GH2008 -v- Halifax (Visa Card)

[gh2008]

Hi All,

 

Ok, this was the one that started my whole 'adventure' into the wonderful world of the CAG.

 

Basically card taken out July '05 stupidly (with hindsight) to enable me to keep making minimum payments on my other debts

 

Anyway, was with Payplan for last 2 yrs, never stopped payments, sent 2, yes 2 Default Notices through (both whilst with PayPlan), kept adding late payment charges & interest etc.

 

They set Blair, Oliver & Scott in motion just before Xmas - nice and I ended up here

 

But, 6 weeks late, they have sent through a CCA.

At first glance it looks enforceable with an order from a court

Ok they haven't signed it, but a court isn't interested in that.

It is from July 2005 so that may make a difference re. what is required.

 

But it's always less easy (I find) looking at your own 'problem' than it is someone else's, so i would appreciate it if you could look at it and see what you make of it.

 

Thanks

 

BTW I do realise that

They haven't sent through a 'Statement of account' and therefore are still in default of my request

the Defaults are invalid due to incorrect form & charges added and 2 of them

& I can reclaim charges etc.

any more

 

but 1 step at a time agreement 1st

 

Cheers

gh

 

http://i264.photobucket.com/albums/ii184/gh2008_photos/TheConsumerCreditAgreementsRegulati.jpg

[duncan_disorderly]

It looks enforceable to me, but there is one inconsistency that stands out and someone with more knowledge than me would have to confirm if what is stated makes it enforceable or not.

 

They have given an example of interest payable as below:

 

This is based on £1500 balance at the start of the agreement being charged with the relevant purchases rate of interest repaid in equal installments. But they haven't stated what amount the installments would be as used in their calculation. So how can they accurately calculate this figure. They calculate the interest to be £83.06 for the year.

 

I set up a small spreadsheet to work this out:

 

 

I have used their scenario. £1500 opening balance. I have calculated the repayments as the minimum allowed i.e. 2% of the balance per month. Interest rate used is 0% for 6 months, then the monthly simple interest rate of 0.839% divided by 30 and reapplied to the monthly opening balace to the power of 30. This calculates the daily compound interest which is charged.

 

This only equates to £63.87 per annum and not £83.06!

 

They can't have applied interest all year or it would have amounted to over £135, so they must have allowed you the 6 months interest free. They have overquoted your annual interest by 30% (the difference between 63.87 and 83.06).

 

The only way they could have arrived at a figure greater than 63.87, is if they were not using the minimum repayments. However, if you were paying more than the minimum repayments, then the interest figure would have been even less. Surely they have not calculated the monthly repayments at less than the minimum required therefore encouraging you to break the terms of the agreement!

 

You may need to have some experts give their opinion on this like peterbard, pt2537 etc. I have sent a few PM's and hope they have a look.

[gh2008]

Hi DD

 

Thanks for looking, unfortunately you can solve the 'problem' by the following

 

 

However I am working on a theory regarding the calculations.

 

I would like comments on the rest of the document.

As far as I can see they would definitely need a Court Order to enforce, because of the lack of signature (or stamp, date - any mark by them)

Is this right?

 

Are there any other points re. form & content?

 

Thanks for looking

 

If it's of any consequence there's about £3200 outstanding £400 charges & loads of interest since the 2 Default Notices they sent me

 

gh

[duncan_disorderly]

Hi gh

 

I can see that now - they apply the standard rate over the whole year and ignore the special rate for 6 months. However, using your calculation, it is also easy for them to quote the 'regular installment'. Should they then not have to quantify that statement by stating 'repaid in equal monthly installments of £xx.xx'? This figure would have to be quoted in a fixed credit agreement.

 

Surely the idea being that a 'layperson' can look at the agreement and see what it is going to cost him each month?

[gh2008]

Quite agree, I'm an IT person & enjoy maths :o and I had to think about how to modify my spreadsheet to work it out.

 

On the right, I entered the monthly interest rate, then used Tools -> Goal Seek to get the end balance down to zero by modifying the monthly repayment.

 

Then on the left (in my normal APR spreadsheet) Goal Seek the red box at the end to equal the loan amount and it will calculate the APR

 

Still working on my theory it's good if I'm right it will cause a few headaches.

[car2403]

I don't think they need to sign/stamp it ect, as they clearly advanced the amount agreed - the statements will support this - so will make the agreement enforceable at best, enforceable with a Court order at worst.

 

It is missing the statement of remedies/protection under the Act, required under s.60, but again a Court can enforce by order.

 

If you can argue prejudice under s.127(1)(i), you may be able to avoid the Court order, however. Unlawful default with penalty charges contained within it would be one example? Do you have others that adds to your case?

 

It is dodgy, IMO, but it might just work depending on which Judge you get!

[gh2008]

Hi Chris

 

Thanks for looking in

 

This one is just at the Blair et al. huffing and puffing stage so I've got time to really get to grips with it.

 

I think I'm going to write back and point out that they have failed to fully comply with my request (no copies of documentation referred to in the agreement & no full statement of account - not even a balance!) and that they are now a the 12+2+30 stage.

 

They have sent 2 Default Notices Feb '06 and Nov '07, but the account remained open until I think Dec '07 with charges and interest added monthly.

 

TBH I would want to get a reasonably good case together before getting to the court stage as, I would prefer not to risk a CCJ at the moment until I've got a very clear understanding of my current financial situation.

gh

[gh2008]

Ok, I have checked a few definitions and I am quite happy that my theory may be right.

 

The agreement states

 

3.1 The total charge for credit is £83.06 consisting of £83.06 interest. This is based on credit of

£1500 being borrowed at the satrt of the agreement over one year at the standard interest rate for

purchases set out in condition 3.2 below and repaid in equal monthly instalments beginning one

month afer the start of the agreement.

 

Now that illustration is for borrowing £1500 at the start of the agreement borrowed over 1 yr.

 

There are 12 months in 1 year.

The illustration states that there are no payment due in the first month

So that only leaves 11 months for the balance to be repaid @ 143.9145 pcm

 

Put those figures into Dualcalc or an APR spreadsheet and the APR is 11.5% not 10.5% as stated

 

any thoughts please ........

 

Having just waited 10mins before posting this I'm not as pleased now as I was, I certainly don't think this is enough

[car2403]

I can't see how a credit example like this would be binding on them as a statement of the actual interest rate? I'm surprised it's even part of the agreement itself - this could mean the agreement is prospective under s.59, IMO? That aside, as the rate is stated, the prescribed term seems to have been satisfied, IMO.

 

Even if this example is binding, the regulations allows +1%/-0.1% variance in the APR anyway, which seems to cover this example.

[gh2008]

I can't see how a credit example like this would be binding on them as a statement of the actual interest rate? I'm surprised it's even part of the agreement itself - this could mean the agreement is prospective under s.59, IMO? That aside, as the rate is stated, the prescribed term seems to have been satisfied, IMO.

 

AFAIK It's included to satisfy the requirements of the Total Charge for Credit Regs

 

Even if this example is binding, the regulations allows +1%/-0.1% variance in the APR anyway, which seems to cover this example.

except IIRC the +/- range has been seriously reduced I think they now have to literally round up to 1 decimal place.

But if not then the +1% is if the quoted rate is upto 1% more than the actual, in my example above the quoted APR is 1% less than the actual.

 

IMHO their illustration is completely wrong - but hey ho it's not going to get me anywhere.

[gh2008]

If it was to end up in Court - what is the consequence of a Default Notice that is incorrect in both form and amount?

 

Is that enough to defend on - on the basis that if the Default was not correct in effect that means it doesn't exist as a Default Notice and without one they cannot demand early repayment, take court action etc.

 

just exploring scenarios

 

I can see them getting awkward with this as they defaulted me (well they thought they did) whilst in the middle of a PayPlan DMP without any missed payments etc. they just changed their minds about accepting reduced payments

[car2403]

1. Failure of a Default Notice or a Termination Notice to be accurate not only invalidates such Notice, (Woodchester Lease Management Services Ltd v Swain & Co NLD 14 July 1998) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, (Wilson v First County Trust, Wilson v Robertsons (London) Ltd [2006] EWCA Civ 1088, Wilson v Pawnbrokers [2005] EWCA Civ 147) but would also give the Claimant a claim for damages in the sum of £1,000. (Kpohraror v Woolwich Building Society [1996] 4 All ER 119)

 

That should be enough to get you thinking... looks like you're on to something there, if you can convince the Court this is right in your case, which should be easy as all this is binding anyway...

[gh2008]

That should be enough to get you thinking... looks like you're on to something there, if you can convince the Court this is right in your case, which should be easy as all this is binding anyway...

 

Of course - Doh !!!

 

Thanks Chris - God knows how many times I've read that paragraph over the past few weeks !!!

 

Ok, 1 last query (for the moment ) If a claimant issues a claim and that claim fails, can the claimant claim, on the same account again?

If they withdrew when Defence was filed

If it got struck out

If a Judge ruled against them.

any other circumstances?

 

I'm sure you know what I'm getting at here

 

This is all in the future - but I want to be prepared and very secure in my knowledge of the facts.

I'm also aware that I may need to not make too much fuss about certain irregular documents in the meantime

 

Thanks again

[car2403]

Ok, 1 last query (for the moment ) If a claimant issues a claim and that claim fails, can the claimant claim, on the same account again?

 

You generally can't bring a claim on the same grounds as one already dealt with.

 

If they withdrew when Defence was filed

 

Who withdrew? The claimant? No, discontinuance of a claim is final and another claim can't be brought on the same grounds as a discontinued claim.

If it got struck out

 

Same as above, but there is a chance you can ask for a order striking the claim out to be set aside, but that would prove difficult - depends why it was struck out in the first place, I suppose.

If a Judge ruled against them.

 

Against the claimant? I can't see how you can claim again - you could appeal, but that could be costly.

any other circumstances?

 

See above

 

I'm sure you know what I'm getting at here

 

This is all in the future - but I want to be prepared and very secure in my knowledge of the facts.

I'm also aware that I may need to not make too much fuss about certain irregular documents in the meantime

 

Thanks again

 

Hmmm... Sounds ominous

[gh2008]

well I was thinking of the following scenario

 

alleged debtor sends letter demanding all unlawful charges on the account to be returned with CI - but then not pursued further (IMO at this point the account is in dispute unless they, off their own backs, return all charges)

 

creditor thinks they have sent debtor all relevant info and cca is enforceable & issues a claim

defence submitted saying account in dispute and default invalid (and creditor knows because of the refund charges request) therefore pursuit of full repayment unlawful & cannot enforce in court

 

What I wouldn't want to happen is then a cheque refunding the charges together with a nice new fully compliant Default Notice arrives and 14 days later a new claim is issued.

 

Maybe I'm looking toooooo far off here and really should get on and make that cup of coffee i promised myself 30mins ago

 

 

still gets the brain cogs clunking

[car2403]

I'd say they can't default you twice on the same account, a default being a final method of enforcement - regardless of any Court involvement or not.

 

Even if the charges were refunded, they were still part of the default amount on the original, irrevocable notice. So, according to the authority I've already given, the debt becomes unenforceable against you - in theory at least - at that point and can't become enforceable again, as the Court is prevented from enforcing the balance in the future, regardless of the creditors behaviour either way.

 

This is a bit theoretical, as I still think a claim issued would be followed through - just because they are in default of a request under the CCA or had refunded charges applied already, wouldn't change they fact they can a claim against you, but will mean they shouldn't have.

[2Grumpy]

Your right to cancel

You have a short time to cancel ...

Hailifax will let you know later

 

Isn't that one of the required terms and is that wording valid? Until they send something (and it might be too late) you don't know how long you have to cancel, how to cancel ... so you don't cancel!

 

Grumpy

[car2403]

Isn't that one of the required terms and is that wording valid? Until they send something (and it might be too late) you don't know how long you have to cancel, how to cancel ... so you don't cancel!

 

Grumpy

 

If the agreement is cancellable, (probably is as it says it is) this suffices - however, they would need to show that they did indeed send you that notice of cancellation rights to prove they've complied with the Act/regs.

 

If they can't, they are in trouble.

[gh2008]

Ok I think my calculations in post #8 are wrong

 

I had assumed that their total charge for credit was right !!

 

The spreadsheet below shows what happens over a 1 year loan with no payments in first month & then 11 equal payment to clear the balance & adding interest, monthly at the rate as stated.

 

 

Now this makes the APR wildly out and the total charge for credit wrong

[duncan_disorderly]

Having looked at your first calculation, I think they would be able to show this to a judge to prove that the APR figure 'over the period of the loan' is correct. It seems that the only inconsitency is in their statement of the 'total charge for credit' for the 1st year because of the 11 month's payments rather than 12. Whether this is enough to mount a challenge, I don't know .

 

Can you use your calculator in reverse to see what the charge for credit should be based on the 11 monthly payments, leaving the APR figure as quoted on the agreement?

 

PS. I didn't receive your email

[gh2008]

Having looked at your first calculation, I think they would be able to show this to a judge to prove that the APR figure 'over the period of the loan' is correct. It seems that the only inconsitency is in their statement of the 'total charge for credit' for the 1st year because of the 11 month's payments rather than 12. Whether this is enough to mount a challenge, I don't know .

 

Can you use your calculator in reverse to see what the charge for credit should be based on the 11 monthly payments, leaving the APR figure as quoted on the agreement?

 

PS. I didn't receive your email

 

resent the email - if you don't get it PM me again

 

You can't leave the APR - the APR is calculated from the repayments, not the other way round. That's why quoting an APR is not really quoting the interest chargeable on the loan - especially when you look at examples like this. Same monthly interest, 11 monthly repayments (starting after 1 month) vs 12 months (starting after 1 month) = 10.5%

 

I know what you mean about the rates etc. But it does show that the little things, the way things are worded makes all the difference.

 

Loan over 1 year or repayments over 1 year very different outcome yet the same monthly interest rate.

 

Not sure how this is all going to work out, shame I couldn't get something more concrete but at least we all tried

 

gh

[car2403]

It's my understanding that the APR is required under the 2004 agreement regs, to be used as a method of comparing loans with other loans, but this is seperate from the requirement to have the interest rate stated as the prescribed term.

 

APR - used to compare loans like-for-like

Interest rate - used to show the actual rate of interest applicable

[gh2008]

It's my understanding that the APR is required under the 2004 agreement regs, to be used as a method of comparing loans with other loans, but this is seperate from the requirement to have the interest rate stated as the prescribed term.

 

APR - used to compare loans like-for-like

Interest rate - used to show the actual rate of interest applicable

 

I agree with you 100% for the reasons shown above, you cannot calculate interest on a loan accurately using APR alone.

 

APR was always designed to be a calculated term rather than a term for calculation IYSWIM

 

I do have another alleged debt where one of the points I will defend on (if necessary) is that there is only an APR quoted not a monthly/or yearly rate.

 

gh

[car2403]

I agree with you 100% for the reasons shown above, you cannot calculate interest on a loan accurately using APR alone.

 

APR was always designed to be a calculated term rather than a term for calculation IYSWIM

 

I do have another alleged debt where one of the points I will defend on (if necessary) is that there is only an APR quoted not a monthly/or yearly rate.

 

gh

 

Exactly where I'm at with HFC Bank, on this agreement;

 

http://www.consumeractiongroup.co.uk/forum/data-protection-default-issues/110146-car2403-hfc-bank-default.html#post1107155

[gh2008]

That's your confusing thread isn't it - I've sort of lost track of the HFC v you bit

 

Although yes, I can see what you mean. If you want I've got an old pdf of a document from 1980 looking into the calculations for APR and the fact that it is a calculated term derived from the interest rate applied.

 

PM me if you want it

 

gh