Egg credit card agreement terminated

[diddydicky]

IMHO egg are going to let the 6 years pass by in the knowledge that most of its affected customers will then have SB debts and they are off the hook

 

they do not want to rouse sleeping dogs in this respect

[diddydicky]

As far as I am aware, nobody has taken this to court.

 

I would think it is highly unlikely that anyone will take Egg to court, and vice versa.

 

Although for £2.5k plus interest, it may be worth considering making the first move?

 

My personal feeling is that if you can live with a default on your credit file, then Egg will go no further if contested on this point.

 

Bit of a skin off each other's nose situation. Just depends on your point of view.

 

with a 160,000 accounts at stake anyone who made the first move would, i venture to suggest better be prepared for the action to bankrupt them if they lose!

 

let sleeping dogs lie was never more apt!

[diddydicky]

never lose sight of the fact that the Consumer Credit Act is an act for the PROTECTION of conumers

 

it is predicated on the consumer being given clear and concise information by the sohpisticated creditor as to his rights and responsibilities

 

IN the context of this act a court will rule as to what the word "Termination" means to the ordinary man in the street

 

and we all know (apart from PeterBard) what that means

[diddydicky]

to add weight to your argument,

 

if it were the case that the consumer credit act intended that the creditor may terminate the agreement "at will" at any time and without compliance with s87, then one would have to ask why the authors of the act bothered writing the act in the first place!! since it would be renderred ineffective in its entirety it that were the case.

 

I suggest you do not "bite" when being "wound up" by certain posters

[diddydicky]

No so much ‘biting’, more playing devil’s advocate, in that I wish to explore every possible argument and counterargument in this ‘termination’ scenario.

 

Bearing in mind what peterbard says (and his arguments do have some merit) I find that CCA 1974/2006 doesn’t appear to help us in the ‘termination’ arguments.

 

s.87 only applies where there is a default by the debtor (“Service of a notice on the debtor ………….. is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,— (a) to terminate the agreement,…”) and s98 only applies to fixed term agreements (“98(2) Subsection (1) applies only where— (a) a period for the duration of the agreement is specified in the agreement,”). I can see a handy barrister dismissing these arguments in double quick time. The explanation given in the ‘Explanatory Notes’ is only DTI guidelines with no legal authority and could be dismissed by a hostile judge.

 

Thus we are left that there appears to be no section of the Act that covers termination of running accounts by the creditor where no breach has occurred. Specifically I find nothing that prevents termination where there is no default and indeed wonder if it is possible to specify for everything that could be done (or not done) during an agreement. However I do find merit in the argument that if the creditor could simply end the agreement at any time leaving the debtor owing the balance there is no point in having an agreement at all. Not only would this surely be an unfair situation in that the rights of the debtor to use the facility is ended whilst that of the creditor is unaffected, there would also be no legal protection for the debtor from the creditor demanding immediate repayment of the balance on their ending the agreement; i.e. there is nothing in any Act that specifies how the balance is to be repaid after termination. This cannot be right.

 

Even use of the Unfair Terms legislation could leave us exposed in that arguing that the ‘termination clause’ in Egg’s T&Cs is unfair would normally result in it being struck out and the agreement reinstated without it, (UTCCR 1999 s.8). Egg gets told off, the agreement survives, our accounts can then be properly restricted by Egg and we still owe the debt.

 

I still feel we have to look to ‘standard’ contract law for a remedy. Egg has arbitrarily ‘ended’ the agreement for no good reason. They unequivocally state this in their letter. There is nothing in the 1974/2006 Act that specifically says they cannot do this, but the letter is a clear indication of an intention ‘not to perform’ their side of the agreement, (i.e. provide a credit facility). This then is an actual fundamental breach, which gives the non-breaching party the option to agree to terminate the contract and sue for damages. The clause Egg refers to in the T&Cs gives them no relief either as it also dies together with the whole agreement upon termination. There is no ‘survival’ clause in Egg’s T&Cs and in any event such an exclusion clause could well not be available resultant on such a fundamental breach. I argue then that after the termination there remains no agreement (and thus no ‘termination clause’ in the agreement) and no remaining rights and obligations.

 

Discuss.

 

wasnt you i was referring to basa your post 1163 summed it up nicely- but some posters are "rebels without a cause" and will argue the hind legs off a donkey purely for the sake of it!!

[diddydicky]

98.—(1) The creditor or owner is not entitled to terminate a regulated agreement

except by or after giving the debtor or hirer not less than seven days' notice of the

termination.

(2) Subsection (1) applies only where—

55

(a) a period for the duration of the agreement is specified in the agreement,

 

seems pretty clear to me that it does!!

[diddydicky]

Depends how you read it.

 

I read it as:

 

He's not entitled to terminate the agreement - but this applies only to fixed term agreements.

 

which is the opposite of what you said in post 1176

 

quote

 

Not sure why you think this since it only applies to fixed term agreements? It does not mention running accounts nor bar this ending of running accounts.

 

??

[diddydicky]

IMO it doesnt say that s98 doesnt apply to other agreements, it says its terms do apply to fixed duration agreements.

 

if that makes sense?

 

no i don't think it does,

 

if it applied to all types of agreement then it would not have gone out of its way to point out that it applies only to fixed term agreements

 

it is as clear as a pikestaff what it means

 

98 (2) quite clearly says that 98 (1) is subject to 98(2) (it does not say that only parts of 98(1) are subject to 98(2)

Edited March 5, 2010 by diddydicky

[diddydicky]

spot on

[diddydicky]

I don't disagree, but I like to look at everything from every angle not just the one favourable to the debtor.

 

Best be aware of all possible counter arguments n'est pas?

 

nothing wrong with playing devils advocate but always bearing in mind that we have lots of newbies and others on the forum who do not/cannot. follow the intracacies of the law to the same level of competence and who we don't want to confuse or de motivate to act

 

sometimes pays to concede a point so that others are not left confused

[diddydicky]

i dont think the deposit screws up the finance

 

the total deal for the car was 19,748.11 the customer paid 500 cash deposit and the balance left to finance was 19,248.11

 

where is the problem?

 

the agreement is merely showing how the purchase price has been arrived at

 

no interest has been charged on the 500 quid

 

bloody expensive car tax though !!

[diddydicky]

quite clearly says amount of credit is 19,248.11

 

with respect i think you are misunderstanding the agreement

 

the bottom boxes are merely reconciling how the total price of 19,748.11 has been paid

 

500 cash and 19248.11 by way of credit

 

+++++++++++

 

you will make one payment of 633.08 followed by 49 payments of 433.08 which is 25,551.72 therefore your total payments are 26,184.80

 

the loan amount is 19,248.11 and the interest is 6936.69 which = 26,184.79

 

 

 

1 penny out is within acceptable tolerances

 

the one thing i cannot check is if the interest has been worked out on 19248.11 or 19748.11 however i am 99.9% certain that it has not been worked out on 19748.11

Edited March 10, 2010 by diddydicky

[diddydicky]

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

[diddydicky]

[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!!

[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

[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

[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

[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

[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

[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

[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