CCA, DCAs and the Unfair Commercial Practices Directive

[citizenB]

Just had a thought...Thier issue of Goode would be out of date as the UCPD, which is part of the CPUTR 2008 only came into efecct on 26th May 2008. This legislation defines anyone chasing money for the purposes of s77 and 78 as the 'creditor'.

 

Good thinking babybear

[babybear39]

Good thinking babybear

 

Blame my weird brain for that CB

[MAGDA]

I was just querying on another thread, we all keep quoting UCPD, and I know that one branch of TS did state that this affected current thinking on whether or not the DCA is the creditor. However, I have been unable to find anything specific in this document actually stating (in black and white) this fact. I am not trying to pick anyone up on this, just would be useful to be able to quote where exactly it states this.

[MAGDA]

To reiterate our policy for your consideration on this point, an assignee can neither comply with nor breach a s77-79 Consumer Credit Act 1974 request as the act states that such demands are the remit of the 'Creditor'. Schedule 1 for s167 of the Act confirms a s77-79 breach as a "Failure of creditor under fixed-sum credit agreement to supply copies of documents etc" as a Level 4 offence.

An assignee falls outside the definition of a 'Creditor' unless they have the liability of the creditor. The liability of a creditor cannot pass to another through assignment. An assignee is therefore an 'owner' ad defined at s189 of the act, and not a 'creditor'.

 

 

More to the point, what did T/S make of it?

 

David

 

They seemed to agree with Link and I think they seemed quite pleased to think that Link may be off the hook.

Edited September 4, 2008 by MAGDA
typo

[UK26]

S.189 of CCA 1971

 

Definitions-:

"creditor" means the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit Agreement, includes the prospective creditor;

 

I was just querying on another thread, we all keep quoting UCPD, and I know that one branch of TS did state that this affected current thinking on whether or not the DCA is the creditor. However, I have been unable to find anything specific in this document actually stating (in black and white) this fact. I am not trying to pick anyone up on this, just would be useful to be able to quote where exactly it states this.

[make them aktiv runners]

Frame the letter. It is a priceless confession.

An assignee falls outside the definition of a 'Creditor' unless they have the liability of the creditor. The liability of a creditor cannot pass to another through assignment. An assignee is therefore an 'owner' ad defined at s189 of the act, and not a 'creditor'.

 

For Link's benefit this is how S189 defines 'owner'

 

“owner” means a person who bails or (in Scotland) hires out goods under a consumer hire agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer hire agreement, includes the prospective bailor or persons from whom the goods are to be hired;

As they do not have 'rights and duties' they could only be owner if party to the original contract.

[MAGDA]

Frame the letter. It is a priceless confession.

 

 

For Link's benefit this is how S189 defines 'owner'

 

“owner” means a person who bails or (in Scotland) hires out goods under a consumer hire agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer hire agreement, includes the prospective bailor or persons from whom the goods are to be hired;

 

As they do not have 'rights and duties' they could only be owner if party to the original contract.

 

Yes, I see what you mean, as the owner is the person to whom the rights and duties have passed, and Link are claiming not to have the duties, they cannot therefore be the the owner, unless as you say, they were party to the original contract, which they were not. Have I understood this correctly?

[UK26]

so what your saying is we are all doomed in the fact, we now need to issue all our S.78 or S.77 request to the OC and not the new owner

 

Example in my case

 

Barclaycard Debt sold to HFO Services

 

sent S.78 request to HFO Services

 

so what you now saying is in my case, i need to send to Barclaycard?

[make them aktiv runners]

Yes Magda.

 

Plus of course a credit card or loan creates a consumer credit agreement, not consumer hire agreement.

Edited September 4, 2008 by make them aktiv runners
Add more

[MAGDA]

Thanks Aktiv, that certainly sheds light on the subject, magda

[babybear39]

No UK26, the DCA currently chasing you has the obligation to supply now under UCPD.

[noomill060]

"creditor" means the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law...

 

I think BB is saying that UCPD represents an "operation of law" by which an assignee may now be regarded as a creditor.

[babybear39]

Yes.

[make them aktiv runners]

Operation of law can only be decided by a judge.

 

Babybear did TS ever give you an explanation of their findings? I ask because the OFT guidelines are pretty clear in stating that nothing in law has changed. My personal opinion is over the misleading aspect and the fact that no matter how factual a statement is, the average consumer will react differently through lack of knowledge, ie the DCA's have to appear to take on creditor duties even if they are not legally.

[babybear39]

The letter in post #1 was TS final response even though 1st crud were the owners of the account not just equitable assignees.

 

In short, they didn't get my argument that 1st crud were in fact the creditor, unless 1st crud lied about the status of the account:mad:

[MAGDA]

The letter in post #1 was TS final response even though 1st crud were the owners of the account not just equitable assignees.

 

In short, they didn't get my argument that 1st crud were in fact the creditor, unless 1st crud lied about the status of the account:mad:

 

The problem with just stating that the CUPD has now been incorporated into UCPTR 2008 is that it is very vague, and TS don't appear to clarify their statement with a specific reference to anything within the legislation. To me, it seems a bit like just quoting the Consumer Credit Act, rather than a specific section to back up your argument. I think if you just quoted the CUPD to a court, they would ask that you be more specific and ask how infact this legislation does change thinking on whether the owner (to whom the debt has been assigned) is the creditor, with the accompanying duties. Just my opinion. Magda

[babybear39]

It's all in here MAGDA:

 

http://www.consumeractiongroup.co.uk/forum/faqs-please-read-these/146460-consumer-protection-unfair-trading.html

[smt37]

This is all a bit confusing. On the OFT website (http://www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/CCA2006/unfair/), it says:

 

Unfair relationships

 

The Consumer Credit Act 1974 enables borrowers to challenge unfair credit agreements in court and obtain redress, if the overall relationship is unfair to the borrower.

This is in addition to an enhanced ability for consumers to take disputes to the Financial Ombudsman Service (FOS). See alternative dispute resolution scheme.

The provisions were introduced by the Consumer Credit Act 2006. They applied to new agreements from 6 April 2007, and to pre-existing agreements from 6 April 2008. Agreements completed before the new provisions took effect remain subject to the previous extortionate credit bargains provisions. [comment: does this last sentence mean agreements before 1974 Act? The last two sentences appear to contradict each other!]

The 2006 Act also enhanced the right to apply for a time order, which is a court procedure that can give borrowers more time to repay a debt.

 

The unfair relationships provisions

Section 140A of the 1974 Act (as amended) provides that a court may determine that the relationship between a lender and a borrower arising out of a credit agreement (or the agreement taken with any related agreement) is unfair to the borrower because of:

• any of the terms of the credit agreement or a related agreement
  
• the way in which the lender has exercised or enforced its rights under the credit agreement or a related agreement, or
  
• any other thing done (or not done) by or on behalf of the lender either before or after the making of the credit agreement or a related agreement.
  

The courts have a wide range of powers where a credit relationship is found to be unfair, including:

• altering the terms of the credit agreement or a related agreement
  
• reducing the amount payable by the borrower
  
• requiring the lender to refund money to the borrower
  
• removing any duty placed on the borrower under the agreement , and
  
• imposing requirements on the lender or an associate.
  

In addition, where unfair relationships harm the collective interests of consumers, the OFT and other enforcers (including local authority trading standards services) can take enforcement action under Part 8 of the Enterprise Act 2002. [Really? Not yet they haven't... ]

The OFT has published guidance on Part 8 action and unfair relationships. See Unfair relationships - Enforcement action under Part 8 of the Enterprise Act 2002.

 

For a credit card debt that is being chased by a DCA (who we have determined is a creditor now) has no agreement under the 74 Act, can the debtor apply to a court for the borrower's duty to be resolved as nothing outstanding once and for all?

 

I've read of so many cases where the DCA's fail in court and then cannot chase the debt, so they sell it on and the debtor has to start the whole process again constantly looking out for new DCA letters for the next six years until it's statute barred and even then they still try it on.

 

If a CCA cannot be found, then there must be a way to avoid having to wait for 6 years without paying anything to rely on the debt being written off under the statute barred provisions.

[smt37]

I think I might try this and apply to the court to have the alleged debt that 1st Credit are giving me grief over. The link to Unfair relationships - Enforcement action under Part 8 of the Enterprise Act 2002 is guidance from the OFT explaining this in more detail (47 pages) and it appears to me that the amendments are made to the 1976 Act, so that the changes applied by the 2006 Act are made retrospectively:

 

"The OFT published initial guidance in December 2006. We are now

updating this in the light of developments – in particular, the issue of

new fitness guidance under the 1974 Act5 and the implementation of

the Unfair Commercial Practices Directive"

Relevant sections copied and pasted...

 

2 THE UNFAIR RELATIONSHIPS PROVISIONS

2.1 The provisions relating to unfair relationships are set out in sections 140A to 140C of the 1974 Act.[As inserted by sections 19 to 21 of the 2006 Act] They replace the extortionate credit bargains provisions in sections 137 to 140 of the Act.

2.2 The unfair relationships provisions applied to new agreements from 6

April 2007. Where an agreement was entered into before that date, the

provisions applied from 6 April 2008 unless the agreement was completed by then. Completed agreements remain subject to the extortionate credit bargains provisions. [completed = finished/settled]

...

3.4 It is for consumers to seek redress for themselves as individuals. In the case of unfair relationships, this might be through an application to the court for an order against the business concerned, as described above. Alternatively, the consumer may make a complaint to the business, or (having done so) may seek resolution of the dispute by approaching the

Financial Ombudsman Service (FOS) which will determine disputes according to what is fair and reasonable.

3.5 In practice, the OFT anticipates that most consumers will be likely to

seek out-of-court resolution of disputes rather than initiate court

proceedings, which may be costly and time-consuming. Nevertheless,

the unfair relationships provisions are an important additional protection

for consumers, and may be especially useful for borrowers facing court

proceedings for enforcement or repossession

IMPORTANT PART

The unfair relationships test

3.10 It is for the court to determine in an individual case whether the

particular credit relationship is unfair to the borrower. In doing so the

court must have regard to all relevant matters, which may include in

particular the circumstances of the individual borrower and the nature of

the relationship between the parties.

3.11 A finding in one case may not necessarily be repeated in another, even if the same terms or practices are involved, since the circumstances may be different. For example, in one case the lender may be found to have exploited the borrower's vulnerability or lack of understanding, or failed to provide relevant information, and so caused detriment to the particular consumer. Different facts may apply in other cases.

3.12 The Act does not define an unfair relationship beyond setting out in general terms the classes of factors which can give rise to such relationships. This provides the courts with maximum flexibility in considering unfairness, and avoids unduly constraining them in individual cases.

3.13 It is therefore not possible, in advance of cases decided by the courts, for the OFT to provide definitive guidance on the meaning of the unfair relationships test or how it is likely to be applied by the court. We will however consider amplifying the current guidance in the light of relevant court judgments as and when these come to our attention.

3.14 It is nevertheless possible to set out some general principles based on the formulation of the statutory test in section 140A. These will not in

any way be binding on the court, but in the OFT's view may underpin

the court's interpretation of the provisions in individual cases. They will

in any case be relevant to the OFT's consideration of possible Part 8

action in relation to unfair relationships.

3.15 As noted above, an unfair relationship may arise by virtue of:

(a) the terms of the credit agreement (or a related agreement)

(b) the way in which the lender has exercised or enforced its rights under

the agreement (or a related agreement), or

© any other thing done (or not done) by or on behalf of the lender either

before or after the making of the agreement (or a related agreement).

3.16 The meaning of (a) and (b) is fairly straightforward. In the OFT's view category © is intended to be as broad as possible, to ensure complete flexibility for the courts. It encompasses both acts and omissions, such as where the lender (or an employee, agent or associate) has failed to take certain steps which, in the interests of fairness, he might reasonably be expected to have taken.

3.17 In our view, category © would include, for example, pre-contract

business practices (such as advertising) and post-contract actions not

based on a right (such as demanding sums of money the consumer has

not agreed to pay). Relevant omissions might include failure to provide

key information in a clear and timely manner (or at all), or to disclose

material facts. Category © would also encompass acts or omissions

which are non-commercial.

3.18 For the purposes of this guidance, it may be helpful to group the

potential triggers for action under the unfair relationships provisions

under two broad headings – contract terms and business practices. This is discussed further in chapter 4 of this guidance. It should be noted,

however, that an act or omission may give cause for concern under

section 140A even if it is one-off and so does not amount to a practice

within the usual meaning.

...

3.20 There is also no special definition of unfair in this context. However, this is not an unfamiliar concept in consumer protection generally, or the

Office of Fair Trading regulation of financial services in particular. Closely related legislation and associated jurisprudence and guidance can provide tests and examples of unfairness which may be relevant to the court's

consideration of a possible unfair relationship.

 

I realise this is OFT guidance based on the law, but it's pretty clear to me: if a DCA breaks its own industry code of practice and breaks the relevant laws, then the debtor (proven debt or otherwise) has demonstrated that they have acted unfairly using all three tests above (3.15) (including (a) if there is no CCA available) and a judge clearly has the power to rule that their practice is unfair and could potentially instruct the debt to be void there and then.

 

Nobody minds having to pay back real debts, but I believe that most people come here for advice once they start getting real problems from the industry. It seems that we finally have redress .

 

Any legal bods out there care to comment? I'm in the legal profession myself, but would like opinions from others.

 

It's here if anyone wants to read it in full:

 

http://www.oft.gov.uk/shared_oft/business_leaflets/enterprise_act/oft854.pdf

 

[smt37]

...

 

And the guidance on how to do it:

 

PRACTICE DIRECTION – type="start" timestamp="1167928462736"CONSUMER CREDIT ACT 2006 – UNFAIR RELATIONSHIPStype="end" timestamp="1167928462736" - This Practice Direction Supplements CPR Rule 7.9

 

And the form (N1):

 

The requested resource (/HMCSCourtFinder/tiles/Her Majesty's Courts Service -Forms and Guidance) is not available

[MAGDA]

Hi BB, would you mind if I mention to TS in Caerphilly that it is actually Rhondda TS that has stated that the DCA is the creditor for the purpose of s77-78, as I think this will carry more weight, than just advising them of this in a general kind of way and not mentioning where it originated from. I know I have already mentioned the UCPD etc to them, but I think as Rhondda has clarified this point, it might be beneficial if TS in Caerphilly confirm this with them They will probably contact Rhondda, especially as they are both in Wales, but obviously I, or they, (Caerphilly) do not know your identity and also will not mention anything about the letter being posted on here. Let me know if you think this is ok, many thanks, Magda

[make them aktiv runners]

smt37 your enthusiam is great, however your second post relates to extortionate credit and the other the lender itself. Only picking you up on this because it is relative to who must be the defendent due to the technical wording.

[smt37]

The letter in post #1 was TS final response even though 1st crud were the owners of the account not just equitable assignees.

 

In short, they didn't get my argument that 1st crud were in fact the creditor, unless 1st crud lied about the status of the account:mad:

 

Creditor = DCA when Assigned ('74 Act)

Creditor = OC when DCA acting on behalf of (UCPD and OFT guidance)

 

The OFT guidelines for Unfair Relationships state:

 

Section 140A(1)© extends to things done (or not done) on behalf of the

lender. This would include the lender's employees or agents. It may also

include a broker or other intermediary, or a debt collector, where that

person is acting on behalf of the lender. As such, his actions or inactions

may be relevant to whether there is an unfair relationship.

 

I can't imagine that an OC would like to receive a court order as a result of a 'typical' DCA's actions

 

[babybear39]

Hi BB, would you mind if I mention to TS in Caerphilly that it is actually Rhondda TS that has stated that the DCA is the creditor for the purpose of s77-78, as I think this will carry more weight, than just advising them of this in a general kind of way and not mentioning where it originated from. I know I have already mentioned the UCPD etc to them, but I think as Rhondda has clarified this point, it might be beneficial if TS in Caerphilly confirm this with them They will probably contact Rhondda, especially as they are both in Wales, but obviously I, or they, (Caerphilly) do not know your identity and also will not mention anything about the letter being posted on here. Let me know if you think this is ok, many thanks, Magda

 

That's ok MAGDA, just say you heard from a friend and they showed you a letter from RCT TS

[MAGDA]

That's ok MAGDA, just say you heard from a friend and they showed you a letter from RCT TS

 

Hi BB, many thanks and will let you know how it goes, Magda:)