why you shouldnt use section 77/78 CCA 1974 if you want the signed agreement

[vint1954]

I've seen that letter, in fact I have a copy of the complete letter. It is from a solicitor working for Trading Standards. Whilst it may be an opinion it is not law.

 

As far as a true copy is concerned, it is a fact a creditor could hand write every word of the original agreement on the back of a cigarette packet and so long as it was legible and exactly word for word the same as the original agreement it would be in law a true copy.

 

Fortunately a court would only accept the original signed copy.

Not from a solicitor at all. It was a letter that I cobbled together, mainly from various bits of info widely available, plus other thoughts. The OFT references come from a reply to an MP, who had asked the question of the Chancellor of the Exchequor. Full letter below.

 

xxxxxx 2009.

Dear xxxxxxxxx,

ACCOUNT IN DISPUTE

Re account no xxxxxxxxxxxxxxxxxxxxxxxxxxx

I write regarding recent communication regarding the above account. I acknowledge no debt to your organisation.

Further to my request under s78 of the Consumer Credit Act 1974, your attention is drawn to the fact that this account remains subject to a lawful serious dispute. On xxxxxxxx, by recorded delivery, I requested that you supply me a copy of the executed credit agreement covering this account pursuant to the Consumer Credit Act 1974 section 78, a copy of this request is enclosed. To date you have failed to comply with my request, supplying only an illegible copy of an application form tear off strip, devoid of all prescribed terms, and a copy of your generic terms & conditions, which cannot be linked to any agreement which you claim that I have signed. Without production of the said agreement I am unable to assess if I am indeed liable for any alleged debt to you, nor does it give me any chance to evaluate whether any original agreement was ‘properly executed’ as required by the Consumer Credit Act 1974.

Contrary to your assertion, xxxxxxxx have not complied with the terms of CCA 1974 s78. The documents that you have supplied, do not comply with your duties to supply a “True Copy” of any agreement you claim to have been signed by me, for pre 2007 agreements. As you will be further aware, an agreement is not executed, until signed by both parties, so the document that you have supplied, being a reconstruction, cannot be a True Copy of an Executed Agreement.

While this account remains in serious dispute, the relevant main points of the Law and OFT regulations while the account is in this state and xxxxxx remain in default are:

• You may not ask for payment against this account.
  
• I am not obliged to offer any payment against this account.
  
• You cannot register any data with a third party.
  
• You cannot take any enforcement action, including registering Defaults.
  
• You cannot pass the account on to a third party for collection.
  
• You cannot sell the account.
  

Let me explain here, what a true copy is:

In a recent letter from the enforcement department of the OFT, the text below was quoted, explaining what is required.

“The copy of the executed agreement need not be an exact copy but it must be a ‘true copy’ and not some reconstruction of what the original might have been and it must contain the same terms as the original. Where the terms have been varied as provided for within the agreement, the copy of the original agreement must be accompanied by a document setting out the current terms, as varied. Certain details may be omitted from the original agreement eg the signature but the debtor must be in no doubt as to the true nature of his obligations under the loan.

 

Should no original agreement be in existence it is very hard to say that the copy the creditor offers to the debtor is, in fact, a true copy as there would be no original with which to compare it. In our view the onus of proof would be on the creditor to show that the copy is a true one and where none existed he may have difficulty discharging this. Neither should creditors suggest that a consumer has signed a credit agreement where they are unable to provide evidence to support this — to do so is likely to be a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) and would also constitute an unfair or improper business practice.”

 

I also refer you to the information below.

1. A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

 

 

2. Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

 

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

 

2. The need for prescribed terms to be contained in the credit agreement is confirmed by the Author of the CCA1974 act, I quote ““As the draftsman of the Consumer Credit Act 1974 I would like to thank Dr Richard Lawson for his interesting and well-argued article (30 August 2003) on Wilson v First County Trust Ltd [2003] UKHL 40, [2003] 4 All ER 97.

 

Dr Lawson may be interested to know that I included the provision in question (section 127(3)) entirely on my own initiative. It seemed right to me that if the creditor company couldn’t be bothered to ensure that all the prescribed particulars were accurately included in the credit agreement it deserved to find it unenforceable, and that the court should not have power to relieve it from this penalty. Nobody queried this, and it went through Parliament without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed.” - 167 Justice of the Peace (2003) 773.”

I am now granting to you a further 7 days to produce a copy of an executable agreement. After that I will consider that the above matter is closed and that you will no longer pursue the alleged debt. If you are insisting that the non enforceable document, that you have supplied, is the only alleged agreement in your possession, then I would suggest that the best course of action would be to immediately set the balance of the above account number to zero.

I look forward to your response.

[vint1954]

Could you please send me the template for this, will this still be valid even if the loan is only just over 1 year?

 

Mashmallow

The templates are all on the forum, however this is the standard request.

 

Dear Sir/Madam

 

Re account no xxxxxxxxxxxx

 

With reference to the alleged debt to your company, this letter is a formal request of true copy of a signed and dated credit agreement for the above account number, under the terms and conditions of section 78(1) of the CCA act 1974. I enclose the statutory maximum fee of £1.00

 

I expect you to comply fully and properly with this request, within the statutory time limit.

I enclose a postal order no xxxxxxxxxxxxx in the sum of £1.00, which is the statutory fee. Note that these funds are not to be used for any other purpose.

 

If you are unable to comply fully and properly with this request, you should confirm this in writing at the earliest opportunity, and certainly within the statutory time limit for compliance, and return the fee.

 

I look forward to hearing from you.

 

Yours faithfully

 

[vint1954]

yes was secured on property as second charge mortgage ,... £31k ,... £3700(restricted credit) sent as cheque to pay off credit card , £1400 arrears on first mortgage , and £25,900 advanced into my account (unrestricted),.. so should of been part regulated ,& part unregulated

Mortgages do not come under the CCA 1974. Securred loans do and the limit of £25k was removed in April 2006.

 

6 April 2008: the Office of Fair Trading’s (OFT’s) new strengthened licensing regime was introduced, the Consumer Credit Appeals Tribunal (for appeals against the OFT’s licensing decisions) was established, the financial limit (of £25,000) was removed so all new credit agreements (unless specifically exempt) are regulated, and the Unfair Relationships Test was extended to all existing credit agreements.

Edited January 16, 2010 by vint1954
Additionaal info

[vint1954]

Any ideas what regulates a secured loan over 25k taken out in may 2006? The commencement orders seem to indicate gradual implementation over 2007/2008 for the CCA 2006.

 

6 April 2008: the Office of Fair Trading’s (OFT’s) new strengthened licensing regime was introduced, the Consumer Credit Appeals Tribunal (for appeals against the OFT’s licensing decisions) was established, the financial limit (of £25,000) was removed so all new credit agreements (unless specifically exempt) are regulated, and the Unfair Relationships Test was extended to all existing credit agreements.

[vint1954]

Can anyone help? I recollect seeing a letter in a thread from someone in OFT which stated along the lines that statements showing all charges etc. applied should be sent as part of the response to this 77/78 CCA request.

 

This would suggest you can get what you need to chase up unfair charges for £1 and not have to pay £10 for SAR. Anyone recollect this post? If so what post no and what thread?

No, it is a statement of account at the time of CCA request, no over the history of the account.

[vint1954]

hello, in relation to #1 of this thread, i'm a little confused. is it suggesting that a normal cca request with the £1 fee, allows a creditor to botch together a signature from one document, terms from another, interest from another etc. allowing them to form what an agreement might have looked like if they had not found or were not happy with the original document?

 

i have received a copy of a tesco agreement which is 'supposed' to be conforming to cca 1974. however, i've read somewhere that microfich copies might not be valid. if this is so, how would i know if the copy i have is from a microfich file? can anyone help with this? thanks BAB

Different criteria for OC responding to s78 requests, rather than documents in court.

 

For s78, they can reconstruct the agreement, must be a true copy, but they will have to prove it one day.

[vint1954]

You could also try stateing that you should be sent a copy of the original agreement, not reconstructed, when the account is varied, change of APR etc.

 

HHJ Waksman saw it that way also.

[vint1954]

I think the question was, have you seen the agreement. If not you are unable to assertain execution.

[vint1954]

I personnaly think that it is something a court will allow to be rectified by the creditor.

 

I see what you are getting at though, if they terminate, they cannot retrospectvely execute an agreement that no longer exists.

[vint1954]

Only by going to court, which could be risky and costly

[vint1954]

It can be risky if you loose. There will be mega costs involved if the other side defends.

 

They register defaults because there has been a default. Whether that is just or not, is a whole topic by itself. If there was no Default and they registered one, then there would be a perfect case to get it removed without risk.

 

An agreement being unenforcable, does not mean that there was not a relationship and that a debt did not exist, it just means that the OC cannot use the court system to force you to pay, unless money was not borrowed, then that again is another matter.

 

The creditor can register the default and can update that default until it drops off of your credit file after 6 years. They cannot register multi defaults for the same debt.

[vint1954]

Hi frettful.

 

Yes, you would think so. There is no prescribed layout for the agreement, laid out in the act.

 

So you would then go to what can reasonably be expected, thinking about contracts in general. In every other contract that I have come accross, including Mortgages, construction contracts, small works contracts and JCT's, the signatures and dates are all in one place. ( the same place). Some contracts that I have dealt with are about a foot high, in several volumes. But all have the same format in common. That is What you are going to do or supply for the value of the contract and what the other party is going to do or supply, in order to facilitate the contract. ( the terms of contract) After all that, there is your signature and date then that of the other party. Anything after the signature is not worthy of being in the contract.

 

So I would always argue that the signatures need to be together, or you are not signing up to the same points, and that the signatures come after the main points of the agreement ( prescribed terms ). Anything after a signature should be incidental, or outside of the need to be in the contract/agreement. I think that you could argue that point.

 

The problem is that the CCA 1974, does not prescribe the layout for the agreement. It maybe argued that the agreement could total 6, 8, 10 or 12 pages, but in that case, the signature needs to be at the end.

 

s 61 deals with signatures:

 

61.—(1) A regulated agreement is not properly executed unless

(a) a document in the prescribed form itself containing all the prescribed terms

and conforming to regulations under section 60(1) is signed in the prescribed

manner both by the debtor or hirer and by or on behalf of the creditor or owner,

and

(b) the document embodies all the terms of the agreement, other than implied terms,

and

© the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.

[vint1954]

If you sign a contract to build a factory for example, the contract would include the price you are going to pay for that factory, its size, its location on the plot, the materials that you want it built of etc.. etc.. Even down to who is going to supply the site toilets in construction phase or the electricity supply. These all have effects on the contract and its cost and implementation. You dont want to get to site day one and start arguing over who is supplying toilets, as it is not set out in the bill of quants.

 

Both parties then sign up to the agreement, after these points, not on the first page.

[vint1954]

Whilst not entirely clear, IMO the 1983 regulations do not set out the order of the agreement but it does state what information must be together, maybe with the argument that the amendment regs were to clear up the point that certain information is required to be before the signature of the debtor. Just your point earlier Vint, that normally prescribed terms before signature.

R

[/left]

I agree, but no body could reasonably expect you to sign up to an agreement, where the terms are not there.

 

If you take the average CCA, this is just an application form where you fill in name, address, earnings, and other up front information. There is usually an advert for a competion to enter on the reverse. This is all very acceptable at this point. ( The invitation)

 

You accept the invitation and apply for the card, with no certainty at this point that you will get one. ( Invitation, not contract, Accepted )

 

The potential creditor then checks you out and replies, great news Mr RWRM, you can have a Credit Card, or a loan, please sign this agreement and return it to us and we will send you a card or the cash, to do with as you will. Look forward to doing business with you. ( The offer )

 

You get the offer and say, woopee mrs RWRM, down you go and book us a cruise. You sign the agreement and return it to the Creditor. ( The acceptance of offer )

 

The Creditor gets your acceptance and says, great, more business, print this man a card or send him a check. He signs the agreement, sends you a copy with yours and his signature on it and any other Terms not in the agreement. At this point you have the opportunity to read all of the terms and conditions and say, yes thats fine, or no I cannot accept these terms.

 

All being well ( contract between the 2 parties concluded )

 

The CCA 1974 and its amendments, sees it this way. They talk about pre and post agreement documents and the fact that an unregulated doucument is void if it seeks to bing the debtor to a future agreement. s59.

 

59.—(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

The act is set up to protect the consumer.

The only people that see it different to the above, are the creditors who send out stupid little application forms to sign ( the invitation ), then dole out credit cards or cash without completeing the agreement.

[vint1954]

Think I see your point exactly Vint. Does this form part of contract law? Is there any merit in my other other arguments?

R

i think we can sometimes get bogged down and focussed on the CCA 1974. That is the act that governs agreements, but if a situation is not covered there, then we must look elsewhere for what is reasonable or common practice, even law in another area, so yes, any argument is worthy of discussion.

[vint1954]

The point I am tring to make is that, as an alternative to s.77/78, putting the creditor on notice that thay have not complied with s63 and asking them to comply with this requirement. As the purpose of s63 is to provide a copy of the executed agreement and taking account that the only difference between an unexecuted and executed agreement is the signatures of the parties, unless they produce a document bearing the signatures of the parties, they have not complied with s63.

 

IMO the difference between 77/78 and 63 is that the former is for information purposes and the later to provide the debtor with proof positive that the agreement has been executed and signed by the parties.

 

I accept that there is nothing in the CCA that states the creditor is commiting an offence by not complying with s63, unlike as 77/78 used to be. However, if they ignore and at some time in the future they issue proceedings, you have evidence that you have put them on notice that you made them aware of their breach of s63 and then point court to s127(4). It is then possible to argue that a reconned agreement is not appropriate in this case as the purpose of s63 is proof to the debtor that the creditor has signed the agreement and therefore has actually become an executed agreement.

 

Any comments greatly appreciated

R

Yes, they do need to send you a copy of the agreement when you and they have signed, but the don't.

 

How you go about proving that is another matter and it wont make the agreement unenforcable.

[vint1954]

As is in my case. App form, split into 3 sections App Form, Credit Agreement, Balance Transfer Request. Headed correctly, Correct signature boxes, Correct cancellation box. Specifically states credit limit, interest rate, other charges to be assessed, therefore by the very nature of the wording of the credit agreement, on one point alone, no interest rate (prescribed term) included in agreement, iredeemably unenforceable in my book.

 

See the logic with contracts in general, makes sense.

R

Was this a reconstruction? Was it HSBC

[vint1954]

Yes agreed, proving they haven't complied is another matter. However, pointing out to them that they have not complied before any preceedings have commenced, if ignorred or not denied, would be a useful weapon to use at a later stage. Should the issuing of the executed agreement show up in the OC's records obtainable with a SAR.

R

Still, if they did comply, they would be able to send you an agreement would'nt they.

[vint1954]

Received strange response from my cca request from rbs today

 

"We return your letter, as attached, which we are unable to action.

 

Unfortunately we do not hold your signature on record, please can you take your passport or driving licence into your branch for them to forward to us at Credit Management Services.

 

Thank you for your assistance in this matter. We look forward to hearing from you shortly"

 

 

Personally I think I'd be mad to provide them with my signature. Does anyone else have any cooments?

If they have been communicating with you at that address with sensitive letters and statements, then they have no reason to suspect your identity now.

 

Write back and tell them so and ask if they have been sending out statements and letters when they are not certain that you live at that address. ICO would be pleased to hear that.

 

Give them a further 7 days to comply in your letter, then go to to the OFT.

 

This is unreasonable.

 

On the up side, if they do not have a copy of your signature, then they cannot have an agreement.

[vint1954]

DD - thanks for your response, with all respect, I have read so much I have information overload. Am I to understand that the CPR is to be requested when a creditor is taking me to court? OR when I am trying to claim against whatever credit establishment for illegal charges?

 

Sorry for my non understanding, hence my post above requesting whether proceedings need to have started. I merely want a copy of the true signed agreement to see whether I should even contemplate taking any action.

CPR 31.14, 31.15 and 18 are used once court action has been instigated.

 

CPR 31.16 can be used pre court action, if you have been threatened with court action, to request a copy of your agreement or any other relevant document. However, beware of taking your creditor to court to get a copy of the agreement under s78.

 

Have a good read here.

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/240186-dissecting-manchester-test-case-110.html#post2874984

[vint1954]

Hi both,

 

Might be a stupid question but is it right that a DCA, bank, CC etc have to provide a true copy under a CCA or SAR? IT seems crazy that when these requests are made, they can provide copies without info that can make the debt unenforceable!

I've recently had a copy of a loan agreement sent under a CCA request which is missing my signature, not quite sure which way to handle it now.

The copy of the executed agreement need not be an exact copy but it must be a ‘true copy’ and not some reconstruction of what the original might have been and it must contain the same terms as the original. Where the terms have been varied as provided for within the agreement, the copy of the original agreement must be accompanied by a document setting out the current terms, as varied. Certain details may be omitted from the original agreement eg the signature but the debtor must be in no doubt as to the true nature of his obligations under the loan.

 

Should no original agreement be in existence it is very hard to say that the copy the creditor offers to the debtor is, in fact, a true copy as there would be no original with which to compare it. In our view the onus of proof would be on the creditor to show that the copy is a true one and where none existed he may have difficulty discharging this. Neither should creditors suggest that a consumer has signed a credit agreement where they are unable to provide evidence to support this — to do so is likely to be a misleading action under Regulation 5 of the Consumer Protection From Unfair Trading Regulations 2008 (the CPRs) and would also constitute an unfair or improper business practice.

[vint1954]

Exactly, you have to be prepared to follow through.

[vint1954]

It all depends upon what you wish to achieve and how you see a solicitor achieving it?

 

We all want to avoid unnecessarily paying debts, but those debts NEVER go away. In your case it simply is unlikely your creditor could enforce (i.e. persuade a court to make you pay) the debt.

 

Even a solicitor is very unlikely to achieve much more than that.

 

Most CAGgers probably have agreements that are unenforceable for one reason or another, but you will find very few who actually sue a creditor, simply because there is very little more to be achieved other than not paying.

 

It is simply a matter that once you stop paying you start the ping pong of letters with creditors and collection agencies.

 

Does that make sense??

Post Carey, you would almost certainly fail in any court action and you would need deep pockets.

 

s78 is there to provide information and not a copy of the agreement. They only need that in court.

[vint1954]

of course my knowledge is gleaned from historic and other avenues of research- - and yours is not?

Every ones knowledge is. Can't say thats a bad thing, so long as the wheat is sorted from the chaff.

 

Peter,

 

We all see our letters and thoughts trotted out accross the forum as though they had just been invented, and indeed those thoughts and letters are in turm plagerised from others previous experience. I know I have pinched some of DD's work and ideas. Thats what this forum was about, shared knowledge, debate and help for those in a desparate situation. From fresh, you can only learn from others knowledge and experience.

 

Vint