Natwest Claimform - current Account

[debtsurvivor]

Here is a post Rory made in June I hope it helps

 

In an attempt to clear up whether or not you can CCA request overdrafts.

 

From the Consumer Credit Act 1974:

 

Facts. The manager of the C Bank agrees orally with D (an individual) to open a current account in D’s name. Nothing is said about overdraft facilities. After maintaining the account in credit for some weeks, D draws a cheque in favour of E for an amount exceeding D’s credit balance by £20. E presents the cheque and the Bank pay it.

Analysis. In drawing the cheque D, by implication, requests the Bank to grant him an overdraft of £20 on its usual terms as to interest and other charges. In deciding to honour the cheque, the Bank by implication accept the offer. This constitutes a regulated small consumer credit agreement for unrestricted-use, fixed-sum credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a determination under section 74(3).

 

Facts. F (an individual) has had a current account with the G Bank for many years. Although usually in credit, the account has been allowed by the Bank to become overdrawn from time to time. The maximum such overdraft has been is about £1,000. No explicit agreement has ever been made about overdraft facilities. Now, with a credit balance of £500, F draws a cheque for £1,300

 

Analysis. It might well be held that the agreement with F (express or implied) under which the Bank operate his account includes an implied term giving him the right to overdraft facilities up to say £1,000. If so, the agreement is a regulated consumer credit agreement for unrestricted-use, running-account credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a direction under section 74(3). It is also a multiple agreement, part of which (i.e. the part not dealing with the overdraft), as referred to in section 18(1)(a), falls within a category of agreement not mentioned in this Act.

 

Facts. Under an oral agreement made on 10th January, X (an individual) has an overdraft on his current account at the Y bank with a credit limit of £100. On 15th February, when his overdraft stands at £90, X draws a cheque for £25. It is the first time that X has exceeded his credit limit, and on 16th February the bank honours the cheque.

Analysis. The agreement of 10th January is a consumer credit agreement for running-account credit. The agreement of 15th-16th February varies the earlier agreement by adding a term allowing the credit limit to be exceeded merely temporarily. By section 82(2) the later agreement is deemed to revoke the earlier agreement and reproduce the combined effect of the two agreements. By section 82(4), Part V of this Act (except section 56) does not apply to the later agreement. By section 18(5), a term allowing a merely temporary excess over the credit limit is not to be treated as a separate agreement, or as providing fixed-sum credit. The whole of the £115 owed to the bank by X on 16th February is therefore running-account credit.

 

Facts. The G Bank grants H (an individual) an unlimited overdraft, with an increased rate of interest on so much of any debit balance as exceeds £2,000.

Analysis. Although the overdraft purports to be unlimited, the stipulation for increased interest above £2,000 brings the agreement within section 10(3)(b)(ii) and it is a consumer credit agreement.

 

 

Statute Law database

[MAGDA]

Thanks for that Debtsurvivor. I guess my overdraft would be deemed to be a consumer credit agreement then, as we were offered an overdraft at a set amount (£7500) and stayed within that figure, until the account hit problems, at which point the bank added our charge card debt onto the overdraft (as we did not have sufficient funds within the account to settle it) which then caused it to exceed the agreed level. The bank have informed me that their only obligation now is to provide details of the outstanding balance and the rate of interest currently being charged.

 

Still not quite sure how to proceed now though.

 

Magda

[MAGDA]

Hi I am writing to Natwest re: our overdraft. Have requested a 'letter' of some kind confirming the details of the overdraft at the time it was granted , but the bank are not able to provide anything as they say they changed their computer system and also due to the 'passage of time' they no longer have it. I don't recall receiving anything at the time. Should I quote the following in my letter to them, re: Coutts v Sabastyen:

 

 

The Defendant provided an overdraft on the account;

a. The agreement was a regulated debtor-creditor agreement within the meaning of s.8 and s.13© of the Consumer Credit Act 1974, providing for 'running-account credit' within the meaning of s.10(1)(a) of the Act (in effect, a revolving credit within an agreed credit limit); and

b. That, as such, it was subject to the requirements of Part V of the Act (including the requirements as to documentation set out in sections 57 to 63 of the Act) save and in so far as it was excluded or exempted from such requirements.

 

Section 65 in Part V of the Act provides that an "improperly executed" regulated agreement is unenforceable by the creditor without a court order. It is common ground that a regulated agreement is "improperly executed" for this purpose if the requirements of sections 57 to 63 have not been complied with.

 

Section 74 of the Act provides for the exclusion of certain agreements from Part V. It provides as follows (so far as material):

"74. – (1) This part …. does not apply to –

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, …

(3) Subsection 1(b) … applies only where the OFT so determines, and such a determination –

(a) may be made subject to such conditions as the OFT thinks fit …

(3A) …. in relation to a debtor-creditor agreement under which the creditor is …. a bank …. the OFT shall make a determination that subsection 1(b) above applies unless it considers that it would be against the public interest to do so.

 

THE DETERMINATION:

 

The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:

"1. Under the powers conferred upon me by s.74(3) and (3A) and s.133 of the Consumer Credit 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.

2. This Determination is made subject to the following conditions:-

(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;

(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded:

- of the credit limit, if any,

- of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,

- of the procedure for terminating the agreement;

and this information shall be confirmed in writing.

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing not later than 7 days after the end of that 3 month period of the annual rate of interest and charges applicable.

3. In this Determination the terms 'creditor' and 'debtor' shall have the meanings assigned to them respectively by Section 189 of [the Act]. The term 'bank' includes the Bank of England and banks within the meaning of the Bankers' Books Evidence Act 1879 as amended."

 

9. The Claimant avers, therefore, that the Defendant is in default of the Claimant’s request to provide those details required by the Determination of The Office of Fair Trading and, while that default continues, should be held in default within the terms of s.78(6).

 

10. The Defendant has failed to provide a document that complies with this request. Accordingly, the Defendant is “in default” under s.78(6) and the Claimant respectfully submits that this prevents the Court enforcing this debt until the default is rectified as per s.78(6)(a) CCA 1974. The Defendant has also committed an offence under s.78(6)(a) CCA 1974.

 

thanks for any help, Magda

[Guest vortex]

Magda, can you clarify if you are needing to find out the overdraft limits and when they went up on your account?

[MAGDA]

Hi, No, Nwest have been threatening recently that unless I could increase my repayments they would be taking me to court to obtain a charge on our property, I make regular monthly repayments on the O/D the account is now effectively closed and I have an account elsewhere. I wrote asking for a CCA and they said that overdrafts did not come under the Consumer credit Act and I then asked for a letter or something in writing which would have confirmed the details of my o/d at that time, but they don't have the info as they say due to the passage of time and a change intheir computer system it is no longer available. I believe I should have received something in writing confiming the details and cancellation rights. The debt is being dealt with by their inhouse collection team 'Unidebt'

[Guest vortex]

The overdraft side of things would not have been sent out and has only been done recently to my knowledge because the terms of the overdraft are contained with the terms and conditions of the account which have varied over time. If they are saying they cannot provide you with details of when and how much the overdraft was then that is an absolute LIE.

There is something called the NatWest Archive, a legacy from the old NatWest Computer system which changed in Octoner 2002 to the current one. The notes that you should have received with a FULL SUBJECT ACCESS REQUEST(statements is not a SAR) would have provided those details.

[MAGDA]

Hi Vortex, NatWest did send me about 10 years worth of computer prinouts which were basically copies of statments from our account, and the statments do state the interest rate being charged, but not much else, I know that an overdraft is still covered by a CCA but they are exempt from section V, but the case of Coutts & Co V Sebastyen stated that a letter of some kind should be provided by the bank to outline the terms and cancellation rights of the overdraft, but not sure if I should quote this in my case or not

Thanks, Magda

[MAGDA]

Just to add, they did say that their computer system changed in 2002, but they say they don't have any letters or anything else any more apart from the prinouts of statements they sent me, so I have nothing to confirm that the interest they are currently charging etc is in fact correct

Thanks for any help you can provide, Magda

[Guest vortex]

They have no letters but they do have notes which should have been provided from the SAR re increases in overdraft etc,etc, and they could provide the historic interest rates on the overdraft interest if they wanted to or if you asked them to provide it. (yes i know it is a battle just to get the info)

[MAGDA]

Thanks Vortex for that. I have been making regular payment to Nwest, but like most creditors they get greedy and want more and more, which is ok if you have it. I noticed someone on another thread called them Snatch West, which seems appropriate. The other query I have with Nwest is that they have told me the debt without interest is a certain figure, but if it reverts back to Nwest control (currently with Unidebt, their inhouse collections) it will increase by £7-8000. I had it in writing that the interest being applied was zero and pointed this out, but they then wrote and said that this only applies whilst the debt is with Uidebt, which seems strange, as it is still part of Nwest. There is little point in making payments at all, because it isn't enough to cover the interest they will eventually charge, so the debt is increasing in effect. Thanks,

 

Magda

[car2403]

Why are you challenging the Overdraft, Magda? What are you hoping to achieve with your challenge?

 

(Also, is this the same overdraft that you have on another thread - you're better off sticking to one thread, or it gets confusing. I suggest a site helper/mod merges these 2 threads if they are about the same account/overdraft)

[MAGDA]

Yes, it is the same overdraft, you'll have to be bear with me, but I'm new to this kind of thing! Anyway, what I'm hoping to achieve is to find out whether or not my overdraft could in fact be enforceable in a court, which I daresay it could. i'm not hoping to avoid payment of it (I make regular monthly payments) but without going into too much detail which would take a long time on here, I just wanted to know whether, because I didn't receive anything in writing at the time the overdraft started, whether this makes a difference or not. A few people including Rory, (who seems to have a lot of knowledtge on this kind of thing) have said that I should have received something, usually in the form of a letter (re: Coutts v Sebastyan).

As lots of other Natwest customers are aware on here, Natwest are not always the nicest of people once you hit any problem with your account, and that's putting it mildly. I think at some point in the not too distant future, Natwest will endeavour to secure the debt on our home, not something we particularly want. Although this scenario is true for most people with debt, at some point, whoever you are, a creditor will go for a forthwith and then a charge is pretty much a formality) I do have experience of the court system with regard to debt as I was recently helping someone else with similar problems, and we attended a lot of hearings before the district judge, and I know that sometimes, no matter how much you quote the law or think you have right on your side, the plain truth of the matter is that it does depend on the judge and whether he is leaning toward the creditor or the debtor in any particular case.

Thanks,

Magda

[car2403]

Magda,

 

It's right that to get the benefit of the OFT's Determination that the form/content requirements of the CCA 1974 do not apply to overdrafts due to the function of s.74, NatWest will have to show that they complied with the terms of the Determination, which required them to send you a letter either before or shortly after you applied for the overdraft that outlines the interest rate applicable, any terms relating to overdraft charges and details of how they can demand repayment and terminate the agreement.

 

From what you're saying here and on other threads, you are wanting to challenge the overdraft as being unenforceable because NatWest didn't comply with the OFT Determination under s.74, so therefore have an agreement that is unenforceable against you as a debtor, right?

 

The problem here is one of evidential burden, IMO. Let me explain...

 

NatWest need only show that they did comply with the Determination at the time the agreement was made. Realistically, a Judge may allow them to submit an expert witness statement from a member of staff that deals with overdrafts, stating that an automated letter is sent that complies with the Determination on successful application for an overdraft. On the balance of probabilites, if the Judge accepts it, this is probably enough to show that the Bank complied with the Determination - in effect making the overdraft enforceable.

 

I'm aware this probably isn't what you want to hear, so I will go on...

 

IMO, in order to benefit from the Determination, they need to show evidence of their compliance with it. Again, IMO, I think this should be to the same standard of the Part V of the CCA, in that they must be able to produce original documentation showing that compliance, along with evidence to show proof of postage/receipt by the debtor. This may not be the opinion of the Court, as I don't think there is clear precedant for them to follow, so they will probably apply normal rules of evidence in the absence of it. (This is what I've described, above) In fact, I believe that the wording of the Determination itself suggests this should be the action taken by the Court anyway. (It could be argued that the Determination is "subordinate legislation" and binding on a Court as it's made under powers delegated from an Act of Parliament)

 

Having said that, if you can show there are other issues that you can challenge the overdraft on - such as being Defaulted unlawfully due to the application of unlawful charges, or having adverse credit information recorded against you by the Bank without them having written consent for the sharing of information with third parties, for example - you may still get the outcome you want (unenforceable overdraft) without having to rely specifically on the failure to comply with the Determination.

 

If I've confused you, I suggest you read my thread on Default removal against Barclays, as I've used this argument as part of my POC. That is based on an unenforceable CCA agreement being enforced, alongside the overdraft that isn't compliant with the Determination, both of which have been Defaulted incorrectly due to the application of unlawful charges/interest. Here's the thread;

 

http://www.consumeractiongroup.co.uk/forum/data-protection-default-issues/110184-car2403-barclays-bank-default.html

[MAGDA]

Thanks for that Car. I am obviously not looking to pursue this in court, but if NatWest decide otherwise, it is helpful to know what my options are. A lot of creditors are now endeavouring to make an unsecured debt into a secured one, with a great deal of success. The courts are increasingly granting forthwiths, which then gives the creditor a green light to obtain a charge. I, as I am sure all of you do, think this is appalling, but it is, unfortunately, a fact. If the creditor (for credit card debts and such like) can't provide a CCA then ok, you have a defence, but otherwise it depends on the judge you get on that day. I believe the law is set to change (if it goes through) to make it easier for creditors to obtain a charge (at the moment the case of mercantile credit v. Ellis is often quoted, where basically, if you have an instalment order and haven't defaulted on it, then a charge shouldn't be granted. Again, in the real world this isn't always the case, as the creditor often applies for a redetermination and is then given a forthwith. The person I was helping was in a situation where an instalment order had been changed to a forthwith when after various hearings, the creditor was given a forthwith and basically told to go ahead and apply for the charge, which was a foregone conclusion. However, I ignored advice from National debtline, CAB, etc, who basically said that the judgement was carved in stone, and we went back to the court yet again, (the person concerned is elderly, (which of course to the creditor made absolutely no difference)and this time we were fortunate enough to have a sympathetic judge who reinstated the instalement order. So the message here is don't give up, even if it seems pointless to carry on, because you never know....

Thanks again, Magda

[Murphy69]

Hi Mada

Please read post about my situation immediately and do Not accept that it is a forgone conclusion that this OD is enforcable no matter what CAB or ND say. They all told me I had no chance and to go Bankrupt, no one would look at my case and it was hopeless etc, etc, well I am not out of the wood yet but have managed to reduce debt from 400k + to 200k and am still not BR and have no intention of going down that rout. I also have loads of equity in a prop but will fight tooth and nail to prevent a CO being placed on it. You need to contact the people I suggest and believe me, its the best £30 I ever spent. If I had know earlier what I know now, it would have save me another 20k. I'm not suggesting you dont pay your debts - I am saying do what is right and just and remember your own family too. No one will come to help if you get dumped out of your home, take action now and remember - they cant get a CO if they dont have a ccj and they wont get a ccj if they cant produce the true origional agreement with ALL THE PERCRIBED terms in accordance with the cca 1974 stated correctly.

Good Luck

All above is my opinion only and I am suggesting the above based on my experiences! - this does not constitute legal or professional advice.

[MAGDA]

Hi Murphy, thanks for your comments. My situation is a bit different as I haven't had the threat of becoming bankrupt, but creditors are always threatening court action and getting a charge on our property. I agree with you that an unsecured debt shouldn't be made into a secured one, as the creditor always has the option of offering a secured loan, rather than an unsecurd one, at the time the loan is granted. The added risk they take is reflected in the interest rate offered. Also the debt is usually sold on as soon as any problem arises, and the DCA's buy these debt for a very small percentage of the original debt (I've been told it's around 7-10%), but still continue to pursue us for the whole amount. I am currently in the process of requesting CCA's from all of my creditors and so far, only one creditor has managed to produce anything! It just makes me wonder how many people are made bankrupt or taken to court when the creditor doesn't have a CCA.

[MAGDA]

Hi Murphy, thanks for your comments. My situation is a bit different as I haven't had the threat of becoming bankrupt, but creditors are always threatening court action and getting a charge on our property. I agree with you that an unsecured debt shouldn't be made into a secured one, as the creditor always has the option of offering a secured loan, rather than an unsecured one, at the time the loan is granted. The added risk they take is reflected in the interest rate offered. Also the debt is usually sold on as soon as any problem arises, and the DCA's buy these debt for a very small percentage of the original debt (I've been told it's around 7-10%), but still continue to pursue us for the whole amount. I am currently in the process of requesting CCA's from all of my creditors and so far, only one creditor has managed to produce anything! It just makes me wonder how many people are made bankrupt or taken to court when the creditor doesn't have a CCA. Most people aren't aware of the CCA complicance thing, and unless the defendant offers any defence, the courts don't seem to bother whether the creditor has the CCA or not. National debtline and CAB etc are all fine if all you want is to set up a debt management plan, but when it comes to fighting your corner, you won't get a lot of help from any of these sources, I think there must be some conflict of interest, when these companies (Natdebtline CCCS) are sponsored by the creditors themselves. Just my opinion and personal experience, others may disagree. With the overdraft, as banks are expempt from section V of the CCA, it isn't as straightforward. They are supposed to have produced something in writing to confirm the terms of the overdraft at the time it was granted, but Natwest are saying they no longer have the letter and I certainly don't remember ever getting one. I have been told that the balance outstanding could change at any point as they can add a huge amount of interest on whenever it suits them, although I previously was informed in writing that the balance is much less and that zero interest is being applied. I'm sure they can't have it both ways, or maybe they can? It's pointless making payments if they are going to slap the interest on as we won't be reducing the debt, it will just carry on getting bigger by the day. You seem as though you are moving in the right direction, so I hope you manage to get all of your debt problems sorted soon. I am managing to get somewhere with a lot of my debt problems now thanks to the fantastic advice I have received from people on this site, It amazes me how much knowledge some of them have on this kind of thing. Best of luck to you and thanks again.

 

Magda

[ThisVeryMoment]

"DCA's buy these debt for a very small percentage of the original debt (I've been told it's around 7-10%), but still continue to pursue us for the whole amount".

 

Obviously they do. That is because 70% of the portfolios comprise of debt evaders who never pay their debt, (absconders, stat barred, unable to provide contract). Basically the honourable debtor subsidises the scumbugs.

 

Dont blame the DCA's, blame the debtors!!!

[MAGDA]

Natwest are putting interest charges on our account of somewhere in the region of £200+ pm. Although the actual balance is considerably smaller, this is set to increase, as at some point the interest will be officially applied to the account. It is very confusing as I have a letter from N'WEST stating that zero interest is being applied and there will be no future charges. However, in the next breath, I have also been informed that this statement has now been 'superseded' by a new one: that the interest will be applied as and when Natwest choose, which they claim they are entitled to do. This will make a huge difference to the original debt and of course our repyaments are pointless as they are not serving to actually reduce the debt. Would be grateful for some advice on this. Many thanks for all the help so far. Magda

[patrickq1]

i have a simmallar prob with barclays,i posted four checks on the wed,on the friday barclays wrote to me and terminated my bank account,on the following monday they honoured the four checks,this left me with a quandry as i was then with another bank,but also i had no overdraft facility with barclays at the time,so where do i stand i have been paying them for over four years and to date they have not sent me a single statement of my repayment and i really do not know how much i have paid and i am not paying barclays but a company called credit solutions so where do i stand,and credit solution are calling me three or four times a week demanding i pay more i just tell them i am disabled i cannot afford another penny and if they want more then take me to court and if they continue i have told them i shall stop all payments until i get some answers,barclays have sent me the statement and i cannot understand them as they are so complicated in the format they are written in .i do not know what is and isnt interest

patrickq1

[MAGDA]

Hi Patrickq1, I think firstly that any information Barclays send you has to be in a format that you are able to understand, and if it isn't, then I would get back to them. I would also contact your telephone provider and ask to have your telephone no. changed, if you are receiving nuisance calls, there shouldn't be any charge to do this. A lot of creditors refuse to speak to you if you don't give them your tel no., if they threaten this, just hang up and put it in writing, but I would only communicate with Barclays in writing anyway if you can, because from personal experience I know that you don't very often achieve anything over the phone. I may be completely wrong (this is just personal experience) but I think you will find that the amount of your debt has increased significantly, as they are almost cetainly adding interest. I would probably send a S.A.R's - (Subject Access Request) to Barclays and see what this turns up. I believe all this info is available in the library on this site. I am not an expert by any means and I have been helped a great deal by the people who really are the experts on this site, so hopefully someone else can give you a bit more advice on this (and me, also!)

Don't let them grind you down! Magda

[car2403]

i have a simmallar prob with barclays,i posted four checks on the wed,on the friday barclays wrote to me and terminated my bank account,on the following monday they honoured the four checks,this left me with a quandry as i was then with another bank,but also i had no overdraft facility with barclays at the time,so where do i stand i have been paying them for over four years and to date they have not sent me a single statement of my repayment and i really do not know how much i have paid and i am not paying barclays but a company called credit solutions so where do i stand,and credit solution are calling me three or four times a week demanding i pay more i just tell them i am disabled i cannot afford another penny and if they want more then take me to court and if they continue i have told them i shall stop all payments until i get some answers,barclays have sent me the statement and i cannot understand them as they are so complicated in the format they are written in .i do not know what is and isnt interest

patrickq1

 

Do you have a thread, partickq1?

[popeye1]

I think anyone you pay regular have to send a statement at the very least yearly, goodluck

[patrickq1]

hi car no i have not really got round to the barclays one at this moment because i could not understand what the information they sent ,well i mean i cannot understand the format and just do not know what is and isnt interest,and i am still awaiting on credit solutions to send me the full statements of how much i have paid them to date,i have not had a single staement from credit solution since i began paying them some 31/2 years ago...but firstly i need to sort out my Morgan Stanley thread first along with HFO

http://www.consumeractiongroup.co.uk/forum/debt-collectors-debt-collection/123193-patrickq1-hfo-morgan-stanley.html?highlight=hfo

[MAGDA]

Would still like some advice re: the interest that Natwest are proposing to charge, if anyone can help.

 

Cheers, Magda