Egg credit card agreement terminated

[Guest HeftyHippo]

Thanks Toymaker. Your argument is clear enough for me.

 

Have yu ever had letters like this then

 

I have re-read their letter.

 

There seems to be two moot issues:

1) This sentence: "the CCA74 does not stipulate each party's rights in respect of termination of the credit agreement".

So Egg are confirming that the CCA74 does not cover "termination" rights for either party - thus insinuating they are "off the hook" ???

They are also confirming that I agreed to this set of circumstances, which is outside the jurisdiction of the CCA74.

That by signing an agreement I should have understood "as a general contracting principle" that the agreement would not cover termination rights of either party.

(Note here that I have never asked for a copy of my agreement so do not know if the original is enforceable or not).

So is ignorance of the law allowed here ?

It is not allowed in most cases.

So, if every clause within Egg's agreement appears to be covered within the CCA74 then would most normal punters, in the eyes of a judge, be expected to also raise a question of termination rights - a clause which is not included in the agreement - at the time of signing ?

If it is not in the agreement, and seemingly not covered by the CCA74, then what is the legal standpoint?

The general public can't seriously be expected to understand what a "general contracting principle" means !! Especially when it now seems to mean that Egg can terminate an account solely to their benefit - meaning that they can impose new terms and higher interest rates without any new signed agreement from the original signed customer, who would never have agreed to such revised terms at original time of signing.......

 

 

ie, when yu ask them to show you which bit of the CCA allows them to do what they did, they said that the CCA does not deal with the right to terminate?

 

if so, what was your answer?

[toymaker1]

Thanks Toymaker. Your argument is clear enough for me.

 

Have yu ever had letters like this then

 

 

 

ie, when yu ask them to show you which bit of the CCA allows them to do what they did, they said that the CCA does not deal with the right to terminate?

 

if so, what was your answer?

 

I have had many letters like that (I have disputes with Halifax, Morgan Stanley, Egg).

Be absolutely clear, such letters are laughably ignorant, and designed to frighten you and confuse you with use of suedo legal jargon.

For example, It is a simple fact that termination of credit card agreements is fully covered by CCA 1974.

i.e CCA clearly stipulates each party's rights in respect of termination of the credit agreement.

Put simply, the card holder (the debtor) can terminate the agreement at any time by paying all the money owed (Section 94 CCA).

The Creditor can terminate the agreement by complying with the provisions of Section 87. End of story, full stop. Everything else they throw at you is tosh.

By the way, every credit card company in UK has an illegal term in it's agreement saying "we can end this agreement at any time" . Such a term is void within the meaning of Section 173 of CCA.

 

Regards.

[cab1ne]

IMO

 

Put simply, the creditor can terminate the agreement at any time in writing and relieving you from paying all the money you owe.

 

provisions of Section 87 only cover breach

 

cab

[Guest HeftyHippo]

IMO

 

Put simply, the creditor can terminate the agreement at any time in writing and relieving you from paying all the money you owe.

 

 

LOL

 

Good man Toymaker. Thats pretty much the way I see it also

Edited March 8, 2010 by HeftyHippo

[cab1ne]

IMO

 

Put simply, the creditor can terminate the agreement at any time in writing and relieving you from paying all the money you owe.

 

/quote]

 

LOL

 

Good man Toymaker. Thats pretty much the way I see it also

 

 

cab

[toymaker1]

IMO

 

Put simply, the creditor can terminate the agreement at any time in writing and relieving you from paying all the money you owe.

 

provisions of Section 87 only cover breach

 

cab

 

You may well be right on that, but speaking for myself alone I see it differently cab. I might well be wrong.

My view of it is this:

By terminating the agreement in writing and relieving you from paying all the money you owe, the creditor, although appearing to do you a favour is actually acting outside the provisions of the law, and is laying themselves open to a repudiatory breach of contract.

My view is that it is incorrect to say that Section 87 only cover breach.

The correct interpretation of CCA is that breach is the only thing covered by S87 because CCA does not provide the creditor with any other entitlement to terminate. Termination by the creditor (in credit card agreements) is only permitted within the terms of S87 -i.e when the debtor has defaulted, and even then only when the debtor has failed to respond appropriately to the default notice.

S89 makes it clear that if the debtor brings his account back into credit in response to the default notice, then "the breach shall be treated as not having occurred" i.e. the creditor cannot then terminate the agreement.

Any possible ambiguity on this is clarified by S14 of the Explanatory Notes to CCA prepared by the Government in 2006.

S14 states that Section 87 of the 1974 Act requires a creditor to give the debtor a default notice "if he wishes to terminate the agreement".

Repeat: "if he wishes to terminate the agreement".

I think that is clear enough for the average judge.

 

Regards

Edited February 28, 2010 by toymaker1
couple of words

[twodogs]

So probably best to carry on reiterating the basic question to T Munn? i.e. Dear Sir/Madam,

When we go to court I hope you will be able to present to the court where in the CCA does it allow Egg to terminate my agreement when not in default?

Yours......

[toymaker1]

So probably best to carry on reiterating the basic question to T Munn? i.e. Dear Sir/Madam,

When we go to court I hope you will be able to present to the court where in the CCA does it allow Egg to terminate my agreement when not in default?

Yours......

 

Exactly. I couldn't put it better.

That will be crystal clear to their lawyers, who will pause for some very deep thinking.

[cab1ne]

[quote=toymaker1;

Any possible ambiguity on this is clarified by S14 of the Explanatory Notes to CCA prepared by the Government in 2006.

S14 states that Section 87 of the 1974 Act requires a creditor to give the debtor a default notice "if he wishes to terminate the agreement".

Repeat: "if he wishes to terminate the agreement".

I think that is clear enough for the average judge.

 

Regards

 

now that is interesting (looks like i need to read up on the 2006 act)

 

cab

[HP Mum]

Post # 1103.

[toymaker1]

HI just another point that i would like you to clear uop for me. Since you are saynig the termination has ended the agreement,does this mean that you accept that the termination is legal. Because if it isnt of corse then the agrement wouldnt be terminated at all.

 

If it turned out that the termination did in fact mean that the agreement was dead then isnt it possible that they court would say that this is just a partial terminatial as provided for in the act. secion 98(4)

 

 

Peter

Peter

 

I dont understand your point.

Nothing in S98 applies to credit card agreements.

S98(a) makes it clear that S98 only applies to agreements where a period for the duration of the agreement is specified in the agreement.

Credit card agreements do not contain a specified period for the duration of the agreement, consequently the provisions of S98 do not apply to credit card agreements.

Edited February 28, 2010 by toymaker1
missing word

[toymaker1]

a court can Order anything it likes. if someone hits you on the head a court can Order them to pay you compensation - despite there being no agreement that you allow someone to hit you on the head for a charge of £x.

 

Agreements that are ended correctly, via a default notice and the termination sometimes end up in court, but the agreement itself is not enforced by court - that would mean 5% of the balance being due every month and interest at the appropriate APR. Instead, the Court orders repayment at a rate the debtor can afford, and interest and charges are frozen. That's not the same as the agreement being enforced. Once the judge has made a decision, his decision overrides anything else and only the court can vary that Order.

 

If you borrow money from your friend and don't pay it back, the court can order you to do so, despite there being no agreement under the CCA1974, or any 'proper' agreement at all.

 

As you correctly say, a court can order anything it likes. But you missed a bit out in your sentence, which should read, a court can order anything it likes within what is provided for by law. The relevant law in this case is CCA 1974, therefore the court can order anything it likes within the provisions of CCA 1974. Neither the court nor Egg can conjure out of thin air provisions which are not in CCA.

[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

[cosalt]

Furthermore, if you paid anything to them subsequent to termination in March 2008, then you should should claim all of those payments back, plus interest, plus compensation.

 

 

Hi there, has anyone actually successfully claimed back payments made since this termination ?

 

I have paid them over £2.5k until they defaulted me and terminated me again !!

[twodogs]

I sent them a letter several months stating that having reviewed my finances realised that I''d been paying a DD after Egg had terminated the agreement and asked for just over £1000 back - they ignored me.

[BEC01]

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.

[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!

[basa48]

Hi

Please indicate where their is legal prscedent or legislative mention that "termination" means the ending of all Rights and obligations to both psrties under an agreement.

 

Regards

Peter

 

Peter, you MAY be right about there being no specific clause in the CCA that prevents a lender ending/terminating a contract and thus ending/terminating MAY be allowed.

 

Thing is there is nothing in there to stop it because no one expected a need for it. Why have a clause permitting termination where there is no default when there is clearly available the ability simply to restrict the credit limit to the balance each month - job done.

 

However the thing that stops Egg from doing it the way they did is nothing specific in CCA 1974 but the general law of contract i.e. A breach by anticipatory repudiation (an unequivocal indication that the party will not perform when performance is due, or a situation in which future non-performance is inevitable. An anticipatory breach gives the non-breaching party the option to treat such a breach as immediate, and, if repudiatory, to terminate the contract and sue for damages (without waiting for the breach to actually take place). There is no 'survival' clause in Egg agreements AFAIK ( and may not to be available to a party in a fundamental breach anyway) so if the debtor accepts the repudiation the contract is dead, finito, kaput and with it the rights and obligations of all parties!

Edited March 1, 2010 by basa48

[BEC01]

Have you been taking advice, Sir?

[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

[toymaker1]

Peter, you MAY be right about there being no specific clause in the CCA that prevents a lender ending/terminating a contract and thus ending/terminating MAY be allowed.

 

Thing is there is nothing in there to stop it because no one expected a need for it. Why have a clause permitting termination where there is no default when there is clearly available the ability simply to restrict the credit limit to the balance each month - job done.

 

However the thing that stops Egg from doing it the way they did is nothing specific in CCA 1974 but the general law of contract i.e. A breach by anticipatory repudiation (an unequivocal indication that the party will not perform when performance is due, or a situation in which future non-performance is inevitable. An anticipatory breach gives the non-breaching party the option to treat such a breach as immediate, and, if repudiatory, to terminate the contract and sue for damages (without waiting for the breach to actually take place). There is no 'survival' clause in Egg agreements AFAIK ( and may not to be available to a party in a fundamental breach anyway) so if the debtor accepts the repudiation the contract is dead, finito, kaput and with it the rights and obligations of all parties!

 

I'm afraid I dont agree with your interpretation of CCA.

Section 87 of CCA when read in conjuction with Section 14 of the 2006 DTI Explanatory notes, is very specific, in that it makes absolutely clear beyond any doubt that if a creditor wishes to terminate an agreement, he is required to give the debtor a default notice within the provisions of S87. That is a very simple and very precise statement which does not allow for any other interpretation than that:

(a) If the creditor wishes to terminate the agreement, then he must

(b) give the creditor a default notice.

Also, it is incorrect to say that there is nothing in there (the CCA) to stop it (creditor terminating) because no one expected a need for it. The provisions I have just described were put into the Act for that very purpose -i.e to stop uscrupulous creditors doing what Egg did.

Also, it is not the general law of contract which prevents Egg terminating, it is CCA, which is totally sovereign in matters relating to consumer credit.

The general law of contract only comes into the matter because Egg have flagrantly acted outside the provisions of the law as laid down by Parliament, and in so doing have laid themselves open to serious consequences, including breach of contract etc.

 

Regards

[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

[basa48]

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

 

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.

[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!!

[basa48]

 

Toymaker, whilst you probably have greater legal experience than me, I would suggest, that in my opinion, you are approaching this from the wrong direction.

 

‘Contract Law’ is a generic term covering all aspects of the principles of contracts developed by the courts, not statute, but inevitably embraces many Acts and legislation including the 1974 CCA.

 

Even though the 1974 Act may be the underlying regulation here, there is nothing in the Act that specifically debars Egg from ending the agreement in the manner contended and so we need to look at other legislation and principles in basic contract law.

 

It is significant that Egg, in their ‘termination’ letter, do not mention any clauses from CCA 1974, be it s76 or s87 or s98, because they do not help them. In fact they do not mention the Act at all. Their sole reliance is on this clause 20 of the terms and conditions we are supposed to have signed up to. (Interestingly I have yet to see a copy of the T&Cs that actually contains a clause 20 and in their responses to me they quote a clause 15! But that is another issue).

 

The UTCCR is our friend here in that it can be shown that clause 15 or 20 (‘Ending this agreement’) is an unfair term and thus not binding. From that it can be argued Egg ended the agreement illegally and are in breach. QED. (In fact clause 15 or 20 may even fall foul of CCA1974 s173(1) ‘Contracting-out forbidden’, but I am not sure how I would argue that one!)

 

Then there is the ‘contra proferentem’ rule which holds that any ambiguity in a term (clause?) should be interpreted against the party that imposed its inclusion, i.e. Egg. Surely a clause that says on one hand “We can end this agreement at any time…” but then goes on to say “..the agreement will continue…” is ambiguous to say the least!

 

Even if a judge allows the ‘Ending this agreement’ clause to stand and the agreement can be legally ended, Egg unequivocally state “We are ending your Egg agreement” and “…your agreement will end…”, it follows that all the terms of the agreement also end at that point (there being no qualifying clause in the agreement that allows the ‘Ending this agreement’ clause to survive the ending of the agreement). Thus there is no enduring term obliging the debtor to continue repayments.

 

There is a caveat to all this in that the innocent party should accept the rescission either implicitly (by ceasing repayments) or explicitly (by letter). A right to rescind must be exercised promptly or within a reasonable time after the discovery of the facts that authorize the right. The rule that rescission must be prompt does not operate where an excuse or justification for a delay is shown. Presumably (I hope!) ignorance of the finer points of consumer contract law by a lay person would be a justification.

 

If my arguments were to succeed it would leave Egg open to damages of not least the return of any payments made to the account by the debtor since the ending of the contract.