Egg credit card agreement terminated

[toymaker1]

it seemed clear cut and i expected my answer would have quickly disposed of the matter

 

Wow! At last, the perfect template letter - do you mind if I use this for my next letter to Egg?

[diddydicky]

[Guest HeftyHippo]

come on fellas, it was getting very good, educational and showing the potential problems Egg face if they try court.

 

Amex ended my account for no reason in the same way that Egg did, relying on a clause in the agreement, so the discussion here may have wider application.

 

Looking at another agreement, I saw a clause that said they could accept a payment in "full and final settlement" without losing their rights to the remainder of the balance.

 

It seems these non-nonsensical dream-land clauses could be/are quite common in agreements, and I wonder whether the inclusion of enough of them could potentially make the agreement non-complying with CCA1974, ie, could a judge decide that simply having the CCA required statements and info is not enough, that the rest of the agreement must also be sensible and in-line with the CCA? After all, what is the point of having a agreement with CCA clauses in it, if other clauses undermine those clauses (in a similar vein to what Toymaker said above)?

 

as for DDs 'perfect template letter', it may be worth trying with all creditors - it would probably confuse the hell of of 'em!

[toymaker1]

 

Looking at another agreement, I saw a clause that said they could accept a payment in "full and final settlement" without losing their rights to the remainder of the balance.

 

Such a term is clearly totally ludicrous and unenforceable.

It is logically not possible to accept a payment in full and final settlement but still purport to keep the right to claim the remainder of any balance not included within the full and final settlement payment.

[Hopster]

Where is DD's perfect template letter - please - what message number ? thx

[Guest HeftyHippo]

Such a term is clearly totally ludicrous and unenforceable.

It is logically not possible to accept a payment in full and final settlement but still purport to keep the right to claim the remainder of any balance not included within the full and final settlement payment.

 

in some circumstances I believe it is, but thats another argument. I'm simply making the point that a lot of these agreements contain clauses that are utter crap, and may/may not be contrary to the spirit of CCA1974.

 

That's why I think it's important to establish how to defeat them, by the regulating legislation eg CCA, S140 CCA2006 or other such as Unfair Terms regs UTCCR 1999 as was being discussed (very effectively and informatively) earlier

Edited March 10, 2010 by HeftyHippo

[toymaker1]

Where is DD's perfect template letter - please - what message number ? thx

 

It was a joke!

Posts 1221 and 1222.

[toymaker1]

in some circumstances I believe it is, but thats another argument. I'm simply making the point that a lot of these agreements contain clauses that are utter crap, and may/may not be contrary to the spirit of CCA1974.

 

That's why I think it's important to establish how to defeat them, by the regulating legislation eg CCA or other such as Unfair Terms as was being discussed (very effectively and informatively) earlier

 

Just to clarify, there is no "other" regulating legislation. In respect of credit card agreements, CCA 1974 as amended in 2006, and it's associated Regulations, which set out the specific formalities which creditors must follow in order to comply with the provisions of CCA 1974,is the legislation which covers every aspect of Credit Card agreements including unfair terms (or unfair anything).

Everything is in CCA 1974.

If only Egg understood that they would never have terminated 166,000 credit card accounts which were not in default.

[Hopster]

ok

[Guest HeftyHippo]

Just to clarify, there is no "other" regulating legislation. In respect of credit card agreements, CCA 1974 as amended in 2006, and it's associated Regulations, which set out the specific formalities which creditors must follow in order to comply with the provisions of CCA 1974,is the legislation which covers every aspect of Credit Card agreements including unfair terms (or unfair anything).

Everything is in CCA 1974.

If only Egg understood that they would never have terminated 166,000 credit card accounts which were not in default.

 

you might be right toymaker, I don't know because a lot of this is new to me and over my head a bit, but its possible there may be some other aspect of law that is applicable. The earlier exploration involving basa48 was very informative, but that debate seems to have died. Perhaps Basa will come back and add something else, or someone else will contribute and help our learning?

 

yes, CCA regulates these agreements, but other law also applies, like when a debt is sold, Law of Property Act 1925 comes into play. Who would have thought that?

 

Maybe in terms of when something is not explicitly covered by CCA, something else could come into play?

 

IMHO there are 2 ways of looking at what Egg did.

 

Either

 

the CCA only covers termination in cases of default or time bound credit, in which case you're governed by the agreement terms and whether they're fair and how they can be defeated

 

or

 

the CCA covers the only ways in which termination can be effected ie, in cases of default or in cases of time bound credit, and does not allow termination in other cases.

 

 

In the former, it would seem that clauses not governed by CCA can effectively undermine the protection given by the CCA. Eg an account in default must be given time to rectify and can only be terminated if rectification does not occur, whilst an account not in default is governed by the agreement clauses which may allow termination without warning - a strange situation where a correctly run account gets less protection than an errant one.

 

That may seem illogical and against the spirit of CCA, but maybe the authors of CCA didn't envisage the situation where a creditor would want to end a correctly run account? this reasoning though is contradicted by the fact that CCA allows time bound agreements to be ended when not in default.

 

 

In the latter, a creditor could argue that the CCA allows an account to be almost permanently errant, being continually in default but rectified before termination is allowed. They must be allowed to protect their business and therefore, because CCA does not explicitly address credit card accounts not in default, they are allowed to include terms designed to protect their business and cover the scenarios that CCA does not address.

 

from there, its a short leap that as long as the customer is not penalised, they should be allowed to close accounts when business needs dictate. In this instance, Egg allowed monthly payments to continue after closure on the same basis as before, therefore the customer was not penalised (except for not having a credit facility available to him). Therefore their termination clause

is not unfair and should be allowed.

 

Now, IMHO its better we address as many ways of looking at the situation as possible and not be blinkered into arguments that is must be unfair/not allowed, and also consider ways in which justification for their actions could be made, and how to defeat such justification.

 

In science, you don't attempt to prove something, you attempt to disprove it. you only need to disprove a theory once, and its forever gone, whilst if your experiments 'prove' something, you may simply be repeating other mistakes or getting the same results by coincidence. However, if you cannot disprove something, eventually you are left with the conclusion that with current knowledge, the assumption/theory/value is correct.

Edited March 10, 2010 by HeftyHippo

[cosalt]

Excellent post HH !

[toymaker1]

you might be right toymaker, I don't know because a lot of this is new to me and over my head a bit, but its possible there may be some other aspect of law that is applicable. The earlier exploration involving basa48 was very informative, but that debate seems to have died. Perhaps Basa will come back and add something else, or someone else will contribute and help our learning?

 

yes, CCA regulates these agreements, but other law also applies, like when a debt is sold, Law of Property Act 1925 comes into play. Who would have thought that?

 

Maybe in terms of when something is not explicitly covered by CCA, something else could come into play?

 

IMHO there are 2 ways of looking at what Egg did.

 

Either

 

the CCA only covers termination in cases of default or time bound credit, in which case you're governed by the agreement terms and whether they're fair and how they can be defeated

 

or

 

the CCA covers the only ways in which termination can be effected ie, in cases of default or in cases of time bound credit, and does not allow termination in other cases.

 

 

In the former, it would seem that clauses not governed by CCA can effectively undermine the protection given by the CCA. Eg an account in default must be given time to rectify and can only be terminated if rectification does not occur, whilst an account not in default is governed by the agreement clauses which may allow termination without warning - a strange situation where a correctly run account gets less protection than an errant one.

 

That may seem illogical and against the spirit of CCA, but maybe the authors of CCA didn't envisage the situation where a creditor would want to end a correctly run account? this reasoning though is contradicted by the fact that CCA allows time bound agreements to be ended when not in default.

 

 

In the latter, a creditor could argue that the CCA allows an account to be almost permanently errant, being continually in default but rectified before termination is allowed. They must be allowed to protect their business and therefore, because CCA does not explicitly address credit card accounts not in default, they are allowed to include terms designed to protect their business and cover the scenarios that CCA does not address.

 

from there, its a short leap that as long as the customer is not penalised, they should be allowed to close accounts when business needs dictate. In this instance, Egg allowed monthly payments to continue after closure on the same basis as before, therefore the customer was not penalised (except for not having a credit facility available to him). Therefore their termination clause

is not unfair and should be allowed.

 

Now, IMHO its better we address as many ways of looking at the situation as possible and not be blinkered into arguments that is must be unfair/not allowed, and also consider ways in which justification for their actions could be made, and of, how to defeat such justification.

 

In science, you don't attempt to prove something, you attempt to disprove it. you only need to disprove a theory once, and its forever gone, whilst if your experiments 'prove' something, you may simply be repeating other mistakes or getting the same results by coincidence. However, if you cannot disprove something, eventually you are left with the conclusion that with current knowledge, the assumption/theory/value is correct.

You must act according to what you think is correct.

[Hopster]

So - the question remains. Does the termination by Egg when the account is not in arrears mean that the agreement/debt is unenforceable ? No lengthy explanations please. Yes or No.

[cosalt]

So - the question remains. Does the termination by Egg when the account is not in arrears mean that the agreement/debt is unenforceable ? No lengthy explanations please. Yes or No.

 

As a direct reply to your question - no

[Hopster]

Not what i was looking for but thanks for your message..........................

[cosalt]

Well you asked for an answer with no explanation.....

[toymaker1]

So - the question remains. Does the termination by Egg when the account is not in arrears mean that the agreement/debt is unenforceable ? No lengthy explanations please. Yes or No.

 

As a direct answer to your question, yes.

[BEC01]

So - the question remains. Does the termination by Egg when the account is not in arrears mean that the agreement/debt is unenforceable ? No lengthy explanations please. Yes or No.

 

A direct answer, yes.

It no longer exists, therefore cannot be enforced.

[cosalt]

I disagree, how can an agreement that no longer exists be enforcable or unenforcable? Unenforcable means the agreement exists and so does the balance outstanding, but the terms can not be enforced therefore the balance never gets paid

[diddydicky]

So - the question remains. Does the termination by Egg when the account is not in arrears mean that the agreement/debt is unenforceable ? No lengthy explanations please. Yes or No.

 

first of all you need to establish what the words "terminate" and "Agreement" mean

 

start from the base that unless the CCA dictates otherwise, then the normal everyday meaning of the words will apply,

 

Ok to save you some time the CCA does not allocate any meaning other than in normal useage to these two words

 

now,imagine you are Egg and apply the normal useage of the word "terminate" to the normal useage of the word "agreement" (to the credit agreement that has been made between Egg and its customer)

 

that is to say "I Egg, "terminate" the "agreement"

 

next, having " terminated" the "agreement"- and given that you understand these words to have their normal meanings.........................

 

explain to everyone else how you ( Egg) can subsequently "Enforce" the "agreement" that you have previously "terminated", or how any of the "terms and conditions" that formed part of that "agreement" can subsequent to your "termination", have any effect or be capable of being performed by either party to the agreement

 

wallah- there's your answer- you are just as easily capable of working it our for yourself as anyone else!!

[Hopster]

2 Yes - 1 No - so far.

[diddydicky]

As far as ending a running account agreement that is not in default is concerned

 

OF COURSE either party can (and should be able to) terminate the agreement at any time

 

if the debtor decides to cancel it he can either:_

 

not use the card anymore and continue making the contracted payments until the balance is cleared and then never use the account again (in other words he continues to perform his obligations under the agreement)

 

OR

 

he can immediately pay to the creditor the outstanding balance of the account and then tell the creditor he is terminating the agreement

 

The CREDITOR has the same right to decide that he no longer wants the agreement to continue. and he can either:-

 

 

Advise the debtor under s87(d) that he is restricting further use of the card and then continue to "perform" his obligations under the agreement for any sums already on the account- that is to say to allow the debtor to carry on enjoying the benefit of paying sums not yet due under the account

until such time as the existing debt is repaid.

 

OR

 

he can tell the creditor he is terminating the agreement and demand immediate repayment of any outstanding balance on the account - in which case he then acts unlawfully and is in breach of contract.

 

If, EGG had issued notices RESTRICTING further use of the accounts, (by issuing a notice under s87(d) rather than saying it had TERMINATED them- then , and presuming that they continued to perform their obligations until such time as the accounts were paid off in the normal course of events - then their actions would be Ok (IMO)

Edited March 10, 2010 by diddydicky

[cosalt]

then i would argue that Egg acted correctly and i would not understand where any of the debtors would have been out of pocket or disadvantaged

 

I was disadvantaged because effectively I lost the ability to use my credit card and it was turned into a personal loan at 15.9% apr. And all done despite me having done nothing wrong.

[cosalt]

ok, I see you have edited !

[Guest HeftyHippo]

Excellent post HH !

 

Thanks, although Toymaker obviously didn't think so!

 

Toymaker - whatsupp? you were keen to argue the merits of your argument with Basa, why not produce a more informative and eloquent response to my argument?

 

Being sure you're correct and being able to convince an independent judge are different things. What you going to do if opposing Counsel come up with an argument like mine, and says that the law must reflect contemporary economic conditions, not those of 1974, and that in 1974, unsustainable debt was never forecast, but in 2009, many many consumers had debts they couldn't manage, global financial markets were vastly different from those of yesteryear, the effects of recession in overseas countries were felt worldwide, and businesses were under much more pressure than ever before and credit businesses had to protect themselves from unprofitable accounts that the CCA had never predicted, as well as the bad debts and errant accounts that it had predicted when it was drafted, and the ability to terminate without disadvantaging account holders was vital to keeping a business solvent? Will your response to the judge be "oh well Judge, you must decide as you see fit", or will you have a better answer?

 

The case may not simply be decided on the basis of whether the CCA allows termination without default, but perhaps whether termination without default is justified, and in what circumstances.

 

If you doubt that, consider how the CCA deals with agreements as a whole. The creditor must supply one if asked and cannot enforce without one. Except now, a creditor can 'reconstitute' an agreement, and can not only press for payment without the original agreement, he can mark your credit file and take court action because enforcement "does not include taking court action". It doesn't make sense to me, and seems to contradict the CCA, and I hope after your court case I won't say the same about the decision you got, because it won't only be you that's screwed, it'll be a lot of others as well.

 

Believe it or not, we're on your side, and considering all the angles can only benefit your case, and that includes considering arguments totally removed from the CCA and whether it does or does not allow termination without default. After all, the CCA doesn't deal with sales of debts, thats the Law of Property Act. What a shame if Counsel bowled you a similar googly and sidestepped your argument about the CCA...