HSBC managed account - Trying to remove a invalid? default

[chris1977]

Should that be;

 

 

Quote:

Originally Posted by chris1977

Received the bank's copy of the AQ today - disagree with the draft order for directions and request standard directions. Shock Horror!! .

 

 

Yeah, that's it

[chris1977]

No response to my letter suggesting a settlement and it's been 3 weeks now. I'll send a polite reminder tomorrow

[nyc_lond10]

I have been following you case. I have some questions of my own -

 

I have ben trying to remove a default from my current account for some time. The default was for my current account 1/2 made up of bank charges the other half was my overdraft. I was asking HSBC to remove the default back in 2007, before my trial with HSBC which was stayed in October. I have recently been trying to get the default removed but HSBC says that since the accoutnis in dispute, there's nothing they are willing to do, even though I was asking for this change before the stay.

 

Second point. An overdraft is not as I understand it covered by the CCA. So how can they issue a default notice on it. What have I defaulted on...? there is no credit agreement....?

 

Any answers?

[chris1977]

Directions hearing set for 1st August

[chris1977]

I have been following you case. I have some questions of my own -

 

I have ben trying to remove a default from my current account for some time. The default was for my current account 1/2 made up of bank charges the other half was my overdraft. I was asking HSBC to remove the default back in 2007, before my trial with HSBC which was stayed in October. I have recently been trying to get the default removed but HSBC says that since the accoutnis in dispute, there's nothing they are willing to do, even though I was asking for this change before the stay.

 

The account being in dispute shouldnt, in my opinion, stop them from doing anything with it (other than continue collecting of course). However, I'm by no means an expert so hopefully somebody will be able to confirm this. If you already have a claim which has been stayed due to the test case, I think you can add the default removal to this existing claim. Of course, the stay could apply for a long time, which means that the default will remain on your record for a long time. Are the bank charges the only reason you're questioning the default entry? If so, I don't think you have much choice other than to wait for the stay to be lifted. However, if you have a strong case without the bank charges argument, then maybe you could start a separate claim for default removal?

 

If you haven't already done so, I would suggest you start your own thread and ask for advice there, just to avoid any confusion

 

Second point. An overdraft is not as I understand it covered by the CCA. So how can they issue a default notice on it. What have I defaulted on...? there is no credit agreement....?

 

Any answers?

 

The overdraft is indeed covered by the CCA as running-account credit, but the current account itself is not. This detail is covered in a Determination made by the OFT. If you read back through this thread you will see similar questions that I have asked and others have answered and explained quite comprehensively.

 

Hope this helps and good luck

 

Chris

[nyc_lond10]

Thanks Chris - thats great and good luck with you case. Robert

[JOSH_IOU]

:)cant see any grey areas here.

 

This legislation is used widely on the internet.

 

You just have to no what to type into the search engine.

 

Good look with your case.

[Dileepan]

I have the same situation like you

1.account overdrawn by bounced DD-no OD limit in place

2.Bank penalised me by £30 charge-Couldn't bring the a/c back in track

due to hardship

3.recurring penalties monthly ended up with £345 overdrawn fully made up

with unfair penalty charges

4.bank passed the debt to debt collectors -no final demand notice, nor default notice

5. DEFAULT REGISTERED with all CRA's

6.i paid part of my debt as final settlement- i did this because there was no update of Default at CRA's at that time but it appeared back dated some time later

WHAT CAN I DO PLEASE HELP ME GUYS

[car2403]

If you read this thread from the start, you will be enlightened as to what you need to do.

 

FYI - the bank charges aren't penalty charges, so there's little you can do until the OFT test case is concluded, unfortunately.

[pt2537]

 

FYI - the bank charges aren't penalty charges, so there's little you can do until the OFT test case is concluded, unfortunately.

you may wish to rethink that statement Chris

 

the banks are appealing so the judgment may be reversed and may yet be considered penalty charges

 

plus we are still waiting for the Historic terms judgment as well;)

[johnnymitch]

(by Car 2403) there's little you can do until the OFT test case is concluded, unfortunately.

 

Hi Chris, a bit of enlightenment here please - are we no longer encouraging people to carry on with their claims up to the 'stayed by court' stage - thereby invoking the 8% interest ......? .

[freakyleaky]

are we no longer encouraging people to carry on with their claims up to the 'stayed by court' stage - thereby invoking the 8% interest ......? .

Well I certainly am and I think we all should be. Very little has changed and sooner or later stayed cases will have to be heard.

[johnnymitch]

Thanks freaky - and top o' the morning to you ,Sir!

 

I'll carry on as normal then......... whatever normal may be......LOL!

[johnnymitch]

Right then , Dileepan -

 

If you do as Chris says and read through this thread for guidance - then come back any time you need clarification - there'll always be someone to give you an answer................and we're a friendly lot on here..

Stick with it , follow the steps and you'll get there.......

Best of Luck

johnny:)

[Dileepan]

Thanks Johnny

[car2403]

you may wish to rethink that statement Chris

 

the banks are appealing so the judgment may be reversed and may yet be considered penalty charges

 

plus we are still waiting for the Historic terms judgment as well;)

 

Of course I stand corrected.

 

This is the result of having limited time online and not fully reading the post, because you're in a certain fast food restaurant with a ticker counting down - for some reason, seconds seem to go faster when you are paying per minute, I find?

 

[johnnymitch]

I've always found your posts most informative Chris -I'd say you're allowed one misread in 2673 posts goodness knows how many I've had ....LOL!

[chris1977]

Hi All. Quick update on Me vs HSBC....

 

I was in court this morning for the preliminary hearing to decide Directions. The hearing lasted approximately 30 minutes and wasn't as horrible an experience as I had expected it to be!

 

HSBC didn't take up the Judge's offer to attend by telephone and actually sent a solicitor to argue in favour of standard directions. After pleasantries were dispensed with in the waiting room I asked if he had had sight of my settlement suggestion, to which he responded "I have a copy of the letter, but this will be pushed through to trial". I went off him at that point

 

Anyway, during the hearing the Judge (very accurately) gave his interpretation of my Claim and HSBC's Defence and proceeded to go through my draft order for directions, which just to remind you all was as follows:

 

The Defendant shall within 14 days of service of this order send to the Claimant and to the Court:

 

• Certified true copy of the original Overdraft Agreement and any documents referred to within
  
• Default Notice compliant with s87 (1) Consumer Credit Act 1974 and Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) as amended,
  
• Copies of any documents which demonstrate that the Defendant has complied with the requirements of the Determination given by the Office of Fair Trading regarding overdrafts on current accounts
  
• Copies of any statement or other document(s) relied upon
  

If the Defendant fails to comply with this order, the Defence will be struck out without further order.

 

The Claimant shall within 14 days thereafter file and serve the following

 

• An amended Claim sufficiently particularised in response to the documents supplied by the Defendant
  

If the Claimant fails to comply with this order, the Claim will be struck out without further order.

 

The Judge then asked the bank's solicitor if he was able to provide a copy of the executed credit agreement, to which the young man responded: "No Sir, as the overdraft agreement is not subject to Part V of the act, by virtue of Section 74b." The judge reminded him that in order to benefit from the exemption under Section 74b, they must have complied with the requirements of the OFT Determination and went on to re-iterate the section of my POC which covered this. At this point the young man squirmed in his seat, shuffled some papers and looked like he had a bit of a sweat on! I really struggled to contain a smirk at this point

 

The bank's solicitor then produced a computer print-out of a standard letter which appeared to almost comply with at least one of the requirements of the determination, in that their system showed it was produced at the commencement of the overdraft agreement and it contained some of the required details. Sadly, it did not comply with all of the requirements so if this is what they will be relying on, I shouldn't have anything to worry about.

 

The judge went on to advise him that if the bank are unable to show that they complied with the determination, that "this could be a problem" for them.

 

The Judge also commented on the bank charges issue and said that this may result in the claim being stayed. I said that I was confident that, if necessary, I could withdraw this element and my claim would still be solid enough for me to have a very good chance of winning. The bank's solicitor requested that it be withdrawn at this stage "to avoid unnecessary delay and cost". The Judge disagreed and reminded him that costs would be minimal as this is a small claim and it would be more practical to keep this element in and see how the case goes before making a decision as to whether to proceed or not. He also suggested listing the hearing for a later date than normal, in the hope that the Test Case judgement would be passed by then.

 

In summary, special directions were ordered as follows:

 

The Defendant to disclose by 14th August:

 

Default Notice compliant with s87 (1) Consumer Credit Act 1974 and Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) as amended, or copy of a similar notice on which it intends to rely.

Copies of any documents which demonstrate that the Defendant has complied with the requirements of the Determination given by the Office of Fair Trading regarding overdrafts on current accounts

Copies of any other document(s) relied upon

 

Witness statements to be exchanged some time in mid-September (I wrote down the dates but don't have them to hand.).

 

Hearing listed for 31st October.

 

All in all, I think it went really well today. I couldn't really have asked for a better result and the Judge seemed to see exactly where my Claim was coming from and was very quick to dismiss any attempt from the other side to take advantage of my lesser knowledge of CPR. He also took the time to explain his reasoning to me. Basically, he seemed like a very fair man!!

 

Cheers

 

Chris

[johnnymitch]

All in all, I think it went really well today. I couldn't really have asked for a better result and the Judge seemed to see exactly where my Claim was coming from and was very quick to dismiss any attempt from the other side to take advantage of my lesser knowledge of CPR. He also took the time to explain his reasoning to me. Basically, he seemed like a very fair man!!

 

This is a great result, Chris , thanks for posting it......... it should give heart to anyone who is apprehensive about going to court.

 

Most small claims courts are pretty helpful, they know most of us are laymen. I also think the judges are getting cheesed off with the ducking & diving being done by banks solicitors......... and they must have stayed claims stacked to the ceiling in some courts

 

A good report chris, cheers again - :)

[car2403]

Interesting the Directions contain the words "Default Notice", as a Default Notice isn't required for an overdraft - it should be Termination Notice. Although it says "or similar notice", so they will probably be covered.

 

Really interested to see the result, now.

[chris1977]

Interesting the Directions contain the words "Default Notice", as a Default Notice isn't required for an overdraft - it should be Termination Notice.

 

I still think there's a valid argument there though, as Section 74 exempts them from Part 5 of the Act, but Part 7 of the Act covers Default Notices and, unless I've missed something, they're not exempt from that Part. As you mentioned in an earlier post Chris, in cases of Default a termination notice shouldn't be used anyway, as per Section 98(6).

 

Really interested to see the result, now.

 

You and me both mate

[Dileepan]

As both parties(Bank & Consumer) Knows there s no properly executed agreement exists,why do we have to write to the bank to provide them and waste our 28 daystime, instead can't we fast track the procedures by advise them that there s no such CCA exist ,and demand the bank to remove the default by giving them 21days time

[car2403]

I still think there's a valid argument there though, as Section 74 exempts them from Part 5 of the Act, but Part 7 of the Act covers Default Notices and, unless I've missed something, they're not exempt from that Part. As you mentioned in an earlier post Chris, in cases of Default a termination notice shouldn't be used anyway, as per Section 98(6).

 

The issue is, Chris, that the Bank can choose the method of terminating the agreement - in fact it's stipulated by the Determination;

 

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.

 

 

So, in effect, the Bank can choose to terminate the agreement either by Default Notice or Termination Notice, so long as they have told you in advance.

 

Usually, (I've researched many, as you can imagine) the Bank will state the overdraft can be subject to a demand of repayment at any time and, where you don't comply with that demand, a termination notice is issued giving notice of the intention to terminate the agreement - normally the demand for repayment and the termination notice are part of the same letter. The process is different with each Bank, though. This is how they get around the termination due to default - you default, they demand repayment and terminate when you can't pay. Sounds like a default notice to me?

 

As both parties(Bank & Consumer) Knows there s no properly executed agreement exists,why do we have to write to the bank to provide them and waste our 28 daystime, instead can't we fast track the procedures by advise them that there s no such CCA exist ,and demand the bank to remove the default by giving them 21days time

 

I'd disagree there - this is subject to some discussion on CAG, though, so it might be that there isn't a particular way to do this.

 

IMHO, you would request the original agreement under s.77/s.78, then wait for the Bank to admit they don't have one (or skirt around the issue until you challenge them on it) and that they rely on the Determination - at this point, you've boxed them in, as they need to show they've complied with the Determination in order to have an enforceable debt. If they can't, they can go and sing.

[chris1977]

The issue is, Chris, that the Bank can choose the method of terminating the agreement - in fact it's stipulated by the Determination;

 

 

 

So, in effect, the Bank can choose to terminate the agreement either by Default Notice or Termination Notice, so long as they have told you in advance.

 

Hi Chris. I suppose it's down to my interpretation of the determination. As far as I can make out, the determination means that Section 74 of the CCA applies, which exempts overdrafts from the requirements of Part V of the Act. But, as the need for a default notice is stipulated in Part VII of the act, and an overdraft is still a regulated agreement, this should still apply.

 

Also, my interpretation of the determination is that the bank must tell you the method of terminating the agreement - IMHO this does not mean they have the right to choose how the agreement should be terminated, as this is already defined in the CCA.... just that they must tell you the method.

 

Of course, I might be barking up the wrong tree and I may well get shot down in flames on the day, but do you see where I'm coming from with this?

[car2403]

Suppose, to comply with the s.74 Determination, they should tell you how they will terminate the agreement, but to comply with the CCA in order to Default you because of a default under the agreement, they should send you a Default Notice - in which case a termination due to a default need to be included in the Determination information, or that would be an unlawful Default.

 

Usually, though, Banks terminate agreements with termination notices, rather than Default Notices, which gets them around this issue.

 

It's quite technical, but the point is they must tell you how they are going to terminate and comply with Part VII if they terminate you due to your default of the agreement.

 

I can follow your argument, though - and I think we're saying the same thing, just in a different way. Hopefully!