Militant Consumer's Friend v Egg Loans PPI - WON

[militantconsumer]

I am helping a friend with an Egg Loan account that was defaulted in summer 2005 and is now on a long Debt Management Plan.

 

Our original plan was to go after PPI refunds relating to both the start of the loan and the two occasions when it was topped up.

 

However, I have recently been following this excellent thread about multiple agreements:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html

 

Now I am starting to wonder whether the current active agreement may be unenforceable. This is because the monthly payments are only stated in total, whereas there is clearly some restricted credit (both for PPI and in order to pay off the previous loan), which perhaps should have been set out in its separate parts due to different categories of agreement.

 

Therefore I am wondering if we could have a jackpot outcome to this case:

1. Current agreement is unenforceable

2. PPI refunds are due on previous two agreements

So an outstanding debt of approx £5,000 turns into a reclaim position against Egg.

 

I will upload a copy of the agreement shortly.

 

I look forward to people's comments.

[militantconsumer]

[militantconsumer]

[joneseyblod]

subbing

[N.P]

Hi MC,

 

Is this account still currently being paid off?

 

Who is the Debt Management Plan with?

 

Does your friend have a CCJ against this account?

 

I`m by no means an expert, but if your friend is paying a Debt Collection Agency or maybe Egg, you possibly could challenge it it doesn`t contain the required Terms for the PPI.

 

They are adding a total of £2011.12 interest, which is also being added to the PPI.

 

As you can see, if this is the agreement, there is no option to select PPI or not, it would be his/her word against Eggs as to wether he/she required the PPI, and even if he/she did choose to have PPI, there still isn`t any Terms for it.

 

I beleive this to be a Section 19 document, with a Restricted and Non-Restricted Credit.

 

I`m not sure how to challenge this, it depends what you want? Are you challenging the enforceability of the agreement or wish to just claim back PPI? If this account is with a Debt Collection Agency, you could challenge the enforceability as they probably won`t be as tough a cookie to crack as Egg.

 

Anyone else have anything to add on this?

 

 

 

N.P

[militantconsumer]

Yes, it is still being paid off. A DMP was negotiated by Gregory Pennington (aka Think Banking). Even though no interest is being charged, at the current monthly payment it will take more than 10 years to pay off.

 

We recently (1st December) stopped using GP and now pay Egg directly by standing order. We decided that GP's monthly fees were excessive and did not really help the situation. Egg have just found out about this and want to review the DMP. In their letter they threaten to pass the account to a Debt Collection Agency, but this has not happened yet.

 

There is no CCJ but the account was defaulted in summer 2005.

 

We will consider all the options re unenforceability and reclaiming PPI and then work out the best way forward. We are waiting for further information from Egg as this loan was "topped up" at least twice - therefore there is far more PPI to look at than this agreement suggests.

[N.P]

Hi MC,

 

I think the general feeling about Debt Management Plan Companies are generally a waste of time and a complete ripp-off, as you have found out yourself.

 

Decide which way to go and let us know, there will be someone who can help with whatever you decide.

 

If it does get past to a Debt Collection Agency (Horror Of Horror`s ) then at least you can CCA them and then defend on the the CCA being invalid due to the missing Terms for the PPI.

 

Whatever you decide DON`t sign anything else as you are probably replacing dodgy agreements with good agreements.

 

Out of interest, how much were you paying your Debt Management Plan and just how much was actually going off the Loan?

 

 

 

N.P

[militantconsumer]

I believe the GP + RBS account option incurs fees of £37.50 per month in total for a DMP with 5 separate creditors involved. But that is an aside for discussion in another place. Back to our loan.

 

If the agreement is unenforceable then we will probably decide not to pay any more to Egg and, separately, claim for PPI mis-sold and already paid out on the earlier agreements.

 

If it IS enforceable then we will have to see if there are mis-selling grounds for each PPI policy at each stage and try and claim that as a reduction to the remaining outstanding loan balance.

 

Therefore, we wait to see if anyone else can comment on the enforceability of the above agreement, particularly with reference to the multiple agreements thread mentioned in my introductory post.

[N.P]

I think the problem you`ll have is HOW you find out, if it is unenforceable. Only a judge will decide that. I`m just saying it appear`s to be a Section 18 Document, and should have separate Terms and Signatures for the Main Loan and PPI.

 

If it IS unenforceable, I`m not sure if you could claim the PPI back. I don`t think you can do both. Someone else will comment on this.

 

 

Could you possibly post up the earlier agreements? If they have no Terms and no signature and no option to choose, then you may have a better claim, as they could have simply added it for profit.

 

This could be a long, hard scrap though.

 

 

 

N.P

[militantconsumer]

For now I will focus on whether the current agreement is enforceable.

 

I will post the other agreements later if they become relevant, e.g. if I decide to challenge the PPI on the earlier agreements. For the record, they are rather similar to this one.

[Mistermind]

For now I will focus on whether the current agreement is enforceable.

 

I will post the other agreements later if they become relevant, e.g. if I decide to challenge the PPI on the earlier agreements. For the record, they are rather similar to this one.

 

Would that be attempting to prove a negative? If Egg sues your client for a CCJ they would need to produce a properly executed agreement to warrant court enforcement of the proven debt. Easy if Egg choose a pitched battle in court.

 

Lets say Egg do not try to enforce. You manage to get them in court, and you prove the document in your hand was not a properly executed document, will the judge rule that because an enforceable agreement was not presented on the day therefore an enforceable agreement could never be presented by Egg in future? Will the judge order permanent closure? There is a CCA forum which may contain precedents.

[militantconsumer]

Thanks Mistermind. I was previously asking in the multiple agreements forum how these arguments could be proved in practice and whether we had to sit back and wait to be sued, or if we could be more proactive.

 

How do we get Egg into court when they are the ones demanding repayment of the loan? Or should we be suing Egg for a PPI refund - but in this case, why would the judge rule that the CCA was unenforceable? Wouldn't that be irrelevant?

 

Ok, I will look for the CCA forum and see if I can glean anything from there that is relevant to our case.

[militantconsumer]

Spent some time looking and can't find anything decisive in any other threads about CCAs.

 

Found some comments on one thread that say that the signature and the prescribed terms must be on the same page, or the back of the same page. I think they were in this case. On my page 1 there is a staple hole in the top left corner. On my page 2 there is a staple hole in the top right corner. (The latter is no longer visible on the scanned copy). This would suggest that everything was on one piece of paper (front and back).

 

So we are back to the new arguments in the multiple agreements thread:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html

 

Is my Egg agreement enforceable or not???

[N.P]

Well, like I`ve mentioned, this would be better suited for a defence than a claim.

 

If the judge decided the CCA was unenforceable, based on your arguements and the facts that this multiple agreement does not comply with the legislation under which it is regulated, then you will have a Mexican standoff.

 

They want their money, you won`t pay, and the Judge won`t do anything. You might as well then go for a right off of the debt.

 

The question is, HOW, do you find out wether it is or isn`t unenforceable?

 

You could either take Egg to court and ask the Judge wether it is or isn`t or you could stop paying, and then defend whatever comes your way, in which case, it would probably end up in court.

 

A tough decision eh?

[N.P]

Also bear in mind, they could quite easily staple together ANY two sheets of paper and claim you signed to them, which they shouldn`t be doing.

 

Everything needs to be on the one sheet, not two, or three, or whatever.

[N.P]

How do we get Egg into court when they are the ones demanding repayment of the loan? Or should we be suing Egg for a PPI refund - but in this case, why would the judge rule that the CCA was unenforceable? Wouldn't that be irrelevant?

 

Why would the judge rule the CCA is unenforceable?

 

Well, lets say you stop paying for whatever reason and they drag your hairy bottom into court. What would your defence be?

 

Well,

 

 

CCA 1974 Section 127 - (3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

 

 

CCA 1974 Section 65 (1) -An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

 

 

 

CCA - 1974 Section 11 - Restricted-use credit and unrestricted-use credit.

— (1) A restricted-use credit agreement is a regulated consumer credit agreement—

(a)

to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or

 

(b)

to finance a transaction between the debtor and a person (the “supplier ”) other than the creditor, or

 

©

to refinance any existing indebtedness of the debtor’s, whether to the creditor or another person,

 

 

and “restricted-use credit ” shall be construed accordingly.

 

(2) An unrestricted-use credit agreement is a regulated consumer credit agreement not falling within subsection (1), and “unrestricted-use credit ” shall be construed accordingly.

 

(3) An agreement does not fall within subsection (1) if the credit is in fact provided in such a way as to leave the debtor free to use it as he chooses, even though certain uses would contravene that or any other agreement.

 

(4) An agreement may fall within subsection (1)(b) although the identity of the supplier is unknown at the time the agreement is made.

 

 

 

CCA 1974 - Section 18 - Multiple agreements.

— (1) This section applies to an agreement (a “multiple agreement ”) if its terms are such as—

(a)

to place a part of it within one category of agreement mentioned in this Act, and another part of it within a different category of agreement so mentioned, or within a category of agreement not so mentioned, or

 

(b)

to place it, or a part of it, within two or more categories of agreement so mentioned.

 

 

(2) Where a part of an agreement falls within subsection (1), that part shall be treated for the purposes of this Act as a separate agreement.

 

(3) Where an agreement falls within subsection (1)(b), it shall be treated as an agreement in each of the categories in question, and this Act shall apply to it accordingly.

 

(4) Where under subsection (2) a part of a multiple agreement is to be treated as a separate agreement, the multiple agreement shall (with any necessary modifications) be construed accordingly; and any sum payable under the multiple agreement, if not apportioned by the parties, shall for the purposes of proceedings in any court relating to the multiple agreement be apportioned by the court as may be requisite.

 

(5) In the case of an agreement for running-account credit, a term of the agreement allowing the credit limit to be exceeded merely temporarily shall not be treated as a separate agreement or as providing fixed-sum credit in respect of the excess.

 

(6) This Act does not apply to a multiple agreement so far as the agreement relates to goods if under the agreement payments are to be made in respect of the goods in the form of rent (other than a rentcharge) issuing out of land.

 

 

 

So, basically your defence would that the CCA does not contain the relevent Terms which would render it unenforceable under Section 127 (3).

 

IE - Sec 11 tells us you have multiple agreements here.

 

Sec 18 tells us that each agreement needs to be seperated with it own Terms and therefore signed by you, the nice person who is being sued over a duff agreement he was tricked into, so their Loan wouldn`t be regulated, giving them open season for harrassement.

 

This clearly is NOT the case, so this takes us to Sec 65, the very reason why you are in court, and your defence would be Sec 127.

 

As this does not comply with legislation, IE the very act it is regulated by, the Judge is not allowed and should not enforce the agreement, unless he completely doesn`t have a clue of course. Then you appeal.

 

You then have a Mexican stand off, they want you to pay, you won`t pay, and the Judge doesn`t give a toss. So you might as well go for a right off, and then compo for all the harrassment they`ve given you over this dodgy agreement.

 

I think I got that right.

 

Anyway, hope this helps

[Mistermind]

 

How do we get Egg into court when they are the ones demanding repayment of the loan? Or should we be suing Egg for a PPI refund - but in this case, why would the judge rule that the CCA was unenforceable? Wouldn't that be irrelevant?

 

 

Not one credit card wants to fight in court the reclaim of unlawful penalty charges. They may threaten to, and deter the irresolute, but at the last minute they will cave in, as there is consensus they will lose and they do not want a precedent set. The situation is clearcut, but is less clearcut on PPI reclaims.

 

My gut feeling about issues discussed in CAG is that if the answer is clearcut it would have been shared out long ago. If after extensive searching no definitive answer and precedent can be found, then it is a grey area. You appear to be seeking 2 answers:

 

(1) Is your CCA enforeceable or not? Suggest click SEARCH on the top blue bar, click ADVANCED SEARCH, input keyword ENFORCEABLE, set search to THREAD TITLE ONLY. That would provide more reading, not only on what ought to happen, but also what actually happens, including the following:

 

I have spoken to OFT who say that it is a matter for trading standards.

 

Spoken to trading standardards who say it is a matter for FOS.

 

Spoken to FOS who say it is a matter for The FSA

 

Spoken to the FSA who say it is a matter for the OFT

 

AAAAAAAAAAAAAAAAAAAAAAAAAAARRRRRRRRRRRRRRRRRRRRRRRRRRRGGGGGGGGGGGGGGGG

 

 

(2) You are ideally seeking closure in court after a pitched battle in your favour. As posted elsewhere, I believe a judge is empowered to rule a debt is enforeceable in spite of CCA irregularities, but he has no obligation to perform the mirror-image and rule once and for all time that the debt is unenforceable for all time. After 6 years of non-enforcement the debt is non-claimable any way. In the real world I believe courts will oblige with setasides and retrials if new documents are submitted by Egg in future. My impression is that if Egg reckons it will lose then it will decline a pitched battle in court, and the situation would quieten down into a mexican standoff with no further harassment for payment, but with the sword of damocles dangling over your client's head -- Egg may try again in future if they fancy their chances. If your reading uncovers clear precedents, do let the forum know as so many are groping their way forward.

 

Good luck.

[militantconsumer]

Thanks very much Mistermind. I get the impression that the multiple agreements argument that is being debated in the other thread is not so clear cut as some people think. And not worth risking a CCJ for if there is no other way to prove it in advance of being taken to court by Egg.

 

But PPI is another matter. Unless anybody comes along and gives me a good reason why the scanned agreement is unenforceable, I think I will now focus on trying to reclaim the PPI added at each of the three stages of this twice topped up loan.

 

I don't think we have any mis-selling grounds based on employment status at any of the three points in time. However, as far as we can remember, they were all telephone sales, and therefore it is entirely possible that Egg mis-represented the contract when arranging the loans. (for example, by insisting that PPI was compulsory).

 

Considering that their Credit Card division has just been fined for the manner in which it sold PPI over the phone, it seems likely that they were up to similar tricks over in their Loans section.

 

I will spend my Christmas holidays trying to fathom my way through the 1.5 inch thick Egg SAR data that has just arrived in the post. Hopefully I will be able to work out what has happened with PPI on this account since it started in May 2003.

[pinknico]

Did Egg send you any tapes to listen to containing the phone calls?

[militantconsumer]

No they didn't end any tapes. Did you manage to get any tapes or transcripts?

 

I'm going to spend some time looking through the pack to see if there is anything specifically relating to PPI other than the three signed credit agreements. I will also cross reference to Abbey bank statements to see how much of the loans ended up in our account. The loan was topped up twice so it is quite complicated.

 

One question I will be wanting an answer to is exactly what happened to the PPI policies at each stage. Were the old policies automatically moved to the new loan or were new policies taken out, did we get a partial refund each time, what happened to the insurance policy once a default notice was issued.....?

 

Oh yes, and we also need to work out if any penalty charges have found their way into the outstandin loan balance. I'm assuming these are as unlawful as other penalty charges.

[pinknico]

I didnt get any tapes but on OH letter it said tapes to follow seperately, still waiting for them.

[militantconsumer]

What, on the first page of the pack? In the letter headed "Your Data Subject Information Request (DSIR)" ???

 

I can find no mention of tapes?!

[pinknico]

Yes first page, it says find enclosed blah, blah blah.

Then: The tapes will follow seperately, I would chase them up on this as if there were phone calls there should be a transcript or something.

[militantconsumer]

Thank you so much pinknico. There is no mention of any tapes or transcripts in the letter. I will check the pack through carefully..... but perhaps they didn't keep a copy

[militantconsumer]

This is what pt2537 has posted in pinknico's thread about my agreement:-

 

ITs easier to run a claim on a multiple agreement as there can be no dispute of fact as the agreement speaks for itself.

 

a claim for misselling can be much harder to run.

 

having just looked at your agreement, its clearly a multi agreement and i would suggest can be rendered unenforceable as a result, its your call ultimately though

 

That's very helpful, but what I still don't know is how we to proceed on this. We really don't want to sit back and wait for it to be sold to a DCA, suffer months of telephone harrassment, and finally get sued with risk of a CCJ if the judge doesn't agree with our interpretation of the legislation. Does anybody reading this know how we could take the fight to Egg and get a judge or even the FOS to rule that this agreement is unenforceable?