Egg credit card agreement terminated

[diddydicky]

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.

 

losing the ability to "use your credit card" might be inconvenient but you can no more force the creditor to offer you enduring credit facilities than he can force you to keep using the card

 

 

it might not even be anything to do with you- it could be that the creditors own ability to raise finance (a commercial decision) forced them to cut back their "exposure"

 

you would not have been disadvantaged had the creditor allowed the agreement to run until its natural end- and YES if your loan was converted to something that you did not agree to under the agreement - you would have been disadvantaged

[diddydicky]

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?

then i suspect the creditor would be in a similar position to British Gas who signed contracts for the supply of gas up to 20 years in advance and then later found due to economic conditions it could no longer be competetive..............in which case, if it could not come to a MUTUAL agreement with its suppliers then it was tough titty-

there is no legal basis for changing economic conditions being used to vary the terms of a contract or agreement unless all parties to the agreement agree to do so

[cosalt]

losing the ability to "use your credit card" might be inconvenient but you can no more force the creditor to offer you enduring credit facilities than he can force you to keep using the card

 

 

it might not even be anything to do with you- it could be that the creditors own ability to raise finance (a commercial decision) forced them to cut back their "exposure"

 

you would not have been disadvantaged had the creditor allowed the agreement to run until its natural end- and YES if your loan was converted to something that you did not agree to under the agreement - you would have been disadvantaged

 

So you believe egg were within their rights to 'terminate' my agreement

[diddydicky]

So you believe egg were within their rights to 'terminate' my agreement

 

no, i said the OPPOSITE- they terminated - unlawfully

 

what i said was (based on the limited knowledge i am being fed) is that

 

IF

 

they had simply wanted to restrict further credit and allow agreements to expire naturally

 

then they went the wrong way about it

 

they TERMINATED when they should have RESTRICTED the accounts

 

 

In was unaware previously that when they terminated these accounts they had actually continued to perform in the normal way and allowed people to carry on making monthly payments

 

However, as this was an |UNLAWFUL termination and the customers continued making regular monthly payments- then IMO they actually rejected the unlawful termination and perpetuated the agreements by continuing to perform under them

 

it would seem to me therefore that anyone still paying under these agreements do not in fact have terminated agreements!!

IMO

[toymaker1]

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

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

 

I'm afraid I do not agree with you. CCA clearly allocates precise meanings to the terms:-

consumer credit agreement

credit-token agreement (i.e. a credit card agreement)

regulated agreement (i.e. an agreement regulated by CCA 1974, for example a credit card agreement)

executed agreement

unexecuted agreement

See Sections 8, 14, and 189 of CCA 1974 and 2006 Explanatory Notes To CCA.

Also, S14 of the 2006 Explanatory Notes to CCA clearly describes the meaning of termination (by a creditor). It says that termination is when a creditor ends an agreement by giving the debtor a default notice in the prescribed form. Termination by a creditor is not defined in any other way.

[cosalt]

Forgetting all of this, its the best part of 2 years since all this happened and as far I am aware no one has been taken to court by egg over this. Surely this should tell us something?

 

Personally I have not paid egg anything since late 2008 and have not heard anything from them or their dca's around a year.

[cosalt]

no, i said the OPPOSITE- they terminated - unlawfully

 

what i said was (based on the limited knowledge i am being fed) is that

 

IF

 

they had simply wanted to restrict further credit and allow agreements to expire naturally

 

then they went the wrong way about it

 

they TERMINATED when they should have RESTRICTED the accounts

 

 

In was unaware previously that when they terminated these accounts they had actually continued to perform in the normal way and allowed people to carry on making monthly payments

 

However, as this was an |UNLAWFUL termination and the customers continued making regular monthly payments- then IMO they actually rejected the unlawful termination and perpetuated the agreements by continuing to perform under them

 

it would seem to me therefore that anyone still paying under these agreements do not in fact have terminated agreements!!

IMO

 

Ok so what you are saying is, its not what they did but the way they did it.

 

I'll agree with that !

[diddydicky]

I'm afraid I do not agree with you. CCA clearly allocates precise meanings to the terms:-

consumer credit agreement

credit-token agreement (i.e. a credit card agreement)

regulated agreement (i.e. an agreement regulated by CCA 1974, for example a credit card agreement)

executed agreement

unexecuted agreement

See Sections 8, 14, and 189 of CCA 1974 and 2006 Explanatory Notes To CCA.

Also, S14 of the 2006 Explanatory Notes to CCA clearly describes the meaning of termination (by a creditor). It says that termination is when a creditor ends an agreement by giving the debtor a default notice in the prescribed form. Termination by a creditor is not defined in any other way.

 

with respect that is not assigning a special meaning to either of the words- more the effect

 

termination = ends, finishes, - normal useage

 

agreement- a concord between parties - common ground between parties- lots of normal everyday definitions none of which are altered in the CCA

 

you cannot terminate something and thereafter perpetuate its continuation- it either ended or it did not

 

it is a contradiction in terms

 

i really do think some of you are getting TOO technical-

[diddydicky]

Ok so what you are saying is, its not what they did but the way they did it.

 

I'll agree with that !

 

well yes- if I understand correctly

 

they tried to do one thing- but managed by mistake to do something entirely different- and didn't even do that properly

[diddydicky]

ok, I see you have edited !

 

my fingers got in front of my brain:D

[Hopster]

Me too. WE must keep in touch. Where are you ?

[basa48]

Sorry folks, I cannot post to this forum from my work due to restrictions on works PCs. I can only post after 21:00hrs.

 

The CCA 1974 is just one of many Acts covering many aspects of contract law. CCA 1974 is specific to consumer credit and is the main regulating instrument. However there are other common law principles established by case law that can apply, especially where the CCA is silent as in this Egg termination question.

 

Also Egg could have easily restricted the use of the credit facility even without recourse to s87(d) (which I'm not convinced applies anyway). All they needed to do was each month reduce your credit limit to equal to the outstanding balance. The primary prescribed term under the Regs is to 'state the credit limit or how it may be determined', and in the T&Cs 'we may vary your credit limit from time to time and write to advise you' - or some such.

 

Simples.

[basa48]

losing the ability to "use your credit card" might be inconvenient but you can no more force the creditor to offer you enduring credit facilities than he can force you to keep using the card

 

 

it might not even be anything to do with you- it could be that the creditors own ability to raise finance (a commercial decision) forced them to cut back their "exposure"

 

you would not have been disadvantaged had the creditor allowed the agreement to run until its natural end- and YES if your loan was converted to something that you did not agree to under the agreement - you would have been disadvantaged

 

The WHOLE point of the agreement was that they supplied a constant line of credit so long as you paid it back in the agreed manner. Of course the debtor is disadvantaged.

 

Who would sign up to a credit card if they knew that at any time the lender could say NO MORE for no good reason!

[toymaker1]

CCA 1974 is specific to consumer credit and is the main regulating instrument. However there are other common law principles established by case law that can apply, especially where the CCA is silent as in this Egg termination question.

 

CCA is not silent regarding this Egg termination question.

For example, S14 of 2006 Explanatory Notes to CCA 1974 says very clearly that:-

 

S87 of CCA requires a creditor to give the debtor a default notice if he (i.e the creditor) wishes to terminate the agreement.

 

I dont think it is possible to put it more clearly than that. There is no ambiguity.

[toymaker1]

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

[basa48]

CCA is not silent regarding this Egg termination question.

For example, S14 of 2006 Explanatory Notes to CCA 1974 says very clearly that:-

 

S87 of CCA requires a creditor to give the debtor a default notice if he (i.e the creditor) wishes to terminate the agreement.

 

I dont think it is possible to put it more clearly than that. There is no ambiguity.

 

How can the creditor issue a default notice to a non defaulting debtor?? That is my point - that s87 doesn't apply to non defaulted accounts, he can't use it.

 

Besides Egg didn't cite 87 or 76 or 98 nor the Act at all. There is nothing in the Act about non default termination (except fixed term loans).

[basa48]

 

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

 

IMO no not 'terminate' or 'end' but they should be able to 'restrict'.

 

Egg ended the agreement they didn't restrict its use.

 

Ending or terminating a contract (except in the case of a breach) requires mutual agreement. Eggs termination was unilateral and unequivocal.

Edited March 10, 2010 by basa48

[diddydicky]

How can the creditor issue a default notice to a non defaulting debtor?? That is my point - that s87 doesn't apply to non defaulted accounts, he can't use it.

 

Besides Egg didn't cite 87 or 76 or 98 nor the Act at all. There is nothing in the Act about non default termination (except fixed term loans).

 

yes i concede that 87(d) would be the right track with regard to restricting credit IF there was a breach

 

for non breach the creditor would simply need to fall back on the terms included in the agreement and restrict future use of the card- but would NOT be entitled to repudiate his obligations to allow the debtor to carry on making monthly payment of those sums not yet due

[basa48]

yes i concede that 87(d) would be the right track with regard to restricting credit IF there was a breach

 

for non breach the creditor would simply need to fall back on the terms included in the agreement and restrict future use of the card- but would NOT be entitled to repudiate his obligations to allow the debtor to carry on making monthly payment of those sums not yet due

 

Egg didn't repudiate any of the debtors obligations to repay, in the letter or T&Cs, quite the opposite; it was a condition that repayments continued until the balance was fully repaid.

 

This whole argument is about one word (well two actually but they mean the same). That word was 'end' (or terminate).

[diddydicky]

The WHOLE point of the agreement was that they supplied a constant line of credit so long as you paid it back in the agreed manner. Of course the debtor is disadvantaged.

 

Who would sign up to a credit card if they knew that at any time the lender could say NO MORE for no good reason!

 

EVERYONE - because there is a term in EVERY credit card agreement which says that the creditor can restrict the use of the card, indeed one of the prescribed terms (which we so often bleat about not being on the agreement) is that they may set the credit limit from time to time as they see fit

 

for a cagger to argue passionately that he knows all about the prescribed terms in one breath and then when i suits- to pretend that he thought the credit card and credit limit were "forever" in another argument would be a tad hypocritical in my view

[toymaker1]

How can the creditor issue a default notice to a non defaulting debtor??

 

Read S14 of the Explanatory Notes very carefully.

For example,

it doesn't say that S87 only relates to termination as a consequence of the debtor defaulting.

And it doesn't say that termination as a consequence of the debtor defaulting is one of various methods which can be used by a creditor to terminate an agreement.

And it doesn't say that a creditor may take into consideration commercial factors in deciding to terminate an agreement.

And it doesn't say that a creditor can terminate an agreement at any time.

What is does say is deceptively simple, in the very clear and

unambiguous and powerful statement that:-

Section 87 requires a creditor to give the debtor a default notice if he IF HE WISHES TO TERMINATE THE AGREEMENT.

(NOT if he wishes to terminate the agreement because the debtor has defaulted).

 

If a creditor does not default, and does not wish to terminate the agreement by paying back all the money he has borrowed, then the agreement continues into perpetuity.

[diddydicky]

Egg didn't repudiate any of the debtors obligations to repay, in the letter or T&Cs, quite the opposite; it was a condition that repayments continued until the balance was fully repaid.

 

This whole argument is about one word (well two actually but they mean the same). That word was 'end' (or terminate).

 

yes i agree- it would seem as i said earlier that they used the word terminate when it would appear that all they wanted to do was "restrict" further borrowing

 

not having ever had an egg card i do not know if they had a term allowing them to do so- but i do know in 99% of all other agreements- that term is there and to my mind is not an unreasonable or onerous term

 

directors of limited and plc's have very stringent limitations on their trading activities which if they are in breach could be criminally liable for

 

it is therefore (the more so in the present economic climate) perfectly reasonable to suppose that a some stage their "exposure" to risk had been exceeded in the market place and that for commercial reasons they had to cut back on the amount of lending

[toymaker1]

yes i agree- it would seem as i said earlier that they used the word terminate when it would appear that all they wanted to do was "restrict" further borrowing

 

not having ever had an egg card i do not know if they had a term allowing them to do so- but i do know in 99% of all other agreements- that term is there and to my mind is not an unreasonable or onerous term

 

The Egg problem did not arise because Egg wished to restrict the credit, but because Egg terminated the accounts - that is a completely different situation, and is what all the fuss is about.

[diddydicky]

The Egg problem did not arise because Egg wished to restrict the credit, but because Egg terminated the accounts - that is a completely different situation, and is what all the fuss is about.

 

yes i know- i was putting forward the proposition that PERHAPS their intention WAS to restrict further credit and they mistakenly used the process of TERMINATION in order to do so!!

 

whatever the reason, i contend that irrespective of whether they unwittingly or deliberately intended to terminate the agreements- those people who (again for whatever reason) carried on making monthly payments have (IMO) unwittingly or otherwise- rejected the creditors unlawful attempt to repudiate and the agreements in fact endure

 

the basis for this argument being that faced with an attempt by one party to unlawfully rescind- the performing (or injured party) has TWO choices

 

one is to ignore the attempt and hold the other party to the agreement

 

the other is to say or do some thing or act which demonstrates that the injured party has accepted the unlawful act as releiving him of his continuing obligations under the agreement or contract

 

it would seem to me that as the recipients of the unlawful attempt to terminate have, by their conduct (continuing to perform their part of the agreement) clearly demonstrated that they consider the agreement to still endure- elected the former, rather than the latter option.

Edited March 10, 2010 by diddydicky

[basa48]

for a cagger to argue passionately that he knows all about the prescribed terms in one breath and then when i suits- to pretend that he thought the credit card and credit limit were "forever" in another argument would be a tad hypocritical in my view

 

I do hope that is not directed at me.

 

IMO a credit card is 'forever' as you put it. But with the proviso that either party can end the agreement by mutual consent, or even one party restrict its use by the other. But arbitrarily ending it is a no, no.

 

The lender if he wants can simply advise there is a £0 credit limit. As you say - a prescribed term. But that doesn't end the agreement like Egg did.