Egg credit card agreement terminated

[toymaker1]

I also have an egg credit card which they terminated in january.

 

hello dbairduk

 

I'm not clear what your exact situation is, but if Egg terminated your credit card agreement without first giving you a default notice as required by S87(1)(a), I believe that in such a situation Egg have acted in breach of CCA 1974.

That is what happened to me.

My position is that I consider that by terminating my agreement without complying with S87(1)(a) Egg have breached CCA 1974, and consequently all of Egg's subsequent actions are therefore also in breach of the Act. i.e. all Egg's threats about taking legal action etc. etc. are legally meaningless.

 

I intend to let Egg take me to court, at which time i will make an application to the court under Sections 19/20 of CCA 2006 (unfair business practices.)

 

Regards

[dbairduk]

hello dbairduk

 

I'm not clear what your exact situation is, but if Egg terminated your credit card agreement without first giving you a default notice as required by S87(1)(a), I believe that in such a situation Egg have acted in breach of CCA 1974.

That is what happened to me.

My position is that I consider that by terminating my agreement without complying with S87(1)(a) Egg have breached CCA 1974, and consequently all of Egg's subsequent actions are therefore also in breach of the Act. i.e. all Egg's threats about taking legal action etc. etc. are legally meaningless.

 

I intend to let Egg take me to court, at which time i will make an application to the court under Sections 19/20 of CCA 2006 (unfair business practices.)

 

Regards

My card was terminated with the 160,000 others earlier this year. I did not default on my card and never missed a payment. I had the odd charge for going over my credit limit though.

 

I am a bit new to all this but I am trying to investigate if them terminating my credit card also nulls me from the original agreement. There for at least letting me get out of paying interest.

 

I would also like to know if now they have terminated my credit card I can stop them updating my credit file - then ultimatley coming to a settlement figure without showing as a default on my credit file.

 

Kind Regards

 

D

[steven4064]

I am still not sure about the implications about the CCA and the terminatio of all these cards by Egg - toymaker is rapidly becoming the expert on that.

 

However, if they have terminated your agreement then they certainly may not update your credit file - that would be an offence under the Data Protection Act 1998.

[Mistermind]

(1) Egg have withdrawn the standard credit card facility of accommodating new spending.

 

(2) Egg have not withdrawn the standard credit card facility of allowing the outstanding balance to be paid off at the rate of minimum 5% monthly.

 

The account has not been sold nor sent away to debt collectors who demand payment in total at once, the account is still being updated monthly on Egg computer in Egg House. It is unclear if merely calling a halt to new lending (as is Egg's right), whilst honouring prior lending, constitutes "terminating the agreement".

 

All who read this forum know I do not take Egg's side. Just a point of law, a view which a judge may or may not share.

[toymaker1]

My card was terminated ...... I did not default on my card and never missed a payment. I had the odd charge for going over my credit limit though.

Hello dbairduk

My situation is exactly the same as yours. I cant tell you what you should do, but I can tell you what I am doing.

As I seem to be in a minority of one on this matter, it might be worth going into a bit of detail. I apologise if it's a bit boring - but then no one is forced to read it!

 

1. The starting point for my position is taking note of the fact that the stated purpose of the Consumer Credit Act 1974 is to protect consumers in their dealings with companies which offer credit -in this specific case credit card companies. This might seem to be an irrelevant point to make, but I dont think it is. Every part of CCA 1974 must be read and understood in that context.

 

2. In keeping with what I have just said, S60 of CCA 1974 makes it clear that the Secretary of State shall make regulations -i.e. the regulations contained in CCA 1974 and any related regulations or amendments - as to the form and content of credit card agreements, and those credit card agreements must incorporate terms and conditions which make the card holder aware of all the rights/duties/protection/remedies conferred or imposed on the card holder by the credit card agreement(those rights/duties/protections/remedies being derived from CCA 1974), and also any other matter which the card holder needs to know.

 

3 In light of this, it is clear to me that if one wishes to find the origin of Egg's claimed entitlement, in Egg condition 20.2, to terminate an agreeement "at any time", one must look for it in CCA 1974.

 

What you will find in CCA 1974 with regard to terminating credit card agreements are very specific procedures which must be adhered to by the creditor - in this case Egg, if Egg intends to terminate an agreement.

 

4. In my case the relevant section of CCA 1974 is S87(1)(a). Egg did not send me a default notice before terminating my Egg agreement. It is quite straightforward, as I see it. If Egg (or anyone else) does not comply with the requirements set out in CCA 1974, then Egg is in breach of CCA 1974. - all the subsequent huffing and puffing and stick waving of Egg

is legally meaningless- the one significant fact is that Egg has breached the CCA 1974.

 

5. The consumer proctection aspect of this, which I mentioned at the start of this post, has been strengthened hugely by the CCA 2006 S19/20, regarding unfair business practices. It is well worth reading if you haven't done so yet.

 

6. My way of dealing with Egg's breach of CCA 1974 will be to let Egg take me to court, at which time I will make an application to the court under S19/20 CCA 2006, drawing the attention of the court to Egg's unfair business practices towards me in respect of Egg's termination of my Egg agreement in breach of CCA 1974 and Egg's other actions in relation to that unauthorised termination. Egg will have to prove to the court that Egg acted reasonably and fairly at all times.

 

 

7.Steven has already dealt with the matter of Egg referring your details to credit agencies - as he has indicated, it would be in breach of the Data

Protection Act for Egg to process your data after Egg considered it had terminated your Egg agreement.

 

Regards

[toymaker1]

(1) Egg have withdrawn the standard credit card facility of accommodating new spending.

 

It is unclear if merely calling a halt to new lending (as is Egg's right), whilst honouring prior lending, constitutes "terminating the agreement".

 

 

Hello Mistermind

 

Regarding your suggestion that Egg have not terminated the agreement, but have withdrawn the standard credit card facility of accommodating new spending. I think that is an incorrect view.

 

The way I see it, if Egg, having not served a Default Notice, nevertheless wished to withdraw the standard credit card facility of accommodating new spending, Egg could have acted in accordance with S87(2), and treated the right to draw upon any credit as restricted or deferred, and could have taken such steps as might be necessary to make the restriction or deferrment effective.

 

But, in my case, that is not what Egg did. What Egg actually did, having not served a default notice, was to send me a notice informing me that Egg had terminated my Egg agreement.

 

Termination means termination,

withdrawal of credit means withdrawal of credit

- they are two distinct actions, both of which are provided for within the provisions of CCA 1974.

 

Regarding your point that it is unclear if merely calling a halt to new lending constitutes "terminating the agreement".

I consider that it is not unclear at all. Calling a halt to new lending does not constitute "terminating the agreement".

 

What constitutes "terminating the agreement" is where Egg (in the case of a credit card agreement) acts to terminate the agreement in accordance with S87(1)(a) and follows the procedures as prescribed by S88 and S89. If the card holder fails to take the required actions by the required date, Egg is at that point entitled to formally terminate the agreement.

 

Regards

[Mistermind]

What is the answer when a judge asks:

has Egg terminated the agreement for the cardholder to pay minimum 5% monthly?

[toymaker1]

What is the answer when a judge asks:

has Egg terminated the agreement for the cardholder to pay minimum 5% monthly?

Hello Mistermind

 

The answer is:

 

"I can only put to the court, for the court's consideration, the actions actually taken by Egg.

Egg gave me a notice stating that Egg had terminated my Egg agreement. There had been no previous communication regarding my account between Egg and myself other than the normal monthly statements. There were no missed payments, and Egg did not give me a Default Notice under Section 87(1)(a) prior to terminating the agreement. Egg simply informed me that the agreement was terminated.

I submit that in the circumstances I have described, Egg's actions were in breach of Section 87(1)(a) of the Consumer Credit Act 1974.

 

Furthermore, if the court should determine, under Section 140A(1), that the relationship between Egg and myself arising out of this Egg agreement is unfair to me because of the way in which Egg has exercised or enforced any of it's rights under the Egg agreement or under the Consumer Credit Act 1974, I respectfully make an application to the court under Section 140B(2)(b) of the Consumer Credit act 1974 as amended by the CCA 2006, for an appropriate order to be made, under section 140B(1), in connection with the credit card agreement between Egg and myself".

 

 

Regards

[Mistermind]

Looks like you want to go to court to prove Egg sent out a letter with the wrong wording -- wording which does not accord with Egg's action.

 

I have no doubt the Eggployee wrote a poor letter. Whether the regulator will be exercised about poor wording, or whether a judge will consider the issue of vexatious litigation is another matter.

 

I have exhausted my contribution, but best of luck.

[Decanus]

Very interesting thread. I am also part of the EGG 161,000, and I agree that I don't believe they should be able to take such arbitrary action without valid reason. I also paid on time, was never late, but clearly was not making them enough money....

 

If you have not defaulted, and they can just withdraw your card but still charge interest, its both a licence to print money (you can bet your life other lenders are watching this), and shows consumer protection is a joke. If you enter into an agreement, which you keep, then its ridiculous that one party can arbitrarily change it to suit them.

 

they have fundamentally broken the rules, I believe, by terminating the agreement and borrowing facility without a default notice; they could not issue a default notice because very few customers had done anything wrong. This is an action that SHOULD be challenged in court, and SHOULD be appealed to the OFT.

 

iF Egg get their own way,it may just open the floodgates....

[toymaker1]

I don't believe they should be able to take such arbitrary action without valid reason.

If you enter into an agreement, which you keep, then its ridiculous that one party can arbitrarily change it to suit them.

 

they have fundamentally broken the rules, I believe, by terminating the agreement without a default notice;

Hallo Decanus

 

I agree with your comments.

As I see it, by terminating the Egg agreement outside the provisions of the CCA 1974, Egg has chosen to forfeit it's rights under the agreement.

 

If you think about it, what would be the legal basis for a claim against the card holder for the debt that was incurred when the agreement was active.? What law could Egg use in defence of it's claim?

 

Surely the court would say to Egg something along the lines of "Egg, you chose to terminate the agreement when, in terms of any relevant law, it had not been breached by the card holder, therefore when you terminated the agreement you also extinguished any liability to Egg owed by the cardholder .

 

Regards

[Mistermind]

Originally Posted by Gismocat

have had a good look through Egg Card credit agreement and I cant see anything

 

 

 

 

20. Ending this Agreement

 

20.2 We can end this Agreement at any time. We will normally give you 30 days' advance notice by post or email. However, if there are exceptional circumstances, or in any of the circumstances referred to in Condition 19.2, we may end this Agreement immediately and tell you about it afterwards, unless we are required by law to give you notice first. You can end it at any time by telling us to do so by post or email. In both cases, this Agreement will continue until you have repaid all amounts you owe us.

 

20.3 We can end this Agreement early by giving you notice in writing if you seriously or repeatedly fail to meet your obligations under any other agreement you have with us and as a result:

• we give you notice ending that agreement; and
  
• we reasonably believe that you will fail to meet your obligations under this Agreement in a serious way.

This Agreement will continue until you have repaid all amounts you owe us.

 

20.4 Any benefit or services we provide will end when you give us notice or when our notice is effective unless the terms of the particular benefit or service state otherwise.

"20.2 We can end this Agreement at any time."

"20.3 We can end this Agreement early by giving you notice in writing if you seriously or repeatedly fail to meet your obligations under any other agreement you have with us and as a result..... "

 

 

20.2 says ending of agreement is unconditional.

20.3 says it is conditional on misbehaviour on any agreement within the Egg group of companies.

 

The last part of 20.3 further compounds the confusion by saying: "this Agreement will continue until you have repaid all amounts you owe us.". This is truly a dog's dinner of ambiguity -- an agreement is both ended and not ended! Egg lawyers please attend English Composition class . If there is any sense camouflaged inside all this, I suggest Egg could be trying to say:

 

(1) Egg can terminate the agreement on additional lending "at any time", i.e. refuse to accept fresh spending and cash advances. As is well known, Egg can do this lawfully either by reducing the credit limit piecemeal on every account every month, or with more efficiency and economy Egg can say to 161,000 cardholders, "No more new spending". I doubt if any judge will rule against Egg for preferring the cost-saving efficient move.

 

(2) Egg cannot rescind the 5% minimum monthly repayment bargain unless the cardholder defaults. Egg Agreement clause 20.2 tries to say the fresh lending agreement is terminated, whereas 20.3 tries to say the 5% monthly repayment agreement is not terminated, this non-termination being:

 

what legally protects Egg from cardholders walking away with non-payment,

what legally protects cardholders from any future demands for immediate full repayment.

 

Egg is both terminating and not terminating. What an omlette.

[Decanus]

thats what happens when the terms and conditions are worded so as to try and include any and all variations of everything; they are too clever for their own good, and trip themselves up.

 

The agreement cannot be in place, but also terminated! although a Judge may uphold Egg's rights to terminate the credit facility, he/ she may look less favourably on such vague language in the rest of the wording. A good lawyer may be able to have a nibble at what exactly Egg are saying.

 

I had a similar thing with Tesco in that they said to accept a reduced payment deal they had to default me, but in the same letter said that the terms and conditions remained the same!! If they are the same, why default me because we are in the same agreement, aren't we? if I am defaulted, isn't that exactly because I am breaking the terms and conditions (as they see it), and a NEW agreement, however informal, is in place.

 

Seems to me the credit card people like Egg have never really had to worry about the T and C's before, because us ill-informed consumers never knew to actually read them, and then actually challenge them...

 

The worm turns.......

[Mistermind]

The lending agreement is terminated.

The repayment agreement is ongoing.

Egg cannot bear plain English.

[toymaker1]

Regarding the matter of Egg terminating accounts.

 

The central point in all this, which is beyond any legal dispute as to how to interprete particular terms in an Egg agreement, or what a particular word means, is that Egg has terminated credit card agreements without first sending a default notice to the alleged defaulter.

 

The law regulating termination of credit card agreements is CCA 1974. Under that law, and any associated regulations, Egg has no legal entitlement to terminate a credit card account without first giving the alleged defaulter a default notice, and complying with the neccessary subsequent procedures, such as under S88 and S89 of CCA 1974.

 

It is difficult to see what law would be quoted by Egg when trying to get their money back after having terminated, of their own volition, a credit card agreement where there was no default.

 

Regards

 

 

It seems to me that in that situation Egg would be saying, we hereby terminate this agreement, and we thereby terminate - that is, we choose to forfeit - any liabilities of the other party to the agreement.

[toymaker1]

Regarding the matter of Egg terminating accounts.

 

The central point in all this, beyond any legal dispute as to how to interprete particular terms in an Egg agreement, or what a particular word means, is that Egg has terminated credit card agreements without first sending a default notice to the alleged defaulter.

 

The law regulating termination of credit card agreements is CCA 1974. Under that law, and any associated regulations, Egg has no legal entitlement to terminate a credit card agreement without first giving the alleged defaulter a default notice, and complying with the neccessary subsequent procedures, such as under S88 and S89 of CCA 1974.

 

It is difficult to see what law would be quoted by Egg when trying to get their money back after having terminated, of their own volition, a credit card agreement where there was no default.

 

Regards

 

 

It seems to me that in that situation Egg would be saying, we hereby terminate this agreement, and we thereby terminate - that is, we choose to forfeit - any liabilities of the other party to the agreement.

[Mistermind]

There is a difference between what Egg did or purports to do as interpreted by the wording in their letter, and what the law will permit Egg to do. Similarly the unlawful penalty charges levied by Egg would, we believe, not be recognised by the law based on the precedent of Dunlop-v-Garage, regardless of what Egg says or what cardholders previously signed in agreement.

 

If this technical dispute over "agreement termination" went to court, I suspect the verdict would be that lending agreement termination is acceptable, but repayment agreement termination in the absence of default is not acceptable, ie no repayment agreement termination. Which is the exact position Egg wants, although their letter did not clarify the two different parts of the agreement, on which Egg take two different positions, one agreement to be terminated, the other not so. If Egg in a dense fog of communication appeared to say what might be interpreted as "we hereby terminate repayment agreement", it will not stand merely because they said so, in the same way as unlawful penalty charges will not stand when taken to court. The law will not allow repayment agreement to be terminated. The law will allow lending agreement to be terminated -- I believe.

 

I cannot see how Egg can be discomforted by an expensive court action resulting in a verdict exactly as Egg wanted but was unable to articulate in plain English. Egg is guilty as charged for being inarticulate, penalty -- to go back to school.

[toymaker1]

If this technical dispute over "agreement termination" went to court, I suspect the verdict would be that lending agreement termination is acceptable, but repayment agreement termination in the absence of default is not acceptable, The law will allow lending agreement to be terminated -- I believe.

 

Hello Mistermind

I completely disagree with your analysis of the situation regarding Egg's termination of credit card agreements.

What you seem to be suggesting is that a court would let Egg have their cake and eat it.

S87(1)(a) of CCA 1974 and also the CCA 2006 Explanatory Notes make it absolutely clear, without any ambiguity, that if a credit card company wishes to terminate an agreement it must first give a default notice to the card holder alleged to be in default.

CCA 1974 does not provide for Egg to "terminate" a part of an agreement but retain intact another part (the part in Egg's favour!)

If Egg wishes to limit the available credit to zero it is allowed to do that within CCA 1974 - but that is not the same as "terminating".

 

You are quite right to point out that what Egg has done is both to terminate and not terminate at the same time. i.e. it is trying to do what CCA 1974 will not permit Egg to do.

I cant see a court (particularly in these times of counsumer protection) allowing Egg to get away with such dodgy practices.

These days, any interpretion of the law is generally in the consumer's favour if it is open to doubt.

 

regards

[Decanus]

I agree with Toymaker1. In court, I think the Judge would view it as Egg, being the instigator of the action, should have darned well crossed all the t's and dotted all the i's. They tend to take a dim view of large organisations in court against consumers, especially when they cant even get basic paperwork right.

 

I think there is a significant grey area between what Egg wants and what should be allowed, and that would be enough to challenge.......you simply cannot terminate an agreement, but retain part of the agreement you want to keep!! this would become a new agreement, would it not?

[Mistermind]

....you simply cannot terminate an agreement, but retain part of the agreement you want to keep!! this would become a new agreement, would it not?

 

A fair point.

 

Lets say you have Lloyds TSB in the high street offering a fixed-sum loan at 1% interest per month.

 

Lets say next door something like a Money Shop offers a rolling credit account with new borrowings allowed up to the credit limit, with no questions asked. For this privilege you need to pay interest at 2% per month. Customer X could well sign up for borrowing at the expensive 2% rather than 1%, so as to avail himself of future flexible loans with no questions asked.

 

If after incurring only £1,000 spending on a £3,000 limit account, fresh borrowing was suddenly stopped in February 2008, then Customer X and 161,000 like him are entitled to ask himself -- why am I being charged interest at double the Lloyds TSB rate, whilst I am denied the extra privileges which lured me into the bargain in the first place?

 

Substitute Egg Card for Money Shop, and the analogy is complete. Yes, I believe now that Egg has halted fresh lending, cardholders have a case for lower interest rates to match market rates for fixed loans.

[Decanus]

thats a very good analogy, and I agree with your conclusion. Can Egg justify credit card rates of interest, on what they have essentially transformed into a loan? Should they not have said'look, we are cancelling their borrowing facility, but are asking you to repay the amount at this competitive rate.....

its a real kick in the teeth to ask someone with say, £6000 owing on their card, to suddenly have to pay that back at 19.9% indefinitely, all the time racking up the interest....Egg just plain got greedy

[RubyRose]

This is not about semantics. "termination" is a specific action, the taking of which is strictly governed, in my case, by the regulations contained in S87 and S98 of CCA 1974.

 

 

If Egg, as it is entitled to do under S87(2) and S98(4) of CCA 1974, lowered the credit limit every month, the regulator or a county court would not rule against Egg for "terminating the agreement".

However, that is not what Egg did in my case. Egg did not lower the credit limit, leaving the agreement intact, Egg terminated my account without giving me a default notice as required under S87(1)(a) and also in breach of S98(2)(a).

 

I hope that my postings on this matter might be of use to some of the other 161,000 Egg cardholders who, as you say, are in the same boat.

I suggest that cardholders in a similar position ask Egg to indicate which part of CCA 1974 provides Egg with the entitlement to terminate their Egg agreement when it is not in default. If you look at my second posting on this matter, you will note that even Egg did not seem to be able top provide me with a clear answer to that question!

 

Regards

 

I am exactly in the same position and will be resisting their actions based on your arguments.Shortly after my credit card was terminated, I wrote to egg requesting my CCA - no response as yet and i have proof that my request was received. I will write to them once more reminding them of their obligations and that whilst this situation persists i do not intend making any payments on an account that was unilaterally terminated, and is not supported under consumer credit laws that you have referred to.

 

I would be appreciative of any support in this matter as i feel that Egg have embarked on bloody minded strategies which is not supported by British consumer rights laws.

 

Thanks for starting this thread. I will be posting and i hope the rest of the 161 000 join us in giving Egg a bloody nose.

 

regards

Ruby

[oggy1]

hi everybody,

i am with the toymaker on this one, i never missed any payments with egg as it was paid by direct debit and i had a few charges for going over my credit limit.

they terminated my agreement and as with everybody i never recieved a default notice.

i am going to do the same and write to egg for clarification .

[Decanus]

did anyone ever get any sort of satisfactory reply from EGG on this, or was it a waste of time?

[toymaker1]

did anyone ever get any sort of satisfactory reply from EGG on this, or was it a waste of time?

 

Hello Decanus

 

Unfortunately, my experience is that it is a waste of time expecting to get any sort of satisfactory reply from Egg.

The position as I see it, if Egg has terminated your credit card agreement when you are not in default, is that in effect Egg is saying to you (the debtor) that Egg (the creditor) has chosen, by it's own choice, to terminate the existing agreement with you. In so doing Egg is choosing, by it's own choice, to cancel or write off any outstanding debt owed by you to Egg. Put simply, Egg has voluntarily chosen to end the contract between Egg and you. Included in that contract was the money you owed at the time that Egg chose to end all contractual relationships with you - end of story.

If Egg then aproach you for the money you owed to Egg, they will have to rely on the law to enforce Egg's claim. The law which covers the money you owed to Egg is The CCA 1974. If Egg wants the money back they will find that there is nothing in the CCA 1974 to support their claim, in light of the fact that Egg chose, of it's own volition, to terminate the contract when you (the debtor) were not in breach of the contract. The contractual obligation either exists or it does not exist. In the example I have given, it no longer exists, as Egg has chosen to end it, when you were not in breach of the contract. - That is their right, but they cannot subsequently claim that you still owe them money under the contract they have just terminted! To make the point clear, ask Egg under which section of CCA 1974 it is claiming the money from you - you will find that there is no part of CCA 1974 which gives Egg an entitlement to claim the money from you.

 

Regards