Consumer Credit Act 1974 (CCA 74)

[PainInTheNeck]

Hi

Recently I have been hearing about changes to the Consumer Credit Act 1974 (CCA 74) about the majority of credit agreements been unenforceable.

 

A few of the reasons being:

 

• The rate of interest is not shown on the agreement
  
• The agreement is not signed
  
• Number of installments not shown
  
• Dates not in place
  
• Total amount repayable not shown
  
• Amount of credit borrowed
  
• No Signature
  
• The agreement does not state correctly how the borrower will make repayments
  

I have 2 agreements with CIT Group (DELL Financial Services) and I send them 2 letters asking to cancel the agreement as I’m no longer trading, I have reduced the amount I pay by half as I can no longer pay the full amount.

 

They seem to have ignored both letters and I’m keep getting phone calls from a credit company asking for payment. I’m now blue in the face explaining to this company my situation but they just are not listening. I have phoned CIT in Ireland and I get passed from 1 department to another until eventually I either get passed to a dead line, or “we will phone you back tomorrow” which they never do.

 

Anyway after looking at the credit agreements I have noticed the following.

 

1 is not signed by CIT and does not have date

Neither have the APR rate on the agreement,

Neither have total amount payable,

Neither have total credit borrowed.

 

So my question is this, ARE these agreements legal as it seems they are missing required information.

 

Thanks for any help

GP

[phatram]

Would you post the agreements for people to look at? Photobucket is good.

Remove all your details tho' beforehand.

[PainInTheNeck]

Hi phatram

Please find image of agreement, this agreement was the one not signed by CIT, both are the same layout.

[PainInTheNeck]

As you can see, it does not have the APR rate, total amount payable

[42man]

CCA RULES FOR PRESCRIBED TERMS

CONSUMER CREDIT ACT

8.2 What if prescribed terms are missing or incorrect?

 

s127(3) provides that the court may not make an enforcement order unless a document containing all the prescribed terms of the agreement was signed by the debtor – see Q1.21.

 

If therefore any of the prescribed terms is missing, or incorrect, the agreement is not enforceable against the debtor, and the court is precluded from making an enforcement order.

 

 

8.3 What are the prescribed terms?

 

The prescribed terms specified in Sch 6 are as follows:

 

* amount of credit – see Q8.

 

* credit limit – see Q8.5

* repayments – see Q8.9.

* rate of interest – see Q8.6

 

Sch 6 was not amended by the 2004 Regulations.

IS MY AGREEMENT ENFORCEABLE( Via section 127(3) CCA1974)

PRESCRIBED TERMS FOR THE PURPOSES OF SECTIONS 61(1)(0) AND 127(3) OF THE

CONSUMER CREDIT ACT 1974 Taken from sced.6(1983/1553) regulations

(If you just want to find out, skip the bits in between the stars it’s just some extra information)

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

 

How does unenforceable differ from enforceable with a court order only?

When an agreement is unenforceable it means that the court or the judge cannot make a ruling on it. The court cannot make it enforceable.

When an agreement is enforceable only by ruling of the court it means that the agreement can be stopped by the debtor but the court has the power to re-instate it and allow the credit to continue to enforce.**

 

The Prescribed Terms are these

 

A Amount of credit

A term stating the amount of credit

 

B Repayments

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following-

(a) Number of repayments;

(b) Amount of repayments;

© Frequency and timing of repayments;

(d) Dates of repayments;

(e) The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable.

 

C Rate of interest

A term stating the rate of interest to be applied to the credit issued under the agreement

D Credit limit

This may be a term or the manner in which it will be determined or that there is no credit limit.

--------------------------

 

Which of these applies to you depends on the type of agreement you have?

 

For a Running Account (credit card) agreement

 

BC and D Apply

 

For a Restricted Use Debtor Creditor Supplier

• Where the dealer is the supplier and the creditor is the one providing the finance.
  
• The money can only be used for the purpose it is given.
  
• There is no interest on the purchase (the cash price is the same as the total price)
  
• And there is no advance payment
  

A is applicable

 

For a fixed Sum Credit Agreement

A conventional credit agreement with none of the above restrictions

 

A and B apply

 

For a Hire Agreement

 

B is Applicable

 

This paper only covers section 127(3) of the Act agreements can also be unenforceable by contravention of sections 1 and4 this will be the subject of the next paper.

Please note that these Prescribed terms where not changed in any way by the 2004/1482 Ammendments although the form in which they appear on the agreement was. Subsection127(3) was repealed on the 6th of April 2007 so that unenforceability due to 127(3) will only apply to agreements executed before that date.

[PainInTheNeck]

Hi 42Man

Thanks for the reply, i'm still trying to understand what you have written,

In my case CIT purchased the goods from DELL and i'm paying back CIT.

 

So i assume CIT must sign the agreement which in the case of the agreement posted they have not.

 

Also they only need to show me the amount i must pay each month.

 

Is this correct:confused:

 

Thanks

GP

[ReasonableRon]

Your agreement is a hire agreement. Although still regulated by the CCA there is no amount of credit to display and no interest rate. The agreement is simply for the hire of goods over a period of time after which they are returned back to the company.

 

As a hire agreement, it looks fine to me.

 

As for their signature - if the copy you have posted is the one you were given at the time you signed it then it will not be signed by them. They should have sent you a further 'signed' copy afterwards once it had been accepted by the hire company.

 

Do you still have the equipment under hire and if so have you tried negotiating with them for its return?

[PainInTheNeck]

Hi ReasonableRon

The agreement i posted was from almost 2 years ago, never took much notice of it not having a signature until now.

Regards

GP

[1miller]

Hi Just wondered what happens if an agreement was made at a distance signed at home.

I took out a loan with Northern Rock and was not given the right to cancel as I signed the agreement at home. I just wondered if this is unenforceable under the 2004 regulations that cover financial services or if it is enforceable with a court order? Thanks