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.

[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

[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-)

[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

[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.

[BEC01]

Yes please.

[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.

[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!!!

[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!

[BEC01]

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

 

Well, I don't see how they can dafault you when they have terminated the agreement.

 

That is very naughty, to say the least.

 

Hmmmmm.

Interesting.

 

This would appear to be a very clear situation, unless I am missing something rather obvious?

[BEC01]

Another thing, before they terminated me for the first time I had never even been 1 day late with a payment or ever over my credit limit.

 

I don't think it would have mattered if you had, as long as you didn't default on the account.

 

Toymaker has answered some of the other legal points very well.

 

I personally can't see that they had any right to anything with respect to you, and you had no obligation to them, after the 35 day notice period.

 

It just seems to be such an obvious blunder that they have made, that I am tempted to think that there is a bit of financial legislation that we are missing out on.

 

If not, then we need to formulate an action plan for all consumers who had their contracts terminated, yet Egg continued to enforce their terms.

 

What Egg should have done was to change the terms to that of withdrawing card access - as this looks to be all that they were doing.

 

By stating that they are ending the agreement, they have potentially got themselves into a bit of a muddle.

[BEC01]

Although this is toymaker1's thread, I would like to point out to people who are trying to avoid paying the outstanding balance that there is another argument that may render the agreement unenforceable - early Egg card agreements did not include the prescribed term "credit limit" - instead they mentioned an "approved limit".

 

A different angle, but more ammunition, and worth mentioning here.

 

Thanks militant.

 

Although I think toymaker's point is that there is no outstanding balance as the agreement no longer existed. This is something much more clear cut unless I am missing on something.

 

In terms of contract law, it is very, very simple and quite astonishing to read something like that.

 

Financial law is another kettle of fish altogether; by I am at a loss to see how this could interpreted any way other than I am at the moment.

[BEC01]

I should also point out that I am not in favour of people "getting out of paying" anything that they owe.

 

I am strongly against the way that some of the banks have blatantly disregarded the law. For this they should be penalised, and the consumer compensated. This is a very important principle.

Edited January 27, 2009 by BigEddieChek
Grammar!!!!

[BEC01]

..

 

militantconsumer said:

Here is the relevant thread about possible unenforceability of early Egg Card agreements:

http://www.consumeractiongroup.co.uk/forum/egg/177463-response-our-egg-cca.html

 

steven4064 states that it is unenforceable due to not having the prescribed terms.

 

He also states:

 

 

I'm not in favour of people getting out of paying back money they borrowed either. But in the case of my friend we have a situation where

A) PPI was blatantly pushed in an inappropriate way via their website and

B) a highly misleading loan agreement was created that hid the true cost of the PPI

Totally unreasonable, she couldn't afford it all, has paid a fortune in interest, and been defaulted. In those circumstances why shouldn't it all be written off? Egg deserve it.

 

All IMHO.

 

Sorry for taking your thread a little off topic, toymaker1.

 

I agree, they do deserve to be stood up to.

Their tactics are reprehensible.

Edited February 2, 2009 by BigEddieChek
Not necessary.

[BEC01]

I think he is waiting for Egg to take him to court?

[BEC01]

They may well have.

I would doubt if anyone has challenged this though.

[BEC01]

So, after chewing this over a bit more.

 

A contract has been ended, but the threat of punitive action (a default or other marker on a credit file) exists if payments are not continued.

 

This is very, very serious stuff.

 

I'm going to explore this further with my advisers, and will report back.

 

As mentioned elsewhere, I would guess that should anyone be - or have been - successful with this, there would be some kind of "gagging" order in the settlement.

 

Would still be keen to hear the views of any more financially aware members.

[BEC01]

No, but I think overdrafts have different legislation to credit cards?

Edited January 29, 2009 by BigEddieChek
misread initial post!!!!

[BEC01]

Just discovered something new about the termination agreement today.

Will not go into detail as it is not in the best interests to publish it at the moment.

 

But Egg very clearly know they made a mistake with this letter.

 

[BEC01]

...

 

Cosalt, in response to your PM.

I think I can post this without upsetting certain people, and it may be for the greater good - which is what this is all about.

 

This is the way I see it.

 

1. Write to the DCA, enclosing a copy of the 1st termination letter. State that you no longer had a contract with Egg after the 35 day notice period.

 

2. Point out that as it was a credit card, it was a revolving service. This is different from a loan that has a fixed period.

 

3. Following on from 2; if Egg wished to terminate the agreement, they had the right to demand repayment prior to that. However, they clearly chose not to do so.

 

4. Upon termination of the agreement (35 days after the notice letter), if they had not requested full payment of the balance prior to that, they then ceased to have the right to demand any outstanding balance.

 

So, it was basically their choice to give up their right to;

 

1. Process your data with a CRA.

2. Request payment from you with regard to that account (as it has ceased to exist), and any outstanding balance.

3. Maintain the account. It should have been closed as there is no contract to govern it.

 

You should point out that this is an extremely serious situation, and that the DCA should strongly consider their role within this. Particularly the implications that it may have with regard to its registered directors. I would also get the names of the registered directors from Companies House (costs £1), and make sure you send a copy to them as well. They really need to be aware of this. Maybe they don't deserve it, but in my opinion it is a responsible thing to do to notify them. They may thank you for it

 

ONCE AGAIN THIS IS JUST AN OPINION - NOT LEGAL ADVICE - ONLY BASED ON WHAT HAS BEEN POSTED HERE, SO I MAY NOT HAVE THE FULL FACTS.

 

If any of the more experienced members here disagree, please post a message to help.

 

We're off to see a Solicitor about this next week. So any advice will be passed on.

 

Edited February 2, 2009 by BigEddieChek
Might affect case.

[BEC01]

Perhaps someone could do a template letter?

 

Good idea.

Anyone help?

[BEC01]

...

Edited February 2, 2009 by BigEddieChek

[BEC01]

Wasn't really implying, just making an observation that there are two legal terms that could be applied to the aforementioned situation.

 

 

[BEC01]

Look forward to your results.

And best of luck.

 

I expect you will need to take them to court - or very close to it - otherwise you will get fobbed-off by them in their usual arrogant manner.

[BEC01]

In your case at least, no they did not need to contact you again.

 

I quote, "...we are giving you formal notice that your agreement will end 35 days after the date of this letter".

 

This is totally clear and unambiguous.

So, your Egg Card Agreement ended on 6th March 2008.

 

If they wanted you to clear the balance, but not use the card, what they should have done is kept the agreement, but changed the terms to withdraw the card, and to reduce the limit accordingly each month.

 

The more one looks at this letter, the more it seems it may not have been issued with the company's best interest at heart...

 

For the quote at the beginning of this post to then be followed by "The Egg Card agreement continues to apply until the balance is paid in full" in the same letter is absolutely breathtaking.

 

It cannot, unless the balance was paid in full before or on 6th March 2008. Thereafter, there is no agreement, therefore no debt.

 

Simple.

Edited January 29, 2009 by BigEddieChek
Further info.