Militant Consumer challenges Egg Card Repayment Protection purchased online

[militantconsumer]

How does this sound? (to be sent by special delivery)

 

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

 

Dear Sir

 

Account number XXXX - IN DISPUTE

 

I write with reference to the above account, which I now consider to be in dispute for the following two reasons.

 

1. Credit Agreement

 

You provided me with a copy of a “Credit Agreement regulated by the Consumer Credit Act 1974” for the above account as part of my Subject Access Request, which you responded to on XXXXX.

 

This agreement is improperly executed under section 61(1) of the Consumer Credit Act 1974 and the associated regulations. According to the Consumer Credit (Agreements) Regulations 1983 (Schedule 1), this agreement should have been given the heading “Credit Card Agreement”. In fact it has been incorrectly headed “Credit Agreement”.

 

Additionally, no “Credit Limit” has been stated – this is a prescribed term set out in the Consumer Credit (Agreements) Regulations 1983, as required by section 61(1) of the Consumer Credit Act 1974.

 

As the agreement has been improperly executed, it is only enforceable by an order of the court, by virtue of section 65. However, since it does not explicitly state the term “credit limit” (rather, it mentions only an "Approved Limit”), as required by Schedule 6 of the Consumer Credit (Agreements) Regulations 1983, the court would be prevented from granting such an order by virtue of section 127(3).

 

2. Payment Protection Insurance

 

You are already aware of my claim for a refund of payment protection insurance premiums plus interest, from my previous correspondence dated XXXX. I believe the total value of this claim to be in excess of my current alleged indebtedness to you.

 

As I result I consider the entire account to be in dispute for this reason as well. Note that I will be formalising this complaint with the Financial Ombudsman Service shortly.

 

Future conduct

 

I trust you will now be in a position to reduce the balance on this account to £0 and to remove any default that has been registered by yourselves with any credit reference agency, as required by the Data Protection Act 1984.

 

Furthermore, please be aware that from this point onwards I will respond only to written contact. You are now under notice that I will not discuss personal or confidential matters over the phone under any circumstances whatsoever.

 

I trust you are aware of the limitations placed upon you now that the account has been formally disputed. I particularly draw your attention to the legal requirement that a creditor is not permitted to take any action against an account whilst it remains in dispute.

 

The lack of a valid and enforceable credit agreement and the payment protection insurance complaint are both very clear disputes and therefore the following applies:

• You must not demand any payment on this account, nor am I obliged to offer any payment to you.

• You must not add any further interest or charges to this account.

• You must not pass this account to any third party.

• You must not issue a default notice on this account.

• You must not register any information in respect of this account with any of the credit reference agencies. To register information with the credit reference agencies, or to issue a default notice, would also be in breach of Section 13.6 of The Banking Code, which stipulates that you can only register such information if the amount owed is not in dispute. I note that you are a subscriber to this Code.

 

Any further actions taken by Egg to collect the alleged debt whilst it is under dispute will be vigorously defended. I am also aware of the law regarding harassment of creditors under these circumstances and will use UK law to defend myself.

 

I look forward to receiving a satisfactory response.

 

Yours faithfully

 

XXX

Edited February 2, 2009 by militantconsumer
Long post!

[lollipop73]

Well it sounds pretty good to me, let`s hope we all get our day in court, the days of grinding consumers down are over-if they are indeed reading these forums I hope they get a good look at some of these current threads..

[the_nam]

Very good letter!

I have the same problem with my CCA so following with interest!

[bathgatebuyer]

Exactly the same reply I got to the fact it showed I earnt £10340 a month(i wish) and it showed I had 3 credit cards but no outgoings!

 

Funny, mine said I earned £9,700 a month! Something a bit strange if this is happening with all these applications, eh?

[militantconsumer]

More or less word for word, the letter in post #26 is now on its way to Egg by special delivery.

 

They are already threatening legal action because the most recent payment plan has expired and they want to see an increase in monthly payments.

 

It will be interesting to see how they react when they find that they will not be receiving any payments at all from 1st March.

[militantconsumer]

I have just noticed on another thread that there is some case law (Central Trust Plc v. Spurway, 28th May 2004) which found that if the word "credit" is missing from the "credit limit" required in a running credit agreement, then there is a failure to state a prescribed term.

 

More details and explanation on this thread: (pt again!)

http://www.consumeractiongroup.co.uk/forum/legal-issues/169828-egg-card-cca.html

[militantconsumer]

Egg have acknowledged the dispute letter and sent one of their standard responses saying they will investigate the complaint.

 

I wonder if this will mean that they hold off collection procedures in relation to the alleged debt?

[basa48]

I have just noticed on another thread that there is some case law (Central Trust Plc v. Spurway, 28th May 2004) which found that if the word "credit" is missing from the "credit limit" required in a running credit agreement, then there is a failure to state a prescribed term.

 

More details and explanation on this thread: (pt again!)

http://www.consumeractiongroup.co.uk/forum/legal-issues/169828-egg-card-cca.html

 

I saw that post, it followed from mine asking about Lord Nicholls opinion in the Wilson v Secretary of T&I case.

 

I've also found this:

 

Court of Appeal

 

WILSON v THE FIRST COUNTY TRUST LIMITED

 

THE VICE-CHANCELLOR

LORD JUSTICE CHADWICK

and

LORD JUSTICE RIX

 

Para 26

 

In effect, the creditor – by failing to ensure that he obtained a document signed by the debtor which contained all the prescribed terms – must (in the light of the provisions in sections 65(1) and 127(3) of the 1974 Act) be taken to have made a voluntary disposition, or gift, of the loan monies to the debtor. The creditor had chosen to part with the monies in circumstances in which it was never entitled to have them repaid;

 

 

Now I'm off to bed with a smile on my face

[militantconsumer]

Yes, PT says he uses Central Trust plc v Spurway combined with the Wilson case when he challenges Egg over this Approved/Credit limit thing.

 

The only confusing thing is that there are two famous Wilson cases - more background reading required if we ever go to court!

[basa48]

Yes, PT says he uses Central Trust plc v Spurway combined with the Wilson case when he challenges Egg over this Approved/Credit limit thing.

 

The only confusing thing is that there are two famous Wilson cases - more background reading required if we ever go to court!

 

This > House of Lords - Wilson and others v. Secretary of State for Trade and Industry (Appellant) is the one I was referring to.

[militantconsumer]

Egg have replied to our letter of post #26.

 

"Contrary to the assertions in that letter, the documents enclosed in response to your request constituted a copy of the executed agreement. This consisted of a copy of the agreement you originally entered into, together with the current terms of your agreement as required by the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983."

 

"As permitted by these regulations, the copy of the agreement that you entered into is a "true" copy, reproducing the original terms and format of your agreement but omitting signature boxes and signatures. As a matter of law, the documents we enclosed in response to your request constitute a "true copy" of the executed agreement."

 

"We have provided all documentation required by law and do not consider there to be a genuine dispute as to the amount of your debt."

 

Then they go on to talk about credit ratings and their Collections Department.....

 

This response appears to be a standard letter that they send when people claim that Egg have failed to comply with the CCA 1974 by not sending a copy of the signed agreement.

 

In our case we DO have a copy of the signed agreement, so their comments are irrelevant.

 

They have not responded to either of the two elements of our dispute - 1) the approved/credit limit and 2) the mis-sold PPI.

 

I really cannot be bothered to write another letter asking them to read the first one. I think we will just send another copy of the first letter to Collections Direct when they inevitably send us their first threatening letter.

[militantconsumer]

Here is a new thread which PT has started on why he thinks all the old Egg Card agreements are fundamentally flawed:

http://www.consumeractiongroup.co.uk/forum/legal-issues/188093-egg-credit-agreements-what.html

 

The most significant point not already covered in my own thread is the failure to correctly state the rate of interest for cash withdrawls.

 

I feel an even sterner letter to Egg coming along....

 

-----

 

 

Egg credit card agreements are fundamentally flawed in my view, i have seen a number of the older Egg agreements (Pre 2005) and on each one there are a number of defects

 

Firstly, the word Approved Limit is used, my view which is supported by case law is that the word 3.Limit which is set out in the margin and the word Approved limit is not sufficient to advise you what the credit limit is or how it will be decided. therefore a prescribed term is not correctly stated

 

the case i refer to is Central Trust Plc V Spurway [2005] CCLR,where HHJ Overend states

 

24. In my judgment, the passages of Lord Nicholls’ speech cited by Mr Say persuade me that:

 

(a)The amount of credit must mean credit in its technical sense, and

(b)That although the use of the word “credit” is not prescribed, there should not be any confusion in the mind of the lay reader as to what the amount of credit is

 

Following HHJ Overend’s view, the agreement should make clear to the consumer, who is likely to be a lay man, what the credit limit is or how it will be determined. It is not possible to say with any certainty that the documents EGG have provided are clear, unambiguous or that a consumer would understand that the approved limit would be their credit limit.

secondly, the agreements fail to state the rate of interest for cash withdrawals. From what i have seen the agreement only states an APR which is not sufficient for cash purchases as cash purchases includes a 1.25% handling fee which is included in the APR so it cannot be an accurate reflection of the rate of interest. Again a prescribed term is missing

 

Finally Egg will try to tell you that the missing information is set out within their terms and conditions, if they do this, then in stern words tell them IT CANNOT BE. The reasons for this is that Regulation 2 (4) Consumer Credit Agreement Regulations 1983 (SI1983/1553) requires that the statutory information set out within Para 3-19 of schedule 1 and 2 SI1983/1553 should be shown as a whole and not interspersed with other information if the agreement is to be properly executed and compliant with section 61 CCA 1974

 

 

Also it is worth noting that, Paragraph 22 of Schedule 1 Consumer Credit Agreement Regulations requires that the agreement details the default charges payable and Egg Agreements DO NOT

 

 

These are just my observations based upon my own experiences

[Nomore Baloney]

subbed

[Nomore Baloney]

I have an early 2002 agreement similair to one previously posted. I propose to send this letter to them. Any thoughts or advice before I do?

 

 

ARC Europe,

Kent House

Churchfield Rd

Walton on Thames

Surrey,

KT12 2TU

 

Dear Sir,

 

Ref : Egg,

 

ACCOUNT IN DISPUTE

Thank you for sending me what you have confirmed to be a true copy of the credit agreement that exist in relation to this account. As you have sent this document in response to my requests under Section 78 (1) of the Consumer Credit Act 1974, then this statement by you is now binding on you as per section 172 of the Act.

The document that you have supplied does not constitute a legally binding regulated agreement between us and is in breach of Section 61 of the Consumer Credit Act 1974 and is therefore unenforceable by virtue of Section 127 of the act.

 

It does not comply with the act because:

 

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.

 

The agreement you have supplied does not have a section under the title ‘Credit Limit’, It does not inform me either of a credit limit or method of deciding one. It also does not inform me of charges in the event of a default. These omissions individually therefore make the agreement unenforceable.

 

 

I do not acknowledge this alleged debt and therefore dispute the legality of the debt until such a time as the production of a satisfactory and enforceable consumer credit agreement has been supplied.

 

Furthermore, you are reminded that a creditor is not permitted to take any action against an account whilst it remains in dispute. The lack of a properly executed credit agreement is a very clear dispute and therefore the following applies:

 

• You may not demand any payment on this account, nor am I obliged to offer any payment to you.
  
• You may not add any further interest or charges to this account.
  
• You may not pass this account to any third party.
  
• You may not register any information in respect of this account with any of the credit reference agencies.
  
• You may not issue a default notice related to this account.
  

 

I look forward to your reply regarding this matter.

 

 

Yours faithfully,

[militantconsumer]

Hi NB,

 

Do you have a thread started on this case?

 

I would prefer to comment on your own thread, so it doesn't get mixed up with my friend's case.

[militantconsumer]

My friend had an idiot call from Egg today.

 

She told them she didn't want to discuss her account over the phone and that the account is in dispute.

 

They said they know that, but they are looking for an increase in monthly payments!

 

That will be an increase from zero then I presume.

 

In your dreams, Egg.

 

Bizarrely, they then told my friend she could have 28 days to come up with a completed income and expenditure questionnaire and an increased payment.

 

Ok, look forward to talking to you again in 28 days then.

 

Oh yes, and they are still totally silent on the loan account - even though its alleged balance is ten times the amount they are chasing on this credit card. Perhaps we should stop paying that one as well.

[joneseyblod]

Interesting thread, have own issues with egg too so am subbing

[hopkinson]

I am going to try this as well using same template. Already defaulted by them even before receipt of statements. Have received Record detail and one note says 26/02/09 RosebyL - Unenforceable CCA. Not sure if this means anything but am going to give it a go and will keep this thread updated so that we can compare notes. Would like legal support though can anyhelp suggest anything? am getting tired of the fights. Have won TSB,Egg both PPI and bank charges but this seems to be breaking case law.Help

[militantconsumer]

... Have received Record detail and one note says 26/02/09 RosebyL - Unenforceable CCA. Not sure if this means anything ...

 

What???

 

Is this from the 1 inch thick pack with all the call notes?

 

Could you post up a copy?

 

Do you have a thread going on this?

[beachcomber60]

Following with interest, about to launch my own ppi claim against Egg.

 

If they say the cosumer should have read ppi T&C's on line at the time of application, now if my memory serves me correctly if the application wasn't completed with a set time you were 'timed out' and had to start again, I can remember this happening to me & the OH when we opened our Egg cards.

 

Best of luck.

 

Beachy

[militantconsumer]

If they say the cosumer should have read ppi T&C's on line at the time of application, now if my memory serves me correctly if the application wasn't completed with a set time you were 'timed out' and had to start again, I can remember this happening to me & the OH when we opened our Egg cards.

 

Thanks Beachy, that is a VERY good point - and one which deserves to be spread around the forum a bit more.

 

I will certainly add it to the list of reasons we are not going to pay them anything - and, in fact, I think I might include it in the FOS complaint which we are due to start just before the 6 month deadline is up next month.

 

The alleged outstanding balance in our case is well short of £1,000 - so I can't see them bothering with a court claim against this mounting body of evidence against them.

[beachcomber60]

No problem

 

UNITED WE STAND !

[hopkinson]

I can see I answered your question on the wrong thread! Great thick pack all jumbled up as we have three claims going. Will try to post up but had nightmare last time I tried to do this. Definitely call notes.

[angry cat]

Following with interest, about to launch my own ppi claim against Egg.

 

If they say the cosumer should have read ppi T&C's on line at the time of application, now if my memory serves me correctly if the application wasn't completed with a set time you were 'timed out' and had to start again, I can remember this happening to me & the OH when we opened our Egg cards.

 

Best of luck.

 

Beachy

 

Absolutely correct!

 

AC

[militantconsumer]

I can see I answered your question on the wrong thread! Great thick pack all jumbled up as we have three claims going. Will try to post up but had nightmare last time I tried to do this. Definitely call notes.

 

Well, I suppose it could mean somebody at Egg reviewed your agreement and decided it was unenforceable..... or it could mean you told them it was unenforceable..... or it could mean all sorts of things.

 

For example, when Egg are responding to complaints about their £16 charges they have a series of 3 letters they send before giving up and paying it all back. On the "call notes" (which also cover letters) these are abbreviated to "OFT1", "OFT2" and "OFT3".

 

So if means nothing else then it means that ALL Egg staff are well aware of the issue of unenforceable CCAs. Otherwise, they wouldn't abbreviate in such a way, would they?