Section 87 and 88 Consumer Credit Act

[jd0s1]

Does this mean that the creditor has to give you a default notice BEFORE they pass it on for collection or demand the full amount?

Default and Termination

Default notices

87 Need for default notice

(1) Service of a notice on the debtor or hirer in accordance 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) to 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.

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

88 Contents and effect of default notice

(1) The default notice must be in the prescribed form and specify—

(a) the nature of the alleged breach;

(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

© if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those seven days have elapsed.

(3) The default notice must not treat as a breach failure to comply with a provision of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1)) if the seven days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.

(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it.

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid.

[jd0s1]

Anyone?

[42man]

YES is the answer....

[creditcardmug]

Absolutely, as 42man says they have to issue a Default Notice, BEFORE taking any other action.

And his must be done in a particular format to be compliant with the law.

[42man]

They must also supply a 'letter before action' also...

[version302003]

They must also supply a 'letter before action' also...

 

hi can you tell me which legislation this comes from? thanks

[wednesday1867]

Could i just ask a quick question Mint sent me a default notice, giving me so many days to pay an amount. I paid the said amount within the timescales, only by a day or two, but it was paid in the timescale. I then received a letter of termination, can they do this as i paid within the time limit, i havent checked if the default is on my credit file or not yet?

[creditcardmug]

They can terminate it at any time even if you haven't defaulted.

Relevant bit of the Act below.

 

98. Duty to give notice of termination (non-default cases).

— (1) The creditor or owner is not entitled to terminate a regulated agreement except by or after giving the debtor or hirer not less than seven days’ notice of the termination.

(2) Subsection (1) applies only where— (a)

a period for the duration of the agreement is specified in the agreement, and

 

(b)

that period has not ended when the creditor or owner does an act mentioned in subsection (1),

 

 

but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(3) A notice under subsection (1) is ineffective if not in the prescribed form.

(4) Subsection (1) does not prevent a creditor from treating the right to draw on any credit as restricted or deferred and taking such steps as may be necessary to make the restriction or deferment effective.

(5) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

(6) Subsection (1) does not apply to the termination of a regulated agreement by reason of any breach by the debtor or hirer of the agreement.

[creditcardmug]

hi can you tell me which legislation this comes from? thanks

 

I believe it's in the CPR (Civil Procedure Rules)

[wednesday1867]

So if they have terminated my account, can they still charge me interest? Could they still add a default to my credit file?

 

Only reason i ask is, this month i received the usual monthly statement, nothing more or less.

[creditcardmug]

I think the best thing to do is just ask em the question, nothing to lose, just to find out what they're up to.

[wednesday1867]

Yeah will do, been meaning to send them a letter asking why.

 

Cheers for that

 

And sorry for hi jacking

[forge 1]

can brighthouse take back good without my consent or do they need a court order