Egg credit card agreement terminated

[BEC01]

Just to add another point to this thread.

I presume that Egg cannot report to CRAs once they have terminated the agreement?

 

My thinking is that customers can request the CRAs cease processing information as there is no agreement.

 

Then, you have taken away one of their most potent "weapons" against you.

[BlueSquirrel]

Is there a difference between ending and terminating. I have an HSBC agreement and they have written to say they are ending the agreement, I am in arrears but they have not issued a default notice.

 

I don't want to hijack but I just wanted to check I had understood correctly. Is the point being made that although the agreement says they have a right to cancel at any time, they actually don't. Or does this only apply if you have not been naughty?

[toymaker1]

Is there a difference between ending and terminating.

Hi Bluesquirrel

There certainly is a difference. "ending" is just a general term. For example, an agreement can be ended by termination of the agreement or cancellation of the agreement. The circumstances in which a credit card agreement agreement can be terminated by a creditor are mainly covered by sections 87 and 88 of CCA 1974.

The circumstances in which a credit card agreement can be cancelled are mainly covered by section 67.

 

 

I have an HSBC agreement and they have written to say they are ending the agreement, I am in arrears but they have not issued a default notice.

As I have just indicated, "ending" is not a term used in CCA 1974, and creditors do not have a right to end an agreement at any time, regardless of the fact fact that nearly all the credit card companies put this into their terms and conditions. That does not make it legal.

Section 173 of CCA1974 makes it clear that terms inserted by a creditor, which are not also incorporated into CCA1974, are not legally enforceable by the creditor. - such a term is void.

 

Is the point being made that although the agreement says they have a right to cancel at any time, they actually don't.

 

You are quite right, they actually don't.

 

 

Regards Peter.

[BlueSquirrel]

That's helpful, Peter, thank you. Are they now only entitled to ask for the arrears rather than the whole outstanding balance. I will start a new thread for this one I think...

[toymaker1]

That's helpful, Peter, thank you. Are they now only entitled to ask for the arrears rather than the whole outstanding balance. I will start a new thread for this one I think...

Hi Bluesquirrel.

 

I have no special legal knowledge. All I can tell you is what I would if I was in your particular situation, that is to say, if I understand you correctly, you got into arrears, and the credit card company wrote to you stating that they were "ending" your agreement, but they did not send you a default notice.

 

In that situation I would write to them (special delivery) requesting them to indicate to you which part of the CCA 1974 provides them with the legal authority to terminate the agreement without observing the requirements set out in sections 86, 87 and 88 of CCA 1974.

Also, I would say to them that until they provide clarification to you, you consider the agreement to be in dispute, and that you do not accept any increase to your debt caused by interest which accrues from the date of their letter to you purportedly "ending" the agreement outside the provisions of CCA 1974.

 

I would not pay a penny until the whole matter is resolved.

From what you have posted, it seems that they have acted outside the provisions of CCA 1974 - i.e. unlawfully..

I hope that makes sense.

Regards

Peter

P.S. I would also request them not to telephone you about the matter, as you wish all communications to be in writing so that both parties have a clear record of the matter, and that you will regard all telephone calls as harrasment within the terms of the Protection from Harassment Act 1997, and the terms of the OFT Debt Collection Guidance July 2003 Updated December 2006.

[BlueSquirrel]

Thank you Peter I will do that. I have not sent a CCA either on this account, so I will do that too I think

[toymaker1]

Thank you Peter I will do that. I have not sent a CCA either on this account, so I will do that too I think

 

It's difficult to be more specific about your case, as I dont know how much your arrears are etc.

However, you might find it useful to include in your letter an offer of repayment on the following lines.

Say that it is apparent that your account with (creditors name) has got into arrears, and you are now in a situation of serious over-indebtdeness with (creditors name), to the extent that the debt arising from your over-indebtedness to (creditors name) is not repayable out of your income by means of normal monthly repayments. Say that you consider that the account can be brought back into order by means of the following proposal, which you submit for their consideration.

If (creditors name) will suspend interest on the debt as it stands on your most recent statement (i.e. the last statement before they "ended" the agreement), you will pay a minimum of £100 per month (or what you can afford) until the total debt of £xxxxxx is cleared.

Say that you will commence payments as outlined above immediately upon reaching a resolution of the dispute between (creditors name) and yourself.

Say that you hope that (creditors name) will consider this to be a suitable way forward in the matter of resolving the over-indebtedness which has arisen on you account with (creditors name).

I am not saying they will immediately agree to that, but you will have shown clearly that you have made a reasonable offer to them. The ball is then in their court. This is of course in addition to what I suggested in my previous posting. - before any money is paid by you they wil still need to explain why they acted outside the provisions of CCA 1974.

Regards Peter.

[BEC01]

I've looked into this a bit further - and taken a bit of advice from one of my legal "acquaintances" - and it would seem that if Egg have terminated the agreement, then two things become implied;

 

1. They can no longer process your data.

2. You have no contractual obligation to repay them.

 

We need to look into this further, but on the face of it looks as if Egg may have made a massive blunder

[toymaker1]

I've looked into this a bit further - and taken a bit of advice from one of my legal "acquaintances" - and it would seem that if Egg have terminated the agreement, then two things become implied;

 

1. They can no longer process your data.

2. You have no contractual obligation to repay them.

 

We need to look into this further, but on the face of it looks as if Egg may have made a massive blunder

 

Hello BigEddie

 

I believe you are absolutely correct.

Egg have been totally unable to give me an answer to my request that they indicate to me which part of CCA 1974 provides them with the authority to terminate my account when it was not in default.

The reason Egg have not been able to anwer that question is that there is nothing in CCA 1974 which provides them with the legal authority to terminate an account which is not in default, as defined by CCA 1974.

 

regards

Peter

[BEC01]

Our conclusion is that - aside from the legality of terminating the contract - that, if they have chosen to end the agreement then all preceding terms cease to have any relevance.

 

This includes, but is not limited to;

 

 

• Their right to charge interest.
  
• The consumer's obligation to make any payments.
  
• The passing of the consumer's data to and CRAs.
  
• The internal processing of the consumer's data.
  

Basically, there is no longer a contract for either side to honour.

 

They no longer have a contract that is regulated by the CCA.

One is able to draw certain conclusions from this.

 

8-)

[cosalt]

I've looked into this a bit further - and taken a bit of advice from one of my legal "acquaintances" - and it would seem that if Egg have terminated the agreement, then two things become implied;

 

1. They can no longer process your data.

2. You have no contractual obligation to repay them.

 

We need to look into this further, but on the face of it looks as if Egg may have made a massive blunder

 

Excellent research !

 

Presumably this is only where egg have terminated without reason ie default ?

 

Egg managed to terminate me without reason last march, then default me and terminate me again in dec / jan ! And all on an unenforcable agreement.

 

Chances of egg getting any money out of me 0%

[cosalt]

Even though egg terminated me last march, I still continued to pay for 6 months, I now intend to claim this money back !

[BEC01]

Excellent research !

 

Presumably this is only where egg have terminated without reason ie default ?

 

Egg managed to terminate me without reason last march, then default me and terminate me again in dec / jan ! And all on an unenforcable agreement.

 

Chances of egg getting any money out of me 0%

 

The advice I have taken is from contract lawyers.

They have no expertise when it comes to the CCA - so please take note of this. IT IS NOT INTENDED AS SPECIALIST ADVICE.

 

However, once a party has decided to terminate a contract, all previously agreed terms and conditions cease to apply.

 

Now, many on here will be able to correct me if I am wrong, but my understanding is that if one party defaults on a contract, then the other party is allowed to claim for the remainder of the contract.

 

However - and this is where Egg may just have slipped-up rather badly - if either partner voluntarily withdraws from the agreement, then the other party can either;

 

1. Agree with the termination and the contract ends - in its entirety.

 

or

 

2. The party not volunteering to withdraw, chases for any losses incurred.

 

In our - not heavily researched - view, Egg had decided to end the contractual agreement and have therefore no right to chase any balances.

 

It is of interest to us as a point of law.

It will be of interest to the 160,000 + as a point of principle, or even more...

 

It is very interesting, and rather surprising that more people haven't looked into this more deeply.

Edited February 2, 2009 by BigEddieChek

[cosalt]

Hi again, is anyone able to advise what bearing s98 has on this as I dont fully understand it ?

[cosalt]

The advice I have taken is from one of the Uk's top contract lawyers.

They have no expertise when it comes to the CCA - so please take note of this. IT IS NOT INTENDED AS SPECIALIST ADVICE.

 

However, once a party has decided to terminate a contract, all previously agreed terms and conditions cease to apply.

 

Now, many on here will be able to correct me if I am wrong, but my understanding is that if one party defaults on a contract, then the other party is allowed to claim for the remainder of the contract.

 

However - and this is where Egg may just have slipped-up rather badly - if either partner voluntarily withdraws from the agreement, then the other party can either;

 

1. Agree with the termination and the contract ends - in its entirety.

 

or

 

2. The party not volunteering to withdraw, chases for any losses incurred.

 

In our - not heavily researched - view, Egg had decided to end the contractual agreement and have therefore no right to chase any balances.

 

It is of interest to us as a point of law.

It will be of interest to the 160,000 + as a point of principle, or even more...

 

It is very interesting, and rather surprising that more people haven't looked into this more deeply.

 

Hi, yes I am aware this is just an opinion, yet it is great to have yet another opinion thats supports what we have bee saying all along.

 

I am interested in s98 as I am not sure of its meaning ?

[BEC01]

Cosalt,

 

We did not cover consumer credit law with respect to this.

We were just assuming contract law - where there had been no default on the account.

 

In our opinion, they can terminate the contract, but the cannot enforce the terms thereafter.

 

We cannot see how any court in the land could disagree with this.

 

If I were an Egg customer in this situation, I would look very closely at any termination notice that they received.

[cosalt]

Do you want me to post up my termination letter from last year ?

[BEC01]

Yes please.

[cosalt]

Here we go

 

[BEC01]

That's outrageous!!!!

 

They cannot half terminate an agreement!

This would not have a leg to stand on in court, in my opinion.

 

They state that: "the agreement will end 35 days after the date of this letter". Then they later follow-up with "The Egg Card agreement continues to apply until the balance is paid in full".

 

They have terminated the agreement, therefore it cannot continue to apply after the notice date!!!!!

 

Say you are a supplier, and you have a 3 year agreement to supply a product/service at £100k per year.

 

Then you decide to withdraw the contract after two years. You cannot then say, we are withdrawing the product/service in the final year, but are still going to charge you for it.

 

Again - THIS IS NOT INTENDED AS ADVICE IN ANY FORM OR MANNER - however, it looks to be a massive, ill-advised, mistake by Egg if anyone decides to take it to court.

 

 

EDIT: Cosalt, I would add that if you have defaulted on the account, then it puts a different perspective - in my understanding - it would be you that would be deemed to have broken the contract. Sorry if that is not what you want to hear, just being honest with my opinion. I'm sure there are other routes for you though.

Edited January 27, 2009 by BigEddieChek
Extra information, for clarification.

[cosalt]

My egg balance is over £12k, I will fight it by any means !

[BEC01]

Did you default before they terminated the contract or after.

Makes a very big difference, as you cannot default on a non-existent contract!!!

[cosalt]

That's outrageous!!!!

 

They cannot half terminate an agreement!

This would not have a leg to stand on in court, in my opinion.

 

They state that: "the agreement will end 35 days after the date of this letter". Then they later follow-up with "The Egg Card agreement continues to apply until the balance is paid in full".

 

They have terminated the agreement, therefore it cannot continue to apply after the notice date!!!!!

 

Say you are a supplier, and you have a 3 year agreement to supply a product/service at £100k per year.

 

Then you decide to withdraw the contract after two years. You cannot then say, we are withdrawing the product/service in the final year, but are still going to charge you for it.

 

Again - THIS IS NOT INTENDED AS ADVICE IN ANY FORM OR MANNER - however, it looks to be a massive, ill-advised, mistake by Egg if anyone decides to take it to court.

 

 

EDIT: Cosalt, I would add that if you have defaulted on the account, then it puts a different perspective - in my understanding - it would be you that would be deemed to have broken the contract. Sorry if that is not what you want to hear, just being honest with my opinion. I'm sure there are other routes for you though.

 

Hi again, yes but they defaulted me 10 months after they had terminated my agreement ?

[BEC01]

I'd be most interested to hear what some of the more legally qualified members on here think of this.

 

My gut feeling is that this could be a very easy kick in the Citigroups' whatnots from the consumer.

 

Over 160,000 of them.

 

Ouch!

[cosalt]

Just to clarify, agreement terminated 01/08, default notice 12/08, termination again 01/09