hsbc does incorrect = unenforceable?

[atwozee]

TUCKEY LJ in the case of Wilson and another v Hurstanger Ltd [2007] EWCA Civ 299

"[11] Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated

consumer credit agreements". Some of this information mirrors the terms prescribed by Sch 6, but some does not. Contrasting

the provisions of the two schedules the Judge said:

 

 

"33 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 (with the benefit of legal advice if necessary) 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. More detailed requirements, which

are designed to ensure that the debtor is made aware, so far as possible, of specified information (including information contained in the

minimum terms) are to be found in Schedule 1."

[atwozee]

According to the above judgement then no – the HSBC are more than capable of getting the figures correct – they don’t really have a defence - even if the mistake were in your favour it would still be mis-sated – the prescribed terms are prescribed for a reason – they are not a de minimus issue and should not be overlooked as a trivial issue.

They had a choice to get the calculations correct – they aren’t difficult calculations – if they get them wrong then the above case law applies.

[atwozee]

s127(3-5) was repealed but I think that only applies to agreements signed on or after 06/04/2007 - you might just have squeezed it.

[atwozee]

Whichever signature was the latter would be the one that executed the agreement and that would be the applicable date – so the latter date needs to be 05/04/2007 or earlier.

[atwozee]

that's fine then. what would you suggest next - obviously i shall wait for them to confirm their mistake in writing which they have agreed to - then what write back to say i believe the agreement to be invalid?

 

No matter what you do the HSBC will not agree that their agreement is unenforceable – just so you know.

If you stop payments then they will probably default you and start to harass you for payment – they will not just lie down so don’t expect an easy ride.

But once you are sure they have made a mistake with a prescribed term and s127(3-5) applies then you are within your rights to dispute the agreement and go all the way to court if necessary.

The choice is yours really and I advise you to read as much as you can and make an informed decision – forget being an HSBC customer from now on though if you choose to dispute the agreement – so if you bank with them then best to get an account somewhere else before you do anything.

[atwozee]

TBH it’s not hard to get the prescribed terms right is it – this is about as clear cut a case of an agreement being unenforceable as there could be.

I’ve already quoted the case law – that’s all you need really.

How could they get this so wrong?

[atwozee]

Modify to suit (if you want to make a full and final offer that’s entirely up to you – although you might consider payments already made against an unenforceable agreement as being sufficient) and send to HSBC head office in London

 

Dear Sir/Madam

 

Account Number xxxxxxxxxxxxxx

 

I refer to your letter dated 24/03/2009 in which you confirm that the repayment schedule of the above account have been mis-stated on the written agreement which was signed by me on xx/xx/xxxx and the HSBC on xx/xx/xxxx.

 

The making of the agreement was subject to the strict provisions of the Consumer Credit Act 1974 (“CCA”) and its associated regulations. Schedule 6 of the Consumer Credit (Agreements) Regulations 1983 clearly states that for this type of agreement the repayment schedule is a prescribed term for the purpose of section 127 (3) of the CCA.

 

In the case of Wilson & Anor v Hurstanger Ltd [2007] EWCA Civ 299 it was ruled that the prescribed terms for the purpose of schedule 6 of the regulations could not be mis-stated in the slightest and if they were then the whole agreement would be ruled irredeemably unenforceable against the debtor by virtue of s127 (3) of the CCA.

 

As a consequence of the serious error made by the HSBC in setting out the repayment schedule this agreement would prove to be unenforceable even by a court order. As such I will not be making any further payments against this account and I no longer recognise the agreement as being legally binding.

 

Because I have clear grounds to dispute the enforceability of this agreement you are advised to cease any further collection activities regarding this account. All further communication must be in writing but please be aware that any demands for payment made by you would be considered to be an act of harassment.

 

Yours faithfully

presumeddead