Egg credit card agreement terminated

[basa48]

whatever the reason, i contend that irrespective of whether they unwittingly or deliberately intended to terminate the agreements- those people who (again for whatever reason) carried on making monthly payments have (IMO) unwittingly or otherwise- rejected the creditors unlawful attempt to repudiate and the agreements in fact endure

 

the basis for this argument being that faced with an attempt by one party to unlawfully rescind- the performing (or injured party) has TWO choices

 

one is to ignore the attempt and hold the other party to the agreement

 

the other is to say or do some thing or act which demonstrates that the injured party has accepted the unlawful act as releiving him of his continuing obligations under the agreement or contract

 

it would seem to me that as the recipients of the unlawful attempt to terminate have, by their conduct (continuing to perform their part of the agreement) clearly demonstrated that they consider the agreement to still endure- elected the former, rather than the latter option.

 

That is an interesting concept I alluded to earlier. It is not clear just how long an innocent party has to accept a rescission, but a mitigating circumstance could be ignorance of the finer points of consumer and contract law. Egg in effect duped its customers who were less knowledgeable (at the time).

 

Of course ceasing payment is an implicit acceptance in itself.

[diddydicky]

I do hope that is not directed at me.

 

IMO a credit card is 'forever' as you put it. But with the proviso that either party can end the agreement by mutual consent, or even one party restrict its use by the other. But arbitrarily ending it is a no, no.

 

The lender if he wants can simply advise there is a £0 credit limit. As you say - a prescribed term. But that doesn't end the agreement like Egg did.

 

no "a cagger" means "one who cags" (not directed personally)

[diddydicky]

That is an interesting concept I alluded to earlier. It is not clear just how long an innocent party has to accept a rescission, but a mitigating circumstance could be ignorance of the finer points of consumer and contract law. Egg in effect duped its customer who were less knowledgeable (at the time).

 

Of course ceasing payment is an implicit acceptance in itself.

 

as is the danger of NOT ceasing payment

 

My view on danger, would be that it would be dangerous for the debtor to conduct himself in a way which was inconsistent with his regarding himself as discharged. I'm not satisfied that it is essential for the debtor to be treated as discharged that he must first give express notice of acceptance of the renunciation to the creditor and that without such notice the agreement endures. If the creditor can renounce by conduct why should the debtor be precluded from relying on his own conduct as evidence that he treats himself as discharged? As such I take the view that if the debtor intends to make a payment after renunciation he should say that the payment is exclusively for the purpose of reducing or discharging the arrears which had accumulated up to the time of renunciation. If there are no arrears he would be unwise and in danger of being treated as affirming the contract if he were to make a payment.

[diddydicky]

That is an interesting concept I alluded to earlier. It is not clear just how long an innocent party has to accept a rescission, but a mitigating circumstance could be ignorance of the finer points of consumer and contract law. Egg in effect duped its customers who were less knowledgeable (at the time).

 

Of course ceasing payment is an implicit acceptance in itself.

 

agreed- all i can say is that i am aware of at least one cagger who that did'nt save!!

[basa48]

I take the view that if the debtor intends to make a payment after renunciation he should say that the payment is exclusively for the purpose of reducing or discharging the arrears which had accumulated up to the time of renunciation. If there are no arrears he would be unwise and in danger of being treated as affirming the contract if he were to make a payment.

 

Hmmm, interesting angle and not without merit.

 

I would counter by explaining that the debtor, being a lay person and not familiar with consumer law made the payments in error on the mistaken premis he was obliged to do so. In fact he was misled by Egg's letter as to the true meaning of the term "We are ending your agreement" - we are now arguing the letter and term (in T&Cs) are unfair as they are misleading.

 

I'll have to sleep on this further. ;-)

[Guest HeftyHippo]

Read S14 of the Explanatory Notes very carefully.

For example,

it doesn't say that S87 only relates to termination as a consequence of the debtor defaulting.

And it doesn't say that termination as a consequence of the debtor defaulting is one of various methods which can be used by a creditor to terminate an agreement.

And it doesn't say that a creditor may take into consideration commercial factors in deciding to terminate an agreement.

And it doesn't say that a creditor can terminate an agreement at any time.

What is does say is deceptively simple, in the very clear and

unambiguous and powerful statement that:-

Section 87 requires a creditor to give the debtor a default notice if he IF HE WISHES TO TERMINATE THE AGREEMENT.

(NOT if he wishes to terminate the agreement because the debtor has defaulted).

 

If a creditor does not default, and does not wish to terminate the agreement by paying back all the money he has borrowed, then the agreement continues into perpetuity.

 

I think what you're trying to do is create a new interpretation of CCA1974. I'm not against that, but you should recognise that it is a NEW interpretation.

 

This is Section 14 of the 2006 Explanatory notes (I have read them carefully)

Section 14: Default notices

36. Section 14 amends section 88 of the 1974 Act to extend from seven to 14 days the minimum period after which a creditor or owner may take action in respect of the agreement after having issued a default notice.

Ok, that bit we all know about and isn't relevant

 

 

This bit is what youre talking about.

Section 87 of the 1974 Act requires a creditor or owner to give the debtor or hirer a default notice in the prescribed form if he wishes to terminate the agreement, demand earlier payment of a sum, recover possession of any goods or land, treat any right conferred on the debtor or hirer by the

agreement as terminated, restricted or deferred, or to enforce any security. Section 88 is also amended to allow the Secretary of State to prescribe information in the default notice to include any matters relating to the agreement (e.g. information about whether the agreement includes a term providing for the charging of post-judgment interest).

Yu are correct, it doesn't say this only applies to accounts in default. Nor does it say it applies to default and non-default accounts either. So its about interpretation.

 

If we look at CCA1974 s87:

DEFAULT AND TERMINATION

Default notices

87-0) Service of a notice on the debtor or hirer in accord-

ance with section 88 (a " default notice ") 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) toy terminate the agreement, or

(b) to demand earlier payment of any sum, or

© to recover possession of any goods or land, or

(d) to treat any right conferred on the debtor or hirer by

the agreement as terminated, restricted or deferred, or

(e) to enforce any security.

We can see straight away that the section only deals with accounts in default.

I've boldened the relevant bit.

 

What youre now saying Toymaker is the 2006 Notes, extend that to non-default accounts by virtue of not repeating the phrase "by reason of any breach by the debtor". that is a BIG stretch in my opinion.

 

Why would the authors of those notes repeat the phrase? They are talking about a section of 1974 Act that is specific to, and clearly so, accounts in default. If they meant to open up those creditor obligations to non-default accounts, they would have said so. The fact that they didn't say so suggests strongly that they had no intention of changing the creditor obligations

 

However, if that is what you intend to argue, good luck. I would hope that you succeed, but doubt that you can, let alone will, win, because the Default Notice content is separately specified and it is clear that it relates to correcting a breach by the debtor ie, it describes what the breach is, it states what has to be done to rectify, and the time by which it must be done.

 

So in the case of a non-default account, what breach exists -> none. What must be done to rectify -> nothing.

 

So after 14 days, when nothing has been done by the creditor and he has complied with the requirements of the DN (to do nothing because nothing needed to be done) how can the creditor terminate? He has complied with the DN, therefore, the breach is treated as 'never existing' and the Act PREVENTS the creditor terminating the agreement. Your own argument works against you.

 

 

I think there is a danger of becoming blinkered and focussing on a single argument and tactic which is why I attempted to open up the discussion before. As I have made the point before, the 1974 Act is not the only piece of legislation that affects the agreement, the Law of Property Act also applies, because the CCA does not address the transfer of rights of an agreement. Equally, it does not address the closure or termination of non-default credit card account or agreements, therefore, the judge will have to make a decision about what law does address the issue, if any.

 

And there you have it, a judge will have to decide what law covers this issue, if any, and with that judge comes his own opinions, influences, bias, hormones, moods and gut feelings. Thus, he may be persuaded by exactly the kind of argument I put forward before, you know, that a company has the right to protect itself from influences that weren't envisaged when the CCA was drawn up, and in the absence of item-specific regulatory clauses in the Act, they have a right, and a corporate legal obligation to address the issue themselves, and as such, the right to end an agreement that exposes them to unjustifiable risk or is otherwise undesirable is reasonable as long as the debtor is not penalised.

 

However, Toymaker. You seem determined to continue to believe that your interpretation is the ONLY one possible. So, indulge me, and explain how a creditor can 'reconstitute' an agreement, mark your credit file, hire debt collectors to hound you, and lodge court papers in pursuit of a debt, all without producing the original agreement. It was my understanding that without the original agreement NONE of that was possible (although at least some of it went on) because CCA1974 prevents them from enforcing a debt until they have produced a copy of the actual agreement (with or without the signature box but that's specified in another piece of legislation, another example of something other than CCA1974 being applicable). So where in the CCA 1974 or 2006 does it say that a creditor can fabricate (that's essentially what they're doing and unless you have the original you can't disprove what they say) what it says you agreed to and use that as a basis for enforcement?

 

Believe me, I'm on your side, but if you can't overcome the arguments of an amateur like me, thinking it up as I go along, how will you defeat a practised barrister? It's no good saying the Act doesn't say anything about a creditor not being allowed to react to commercial pressures and close accounts, it doesn't say anything about them being obliged to keep an account open in perpetuity either. At the end of the day, the Act does not explicitly deal with this area, and it will be a matter of interpretation by the judge. He may very well decide that the Act covers all acts and methods of termination, and anything outside those instances described in the Act are not allowed. Equally, he may decide that the Act could not possibly cover all possible scenarios, or that it was defective and did not cover this scenario, and as such HE must create a precedent and decide if it is fair for non-default accounts to be closed.

 

In the case of the latter he will have to take into account ALL factors, not just the Act, and that includes simple financial jurisprudence and the legal obligations of the Directors to protect the shareholders' interests. As such, everything not specifically prohibited by CCA (and perhaps even some that are) is fair game. You need to be prepared for that. Blinkers will serve only to allow you to be blindsided.

Edited March 11, 2010 by HeftyHippo

[Guest HeftyHippo]

Hmmm, interesting angle and not without merit.

 

I would counter by explaining that the debtor, being a lay person and not familiar with consumer law made the payments in error on the mistaken premis he was obliged to do so. In fact he was misled by Egg's letter as to the true meaning of the term "We are ending your agreement" - we are now arguing the letter and term (in T&Cs) are unfair as they are misleading.

 

I'll have to sleep on this further. ;-)

 

My letter from Egg says

 

"We are ending your Egg Card Agreement - account number xxx"

 

It states that this is being done in accordance with paragraph xx of the agreement

 

further down the page:

"You must continue to pay at least the agreed monthly repayment each month until any debit balance on the account has been repaid in full. The Egg card Agreement continues to apply until the balance is repaid in full."

 

Seems pretty clear that those not pretty competent in various aspects of contract and consumer law would not think they had any choice but to maintain payments.

 

However, that is a secondary argument, only applicable if Egg did have the right to terminate. If they didn't have the right, of course we wouldn't be obliged to continue payments.

Edited March 11, 2010 by HeftyHippo

[diddydicky]

toymaker

 

read the act and not the explanetary notes!!

[basa48]

HeftyHippo

 

I like the way your mind works!!

[toymaker1]

toymaker

 

read the act and not the explanetary notes!!

 

It seems to me that what you are saying is that a creditor's representative at court should say to the judge "dont read the explanatory notes when considering all the points put forward by the debtor, because they might spoil my argument".

[toymaker1]

 

If we look at CCA1974 s87:

We can see straight away that the section only deals with accounts in default.

 

the CCA does not address the closure or termination of non-default credit card account or agreements

Non default regulated credit agreements are dealt with by S98.

[diddydicky]

My letter from Egg says

 

"We are ending your Egg Card Agreement - account number xxx"

 

It states that this is being done in accordance with paragraph xx of the agreement

 

further down the page:

"You must continue to pay at least the agreed monthly repayment each month until any debit balance on the account has been repaid in full. The Egg card Agreement continues to apply until the balance is repaid in full."

 

Seems pretty clear that those not pretty competent in various aspects of contract and consumer law would not think they had any choice but to maintain payments.

 

However, that is a secondary argument, only applicable if Egg did not have the right to terminate. If they did have the right, of course we would be obliged to continue payments.

 

what does para XX of the agreement say??

[toymaker1]

My letter from Egg says

 

"We are ending your Egg Card Agreement - account number xxx"

 

It states that this is being done in accordance with paragraph xx of the agreement

 

Egg must have changed their T/C's.

When I had an Egg account it didn't have a paragraph xx in the agreement.

[Guest HeftyHippo]

It seems to me that what you are saying is that a creditor's representative at court should say to the judge "dont read the explanatory notes when considering all the points put forward by the debtor, because they might spoil my argument".

Actually, I think he's pointing out that it is the Act that regulates the agreements, not the notes, and the judge may use the notes as a guide to the Act. At the end of the day, the notes don't form part of the Act and don't have any authority of their own, they certainly don't usurp the authority of the Act.

 

Non default regulated credit agreements are dealt with by S98.

Toymaker, I'll give you a hint: if you chop and change your argument in court, not only will you lose but you'll get laughed at as well.

 

This is what you said earlier:

Read S14 of the Explanatory Notes very carefully.

For example,

it doesn't say that S87 only relates to termination as a consequence of the debtor defaulting.

 

blah blah

 

What is does say is deceptively simple, in the very clear and

unambiguous and powerful statement that:-

Section 87 requires a creditor to give the debtor a default notice if he IF HE WISHES TO TERMINATE THE AGREEMENT.

(NOT if he wishes to terminate the agreement because the debtor has defaulted).

In one breath yesterday you were arguing that S87 applies and that a creditor must follow that section and issue a DN before he can terminate an account even when the account is not in default (very clear, unambiguous and powerful you called it), whilst today, you're arguing that non-default accounts are dealt with by s98. Which is it? Do you know? Do you think about things before you post or are you so hell bent and blinkered about defending your stance at all costs that logic and consistency go out of the window?

 

You're worrying me big time because if your court case goes tats up, it may screw it for all of us, and at the moment, you don't seem able to form a coherent argument.

 

If you think our picking at your argument is bad, it'll be nothing compared to how the 2 golf buddies in the court room will do it.

 

I would urge you to stop and think about the arguments you are using here and look at how they have been countered. I think Egg were wrong to terminate in the way they did, but I also think that your arguments are inconsistent and somewhat lacking in common sense and logic and will not win.

 

If you listen to the counter arguments here, you case will be stronger. The converse also applies.

[Guest HeftyHippo]

what does para XX of the agreement say??

 

Egg must have changed their T/C's.

When I had an Egg account it didn't have a paragraph xx in the agreement.

 

Actually boys, those are good points.

 

I'm reluctant to actually identify exact numbering in case it helps Egg narrow down my or other identities, but the para referred to does not exist in the original agreement that I still have.

 

In the updated terms they sent in my CCA request, the para referred to says:

"As long as we have sent you any notice required under the Consumer Credit Act 1974, we can ask you to pay the full amount which you owe us under this agreement if you:

 

 

• seriously or repeatedly fail to comply with your obligations under this agreement;
  
• die; or
  
• become bankrupt, sequestrated, or if a proposal is made for a voluntary or other arrangement with all or any of your creditors."
  

Obviously, they'd have a problem getting a reply to their request in the event of 2)!

 

But there you go, the para referred to only gives them the rights they hold under the "CCA accounts in default" section anyway. So nowhere in the letter do they refer to what the claim to be a legitimate clause in original or amended agreement to terminate without default. The only power they claim is to act with CCA1974 and only after complying with the requirements of the Act. Unless they're saying that in accounts that are repeatedly errant but brought back within terms before they are allowed to terminate, they have the right to self-protection as I said before.

 

Everyone should go check their Egg agreement and updated terms to see if they have different paragraphs.

[toymaker1]

Actually, I think he's pointing out that it is the Act that regulates the agreements, not the notes, and the judge may use the notes as a guide to the Act. At the end of the day, the notes don't form part of the Act and don't have any authority of their own, they certainly don't usurp the authority of the Act.

Of course it is the Act which regulates the agreements, not the notes, but, as you correctly say, the judge may use the Notes as a guide. When the judge does so, the judge will see that Notes very clearly explain what the Government intended S87 to mean, which is that if a creditor wishes to terminate an agreement he must give the debtor a default notice. Obviously, if the debtor does not default then it is clearly not possible for the debtor to give him a default notice, in which case he cannot terminate the agreement, because there is nowhere else in the Act where he will find any provision which entitles him to terminate an agreement except within the provisons of S87. It's termination consequent to default or no termination.

[toymaker1]

This is what you said earlier:

 

In one breath yesterday you were arguing that S87 applies and that a creditor must follow that section and issue a DN before he can terminate an account even when the account is not in default (very clear, unambiguous and powerful you called it), whilst today, you're arguing that non-default accounts are dealt with by s98. Which is it? Do you know?

 

 

S 98 does deal with termination in non-default cases, and S98 also states that the only non-default agreements which can be terminated under S98 are those with a fixed duration. i.e. credit card agreements do not have a fixed duration, so therefore cannot be terminated by the creditor under S98.

[Guest HeftyHippo]

yep, you're right in both cases. The only thing is, Egg haven't relied on either section of the Act to terminate. They've relied on a clause in their own agreement and phrased the letter to imply they have a right to terminate at any time.

 

Well, in my case the clause they quote only refers to them obeying the requirements of the Act in respect of termination. The Act doesn't address non-default termination, so I guess they're trying to claim that their clause gives them the right to terminate if they follow the requirements of the Act. The Act doesn't require any thing to be done for non-default cases, so they don't have to do anything prior to termination.

 

Further down the letter it says the decision has been made because their policy requires them to maintain an acceptable level of risk, and they have assessed my account profile against their strategies. Obviously somewhere along the line my account didn't measure up to expectations. I don't believe there was any particular problem with the account. I may have been late paying once or twice or even missed payments but it wasn't a perpetual thing, and when they terminated I don't think I was in arrears. I had certainty not had a DN.

[toymaker1]

yep, you're right in both cases. The only thing is, Egg haven't relied on either section of the Act to terminate. They've relied on a clause in their own agreement and phrased the letter to imply they have a right to terminate at any time.

 

Well, in my case the clause they quote only refers to them obeying the requirements of the Act in respect of termination. The Act doesn't address non-default termination, so I guess they're trying to claim that their clause gives them the right to terminate if they follow the requirements of the Act. The Act doesn't require any thing to be done for non-default cases, so they don't have to do anything prior to termination.

 

Further down the letter it says the decision has been made because their policy requires them to maintain an acceptable level of risk, and they have assessed my account profile against their strategies. Obviously somewhere along the line my account didn't measure up to expectations. I don't believe there was any particular problem with the account. I may have been late paying once or twice or even missed payments but it wasn't a perpetual thing, and when they terminated I don't think I was in arrears. I had certainty not had a DN.

 

Term 20 in the Egg agreement, which says that Egg can end the agreement at any time, is a void term. S173 of CCA says that a term contained in an agreement is void if it is inconsistent with a provision for the protection of the debtor contained in the Act.

For a start, term 20 is clearly inconsistent with Sections 87 and 98 of the Act.

[Guest HeftyHippo]

I'm not sure it is inconsistent.

 

In my case the term 20.2 says

 

"As long as we have sent you any notice required under the Consumer Credit Act 1974, we can ask you to pay the full amount which you owe us under this agreement if you:

 

 

• seriously or repeatedly fail to comply with your obligations under this agreement;
  
• die; or
  
• become bankrupt, sequestrated, or if a proposal is made for a voluntary or other arrangement with all or any of your creditors."
  

in the event of non-default, they are not required to send any notice, so according to their logic, they can simply tell you its ended.

 

According to our logic, the Act does not deal with or allow the termination of non-default accounts, so although clause 20.2 is valid, it only applies to cases covered by the Act, ie default and time bound accounts, not non-default accounts, so they arbitrarily ended my account without even any clause in the agreement claiming to allow it...

 

As I said, we have 2 different interpretations, one where the Act does not cover non default termination, and one (ours) where it does not mention it because it does not intend to allow it.

[toymaker1]

I'm not sure it is inconsistent.

 

In my case the term 20.2 says

 

"As long as we have sent you any notice required under the Consumer Credit Act 1974, we can ask you to pay the full amount which you owe us under this agreement if you:

• seriously or repeatedly fail to comply with your obligations under this agreement;
  
• die; or
  
• become bankrupt, sequestrated, or if a proposal is made for a voluntary or other arrangement with all or any of your creditors."
  

 

Right, so I take it that they have sent you a notice required under the Consumer Credit Act 1974. What notice was it? It is important to know.

[Guest HeftyHippo]

No, they never sent anything because I wasn't in default, so there was no need to send me any notice. The first I knew was when I got the letter saying "We are ending your Egg Card agreement - account number xxxxx" (that sentence apart from the account number which obviously isn't xxxxx, is verbatim including capitalisation, spacings and hyphens)

[toymaker1]

No, they never sent anything because I wasn't in default, so there was no need to send me any notice. The first I knew was when I got the letter saying "We are ending your Egg Card agreement - account number xxxxx" (that sentence apart from the account number which obviously isn't xxxxx, is verbatim including capitalisation, spacings and hyphens)

 

I'm finding this a bit confusing.

I'm not quite sure why you posted what Egg term 20.2 says. That seems to be just a statement of what term 20.2 is. Do you have a point to make about term 20.2?

Regards

[toymaker1]

No, they never sent anything because I wasn't in default, so there was no need to send me any notice. The first I knew was when I got the letter saying "We are ending your Egg Card agreement - account number xxxxx" (that sentence apart from the account number which obviously isn't xxxxx, is verbatim including capitalisation, spacings and hyphens)

 

So how did you respond when Egg terminated your agreement?

Are you still paying them?

[Guest HeftyHippo]

Point 20.2 is the clause they rely on in the termination letter to justify closure of the account.

 

"...under condition 20.2 of your Egg Card agreement, we are giving you formal notice that your agreement will end 35 days after the date of this letter."

 

20.2 effectively states that they will follow the requirements of the CCA when requesting early payments.

 

Because my account was not in default, they didn't need to issue any notices (according to their logic). according to our logic, the CCA does not address or allow termination of non-default accounts (like mine was)