C.C.A. turned up after 12 months???

[photoman]

Originally Posted by Tinkerbell20 This agreement is unenforceable. Can you update where you are with this?

 

Hi Tinkerbell20,

Just wondering why you think this agreement is unenforceable?

 

 

I agree with this view on these grounds.

 

The agreement should really be deemed unenforceable, due to the fact that it is a "multiple agreement".

The jist of the argument in respect of contesting the validity of the agreement under the terms of of "multipe agreements" are as follows:

 

(With acknowledgment to PT2537, who originally posted this)

 

Quote (by PT):

 

Ok so what does this mean, well, lets say you borrow £6000 from Nasty Banking Corp, the loan is for you to use as you like and therefore you would have fixed sum credit See s10 (1)(B) CCA, unrestricted use credit See s11 (2) CCA and finally it would be a debtor-creditor agreement as defined within s13 CCA

 

Now if you add PPI to the loan, this changes things slightly, why? Well in my view if you borrow £6000 from Nasty Banking Corp and then you add a PPI policy for example adding another £1500 of credit you are turning it into a multiple agreement

 

The PPI is fixed sum credit as set out in section 10 CCA but it is not unrestricted use, instead its restricted use credit ( See s11 CCA) as you do not have any say over its use, it is in effect only credit for the purchase of the PPI policy and additionally it is a debtor-creditor-supplier agreement as it would be undoubtedly underwritten by another specialist insurer and not the creditor and therefore it falls within the definition given in section 12 CCA

 

So in effect what we have with the £6000 loan and the £1500 PPI is a multiple agreement with “part of it within one category of agreement mentioned in this Act, and another part of it within a different category of agreement so mentioned, or within a category of agreement not so mentioned”

 

This is because the £6000 is fixed sum, unrestricted use debtor creditor and the £1500 is fixed sum, restricted use Debtor-creditor-supplier

 

Therefore since this type of agreement falls within s18, it means that as defined in s18 (2) CCA that the document is to be treated as 2 separate agreements and each agreement must have its own prescribed terms for each part

 

Therefore each piece of credit must have its own term stating the amount of credit, repayments and all other statutory info, in addition the PPI policy would need to have a term stating the Cash Price of the policy, due to it being a restricted use debtor creditor supplier agreement.

 

In essence there should be the following

 

Loan

 

Amount of Credit £6000

Repayments 60 payments of £XXXXXX

Total amount payable £XXXXXXXX

 

APR 16.9%

 

 

 

PPI

 

Amount of credit £1500

Repayments 60 payments of £XXXXXXX

Total amount payable £ XXXXXXXXX

 

Apr 16.9%

 

Cash price of policy £1500

 

 

the agreement may not be set out exactly as above but that is to give you an idea of what it must contain

 

 

If the agreement fails to correctly set matters out in accordance with s18 then the lender risks falling foul of the form and content requirements of section 60 CCA and could be improperly executed as set out within section 61(1) (a) CCA 1974 thus becoming unenforceable

 

the main thing to remember is that you have two agreement within one document, so there must be a set of prescribed terms for each piece of credit, it is permissible to add the prescribed terms together and then state them as total amounts BUT they must be also stated in their separate parts.

 

Here is the link to PT's thread on this matter:

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html

 

 

PM

[photoman]

In laymans terms.

 

The loan consists of 2 separate loans.

 

The first is the loan of the money for your own use, as you wish.

 

The second loan is for the insurance, which is and can only be used for the insurance.

 

This means, that as part of the loan is for an unrestricted use, and the other part is only for a restricted use, then it is a "multiple agreement".

 

Under law, any such agreement must make clear how the interest, and the repayments of each separate part have been calculated.

 

It is not permissible for the lender to simply lump the two parts together, THEN add interest, THEN split it into repayments.

 

The loan part must be laid down, with the interest that will be payable on such then listed, then the installments for such listed.

 

Then SEPARATELY, the PPI loan must be listed in the same manner, ie: the amount of credit for the PPI, the interest payable on such, and the installments payable for such.

 

Have a read of PT's thread, and see if you can use this.

 

I don't know if you can appeal the judgement that it appears has already been given, or whether you will need to appeal it separately o these grounds.

 

I'm sure someone (perhaps PT) will be able to advise on this point.

 

Best regards.

 

PM

[photoman]

Hi PT,

 

Any comments on the multiple agreement aspect ?

 

is it applicable in this case, and can it still be used at this stage ?

 

PM

[photoman]

They are now threatening me with court action - here is a copy of my CCA that they sent me 12 months after I requested it:

 

 

 

THE ORIGINAL AGREEMENT IS UNENFORCEABLE !!

 

It has been incorrectly executed, as it has been drafted up incorrectly.

 

The PPI has simply been added onto the loan amount to create a total loan figure. Then this sum total has been used as the basis for calculating the monthly installments.

 

THIS IS WRONG, and so it is unenforceable !!

 

This is because the agreement is for TWO separate agreements (loans):

 

The first being an agreement for the loan to buy the goods.

 

The second being an agreement for a loan to pay the PPI.

 

In such circumstances the loan document should be laid out in such a manner as to demonstrate what the constituent parts of the total monthly figure are.

 

It should NOT be simply drafted to lump the two amounts together as one loan, with the monthly payments then shown.

 

This is because it is a multiple agreement falling under section 18 of the CCA74.

 

See here:

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html

 

Therefore each piece of credit must have its own term stating the amount of credit, repayments and all other statutory info.

 

In essence there should be the following

 

 

eg:

 

Loan

 

Amount of Credit £1000

Repayments 120 payments of £XX

Total amount payable £XXXX

 

APR 26.9%

 

 

PPI

 

Amount of credit £139.49

Repayments 120 payments of £XX

Total amount payable £ XXX

 

Apr 26.9%

 

 

 

This all means that the original agreement is unenforceable as it stands, and so under section 127 of the CCA. It CANNOT even be enforced by a court.

 

IMHO, This also means that the second PPI policy taken out later, is also unenforceable; as it was a policy taken out to insure against an agreement that was itself void and unenforceable.

 

You may need to amend your defence to make some declarations upon these grounds ?

 

 

Such defence should be based upon the following contentions:

 

1/ The loan is unenforceable, as it has been improperly executed by virtue of the fact that as is defined by section 18 of the CCA74 the loan was a "multiple agreement".

 

2/ Therefore as a multiple agreement, each part of the agreement should be clearly defined and executed in the manner defined by section 61(1) of the Consumer Credit Act 1974.

 

3/ As it is not properly executed then Section 65 says that it can only be enforced by a court.

Quote:

65.--(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

4/ However, the Court's powers to enforce an agreement that is not properly executed (and that was entered into before 2006) are limited by Section 127(3) of the Act.

Quote:

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

(a) Section 65(1) (improperly executed agreements)....

 

(3) The court shall not make an enforcement order under Section 65(1) if Section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under Section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner)

 

The prescribed terms for enforceability under s127(3) are given in Schedule 6of the Consumer Credit (Agreements) Regulations 1983:

 

In all cases, each agreement must contain:

 

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

(a) number of repayments;

(b) amount of repayments;

© frequency and timing of repayments;

(d) dates of repayments;

(e) the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable.

 

5/ The total loan amount in this case therefore consists of two separate and distinct agreements: One for the principal loan of £1000, and another agreement for a loan of £139.49 for a PPI policy. As such each section should have clearly had its own prescribed terms. This is clearly not the case in this agreement.

 

 

 

PM

[photoman]

Goldlady,

 

Looks pretty good, and well done, but before you proceed can you clarify a couple of points for me here?

 

1/ Who actually provided the initial ppi policy?

I know that First National provided a loan to pay for it, but was the policy actually provided by themselves or by another party (eg: AXA etc).

 

2/ How was the money for the purchase of the goods provided?

Was it paid directly to the store, or was it paid into the lenders account or paid as a cheque to them etc?

 

I've also been doing some more thinking on the multiple agreements issues, in light of the debate on the multiple agreements thread, have you had a look at the thread yourself, it's a hotly debated subject... and although it's a VERY long thread, I'm sorry to say I think you should have a read through it.

 

PM

[photoman]

Oh, and the money was paid direct to the contractor - it says so in their witness statement.

 

 

Okay,

 

The reason I am asking these questions is in order to make certain that the agreement is a "multiple" agreement.

 

If you read the thread on the subject, you will note that an agreement becomes a multiple agreement if it falls within two different categories of credit.

 

 

The different categories of credit are defined in sections 8-15 of the CCA 1974:

 

1. 'Personal credit agreement' or 'Consumer credit agreement' (Section 8 )

2. 'Regulated agreement' or 'Exempt agreement' (Section 8 )

3. 'Hire purchase agreement' (Section 9)

4. 'Running account credit' (eg credit card, overdraft) or 'Fixed sum credit' (eg bank loan) (Section 10)

5. 'Restricted use agreement' (eg PPI, car purchase) or 'Unrestricted use agreement' (eg cash loan) (Section 11)

6. 'Debtor-creditor-supplier agreement' (eg PPI) (Section 12) or 'Debtor-creditor agreement' (eg cash loan) (Section 13)

7. 'Credit token agreement' (eg credit card) (Section 14)

8. 'Consumer hire agreement' (Section 15)

 

 

SO:

 

In this particular case:

 

The main loan was:

 

1/ "Regulated",

2/ "Consumer Credit agreement",

3/ "Restricted use"

4/ 'Debtor-creditor-supplier agreement'

 

.. and as such needed to have the required terms for each category.

 

These required terms are:

 

1/ - A term stating the amount of the credit

 

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

(a) number of repayments;

(b) amount of repayments;

© frequency and timing of repayments;

(d) dates of repayments;

(e) the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable.

 

 

Then:

 

The PPI.

 

This was:

 

1/ "Regulated",

2/ "Consumer Credit agreement",

3/ "Restricted use"

 

Then here we need to determine if it was,

4/ 'Debtor-creditor-supplier agreement' or a 'Debtor-creditor agreement' .

 

ie: was the PPI policy actually provided by First National, or was it provided by another insurer, with First National simply providing the funds for it.

 

If the former (PPI provided by First National) then it was a 'Debtor-creditor agreement'.

If on the other hand it was provided by another insurer it would be 'Debtor-creditor-supplier agreement'

 

This could be useful in then shoring up the multiple agreement aspect.

 

If it was a 'Debtor-creditor agreement' then we are in a better position, as it would certainly make the PPI a different agreement.

If on the other hand it was a "Debtor Supplier Creditor agreement" then they may be able to argue that it fell into the same categories as the main loan...... although the act is a bit ambiguous in whether or not in such circumstances as when there is more than one supplier each loan is a separate agreement?

To my mind in such circumstances then (if more than one supplier) then each loan should be considered a being separate, and thus itemised as such.

This is because the true underlying intention of section 18 is to allow the borrower to see what exactly they are paying under each agreement,and to whom, and to prevent a lender from rolling more than one agreement into one.

 

 

So.... any way to find out who actually provided the PPI ?

 

Were any documents or agreements received from a third party insurance company after the loan was underway?

 

If not, then it could reasonably be presumed that First National provide the insurance?

 

However, it would be good to be able to determine this for sure.

 

So any way to find out ?

 

If necessary this may require a call for disclosure under the CPR rules, which I believe you are entitled to do, as there is a case underway.

 

I think it would come under the scope of part 31 of the CPR rules

 

See here:

 

PART 31 - DISCLOSURE AND INSPECTION OF DOCUMENTS

 

but maybe check and get some advice on this ?

 

 

PM

[photoman]

My understanding of the situation is this:

 

Please confirm each statement?

 

1/ Bigal took out a loan for £1000 with First National.

 

2/ £575 of this was paid DIRECTLY to another company for the goods.

 

3/ £425 was paid DIRECTLY by cheque to bigal by First National (NOT paid to him by the goods supplier).

 

4/ The Insurance premium of £139 was paid DIRECTLY for the insurance by First National (ie: Bigal never received this himself).

 

5/ He can produce statements that show monthly payments of £24.08.

 

 

If all the above is true, then because of the cash payment to bigal, this changes everything.

 

This is because the loan for the goods, and the cash advance fall into separate categories, so it was a multiple agreement falling under section 18 of the CCA, and as such each part should have been treated as a separate agreement.

 

They were:

 

1/ The loan for £575:

This was: "Debtor-creditor-supplier" & "Restricted Use".

 

2/ The cash advance of £425:

This was "Debtor creditor" & "Unrestricted Use"

 

Instead, it was a contract containing 2 separate agreements bundled into one.

 

As we can now prove that each part of the loan was a separate agreement, then each separate agreement must then contain and comply with the prescribed terms required under schedule 6 the Consumer Credit (agreements) regulations 1983.

 

They are:

 

1/ - A term stating the amount of the credit

 

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

(a) number of repayments;

(b) amount of repayments;

© frequency and timing of repayments;

(d) dates of repayments;

(e) the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable.

 

 

IT DOES NOT show these terms for each separate agreement.

 

So, IMHO, yes I would defend it on the basis of it being an improperly executed multiple agreement, and as such each part does not comply with section 61 of the CCA, thus making it irredeemably unenforceable under section 127.

 

I would also not be too concerned with the Heath case causing an issue.

 

From what I gather of that case, the loan companies barrister used the argument that all the loan was actually "unrestricted" use, so it did not fall into different categories, and so was not a multiple agreement.

They did this by contending that as the part of the loan that was to be used for repaying an outstanding mortgage was paid via a solicitor, then these sums could in theory still have been used for another purpose, leaving them free to use such sums in an unrestricted manner.

 

The circumstances in this case are quite different.

 

I is a flawed ruling, on a flimsy assumption, and is going to appeal anyhow.

 

I would however still try to read the case yourselves though, so as to understand the issues, and be ready to counter any attempts by the OC to try to use it as a defence.

 

Note;

 

In order to use the defence I have outlined here you must be really sure:

 

1/ That bigal never actually received the £575 at any point himself, and that it went directly from First National to another party (Advanced Fascia).

 

2/ That he also did himself actually receive the £425 directly from First National (ie: not received it via advanced fascia).

 

This would then definitely put the two sums into 2 categories as outlined above:

 

 

 

You should now have a read of some of the other claims in the debt forum, and seek out some wording for how to put this all across.

[photoman]

Well done, good news is in the pipeline on this I believe !!

 

I don't imagine the other to side complying with his requests, and even if they do he just seems to dislike this agreement, and the extortionate charges on several other grounds anyhow.... so I suspect claimant will realise this, and now just write things off.

 

Certainly does look like the judge was pro consumer (wonder what his CAG name is) ??

 

I also agree with PT, that the judges opinion on multi agreements is incorrect.

....so even if they do comply (not likely),

.....and even if he does then concede that all procedures and documents are valid.

....and doesn't hang them on the charges, the format of the agreement, and the disregard for procedure in assignment.

....and he till maintains sec 18 not applicable.

 

Then IMHO you would have grounds for appeal anyhow.

 

regards

 

PM

[photoman]

Ok thanks, although you would think if the agent was in his house he would have the cancellation rights with him???

 

I can't recall the exact section of the regs, but I believe handing over at the point of sale s not permitted, and instead the proper course of events, with separation of documents at differing times is prescribed and has to be done in such a way.

This is so that there is made available a genuine cooling off period for the lender, and to also distance the creditor from having any opportunity to exert undue influence at the point of sale.

[photoman]

A note:

 

I was under the impression you only signed and returned the cancellation rights doc if you wanted to cancel?

 

Got me all flummoxed e' as!

 

Yes,

 

You do only need return the documents (or send some notice) if you later change your mind, and you wish to then cancel the loan.

 

But, it is a statutory requirement that you DO actually receive such a notice, indicating; your right to cancel, how and when to do so, and who to do so to.

 

 

 

In such a case as bigals (ie: the agreement was presented personally) the right to cancel notice must be:

 

a/ Given to him at the time of signing.

 

AND

 

b/ Also another copy sent out within 7 days after the event of the in person signing.

 

 

 

 

To paraphrase the relevant portions of the CCA74 act ...

 

 

64 - Duty to give notice of cancellation rights

(1) In the case of a cancellable agreement, a notice in the prescribed form indicating the right of the debtor or hirer to cancel the agreement, how and when that right is exercisable, and the name and address of a person to whom notice of cancellation may be given,—

....

(a) must be included in every copy given to the debtor or hirer under section 62 or 63, and

 

(b) ...... must also be sent by post to the debtor or hirer within the seven days following the making of the agreement..

 

Section 64 then goes on to say....

 

(5) A cancellable agreement is NOT properly executed if the requirements of this section are not observed.

 

 

 

 

Then section 65 says:

 

 

65 Consequences of improper execution

 

(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

...

 

 

 

 

and then finally, section 127 then says:

 

 

127 Enforcement orders in cases of infringement

 

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

 

(a) section 65(1)(improperly executed agreements),

...

 

(4) The court shall NOT make an enforcement order under section 65(1) in the case of a cancellable agreement if—

...

 

(b) section 64(1) was not complied with.

 

 

 

 

....In short:

 

Because a copy of the cancellation notice was NOT sent to bigal within 7 days of his personally signing the agreement ..... then the agreement was NOT properly executed ..... thus it could ONLY be enforced by a court..... BUT ... because of section 127, then even a court could NOT enforce it !!

 

 

 

 

PM

Edited March 18, 2009 by photoman