence or counter claim is based arose before notice of the assignment was received).

There are, however, likely to be complications where an assignment is proposed in a case where there have been mutual creditors, mutual debts or other mutual dealings between the bankrupt/company and the debtor and there is a potential set-off or counter claim (ie where Rule 4.90 or s323 might apply). In such a case the official receiver should contact Technical Section at HQ London before agreeing to any assignment.

The official receiver should notify, by letter, all interested parties of the completed assignment, eg the assignee and any legal advisers whom either the other parties to the action or the assignee may have instructed regarding the right of action.

31.9.30 Consideration for the assignment

 

The leading case regarding consideration for an assignment is Ramsey v Hartley [1977] 2 All ER 673 in which the Court of Appeal held that a promise to pay the assignor a sum of money calculated according to the amount received by the assignee as the fruits of the assignment can have no effect at all on the nature of the assignment otherwise absolute. The official receiver should therefore try to evaluate the worth of the claim and should obtain valuable consideration for the assignment (payable either on assignment or out of the proceeds of the action). In the latter case, in particular, care should be taken that the official receiver does not retain any right to control or influence the action in case it could be held that the assignment is not absolute. Again legal advice should be taken to ensure that this possibility is avoided. The official receiver (as liquidator or trustee) is obviously under a duty to get the best financial deal possible for the benefit of the creditors (see, in particular Tudor Grange Holdings Ltd and others v Citibank NA and another [1991] 4 All ER 1). It is difficult to lay down any general guidelines. The value of assignment will need to be considered on its own merits. In this connection, however, the official receiver will need to consider whether a possibly smaller payment (on completion of the assignment) would be better than agreeing to a potentially larger sum payable out of the proceeds (whether calculated as a fixed sum or a percentage) and risking receiving nothing if the action fails. Sanction will be necessary in a bankruptcy if the consideration is payable on some future date (see paragraph 31.9.33).

31.9.31 Date of legal assignment of right of action

 

From the date that the notice referred to in paragraph 31.9.29© is received by the other party or parties to the action, the legal right to such debt or right in action, all legal and other remedies and the power to give a good discharge without the concurrence of the assignor passes and is transferred to the assignee. Reference should also be made to paragraph 31.9.32 regarding a claim by the trustee if the action is successful.

31.9.32 Claim to proceeds of successful action after legal assignment

 

Provided that the assignment is otherwise absolute, there is nothing to prevent the official receiver and the assignee agreeing that the official receiver (the assignor) may be paid out of any proceeds that might accrue if the action is successful (Ramsey v Hartley [1977] 2 All ER 373). Where an absolute assignment has been given by the official receiver as liquidator or trustee, it will relieve him from any further involvement and liability in the action. The official receiver cannot make any claim to a share of the proceeds (except insofar as provided for in the assignment) if the assigned action is subsequently successful. It is probably the case that the trustee cannot claim as after-acquired property any damages received by a bankrupt to whom a right of action was assigned.

Notes:[s307 and 333(2); R6.200]

 

 

31.9.33 Equitable assignment of a right of action

 

An assignment of a right of action which does not comply with the requirements of section 136(1) of the Law of Property Act 1925 (see paragraph 31.9.29) may amount to good equitable assignment. The official receiver must bear in mind that with an equitable assignment of a legal chose the assignee may sue the debtor party in his own name but, as the legal title remains vested in the assignor, the company or trustee must be joined in the proceedings before the assignee can recover any damages (Weddell and Another [1988] 1 Ch 26). With an equitable assignment of an equitable chose and where the whole of the interest is vested in the assignee (ie it is an absolute assignment) the company or trustee need not be joined in the proceedings (Cater v Croydon Canal [1834] 4 Y & C Ex 593). Although consideration may not be necessary to support all types of equitable assignments the official receiver probably does not have the power to assign for anything less than valuable consideration (see Tudor Grange Holdings Ltd and others v Citibank NA and another [1991] 4 All ER 1). Where in bankruptcy cases consideration is payable other than upon the assignment of the right of action (ie where the trustee is to be paid at some future date, for example out of the proceeds, if any, of the action) the official receiver should apply for sanction to Technical Section (carrying out the functions of the creditors’ committee on behalf of the Secretary of State) (see Weddell cited above). Before applying for sanction the official receiver should be satisfied that the claim is not frivolous or vexatious or an abuse of the process of the court. This will greatly reduce the risk of having an order for costs made against the trustee. The official receiver should also be satisfied that the success of the action is likely to result in benefits to the bankrupt’s estate. Sanction does not appear to be necessary in company cases although the official receiver should similarly be satisfied that the claim is not frivolous or vexatious or an abuse of the process of the court. The official receiver should only undertake an equitable assignment where it is absolutely necessary because of the continuing liability for costs and potential adverse costs. If he does consider it appropriate he should first obtain adequate indemnities or ensure sufficient funds are available to discharge costs and any adverse costs (see also chapter 32.2).

There are, however, likely to be complications where an assignment is proposed in a case where there have been mutual credits, mutual debts or other mutual dealings between the bankrupt/company and the debtor and there is a potential set-off or counter claim (ie where Rule 4.90 or s323 might apply). In such a case the official receiver should contact Technical Section at HQ London before agreeing to any assignment.

Notes:[s436][s167(1)(b) and Schedule 4, Part III, para 6 or s314 and Schedule 5, Part I, para 3]

31.9.34 Form of equitable assignment

 

An equitable assignment of a right of action does not follow any particular form and as a general rule, does not even require a written document. There must, however, be some act by the assignor showing that he is passing the chose in action to the proposed assignee. In addition, the debtor party must be given notice that the right of action has been made over by the official receiver as liquidator or trustee to the assignee who, in most cases, will be the company director or bankrupt.

Wouldn't it then be subject to the same CCA request conditions as other eligible debts, such as loans etc?

Not really as it's an overdraft. Overdrafts have part V exemptions (form and content) but are still covered by the Act. An overdraft credit agreement would be a letter from the bank stating the amount of credit, the APR, charges and cancellation rights. It would not need to be signed by the debtor.

[itsamomentintime]

Debtweary - there is no mention so far about any complaint that you have made to OFT. Are you going to complain? Surely you must.

[Guest DebtWeary]

Rory, thanks for all the info -I don't pretend to understand it but I will read it through a few times! I am unclear now just how to go forward with this, I guess I will need to get 1st Credit to let me have sight of whatever form of assignment they claim to have.

 

Yes, the way Connaughts treated me would be of interest to the OFT. I need to get 1st Credit sorted out, to see what happens. If not, then I will establish just how much of the debt is made up of unfair charges.

 

Happy Christmas all!

[Guest DebtWeary]

Today I received confirmation from the Court that the SD will be set aside prior to the hearing date which would have been 3rd January. They also sent me a copy of the letter that Connaughts sent to the Court. On the end of this letter, they said they would not be attending the hearing "out of no disrespect to the Court but merely to save time and costs" Yeh right!

 

Can someone clarify something for me? I sent a S.A.R - (Subject Access Request) to 1st Credit and they responded with the statements I posted about before Christmas. Having done this, I have admitted the debt - haven't I? I acknowledge that I did owe the original Lloyds Tsb overdraft (but I am now disputing the charges). So if 1st Credit come back demanding payments, and stating that the debt is exempt from the usual CCA request because of it being an overdraft, what would I do?

 

If I write to them now, thanking them for the statements, should I again demand proof of their entitlement to collect the debt? Or should I write and see if I can get them to reduce the amount of the debt by the amount of excess charges which I shall calculate from the statements I received from them?

 

I'm confused!! Any help would be appreciated. Thanks.

[Goldlady]

IMO sending a SAR and receiving statements is not acknowledging the debt. They would need a copy of the original signed agreement to enforce it.

 

However if you work out the charges and the interest incurred on them it will give you an idea of how much is actually owed. And if they have backed off from the SD then it suggests they are unsure about the enforceability of it. So if you are in a position to make a FFS offer after deducting charges and interest I suspect you are in quite a strong position.

[Guest DebtWeary]

Thanks Goldlady, I have been told that this particular debt, being an overdraft originally, is exempt from a CCA request, so the most I am likely to get from 1st Credit is a copy of the letter Lloyds originally sent with the overdraft terms, as well as the Deed of Assignment proving that they are entitled to try and recover the debt.

 

Yes, it seems they do not feel they are in a strong position. You mention interest, how would I work this out? I gather that I can only try to reclaim charges levied within the last 6 years (the original Lloyds a/c dates back to the 1990s) so would I have to somehow compound this according to how long ago the charge was applied?

 

Thanks