Egg Credit Agreements - Mine is from Dec 1999 - is it enforceable?

[topgeeza]

Hi,

 

I've recently heard about Egg's 'unenforcable' CCA's which has made me look at mine which after my request to them for a copy, I found to be from 14th December 1999.

 

I was issued with a default back in October 2002 AFTER Egg had accepted an offer of payment from a debt management plan that I had arranged (and still have!) with the CCCS. I still have over £3,500 to pay back to Egg (and as side issues, they applied a second default on my account in March 2004 AND they continued to apply interest to my account after it was terminated in Oct 2002 until March 2004 at which point they refunded only £600 of the extra £2200 interest charges they'd applied since the first default in Oct 2002!)

 

The Egg Card Agreement that they have sent me appears to be very basic....just two pages! I don't have a scanner so i've copied the wording into a word doc and pdf'd it into Adobe and attached the pages to this post so you can see the content.

 

 

Can you have a look to see if you think I could challenge Egg on this for an unenforceable agreement and give any comments that you may have?

 

Many thanks in advance,

Neil.

Egg Card Agreement.pdf

Edited April 15, 2009 by topgeeza
incorrect attachment!

[Viscount Stair]

It is as enforceable or unenforceable as any other Egg agreement of similar vintage.

 

How enforceable or unenforceable is a matter of very heated debate on another thread.

 

I reckon it is unenforceable because the credit limit (a prescribed term) is not properly set out in the signature document, the interest rate (another prescribed term) is not fully stated and the payments (the final prescribed term) rely on terms defined outside the signature document.

 

That does not represent a unanimous view.

[pussycatdoll]

It is unenforceable as there is no reference to purchases made using the card and any interest rate that would be applicable to those purchases.

 

So therefore a required term is missing. There is also an ongoing thread that you may like to read which explains the reasoning and will give you far more insight into the technicalities of Egg agreements.

 

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

 

PCD

[topgeeza]

It is unenforceable as there is no reference to purchases made using the card and any interest rate that would be applicable to those purchases.

 

So therefore a required term is missing. There is also an ongoing thread that you may like to read which explains the reasoning and will give you far more insight into the technicalities of Egg agreements.

 

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

 

PCD

 

I had a read of that thread, but at 24 pages so far, it seemed pretty disjointed to me (i.e not really giving me an idea of what my next steps should be).

Can you explain what I could (and should) do as my next steps here? Is there a template email I should be firing off to Egg? What would be the steps after that?

 

Many thanks,

Neil.

[craigers]

There is no mention of charges as detailed in paragraph 22 of Schedule 1 of the Consumer Credit (Agreements) Regulations 1983:

 

"A list of any charges payable under the agreement to the creditor upon failure by the debtor or a relative of his to do or refrain from doing..."

[pussycatdoll]

IMHO this is a difficult one deciding which way to go. As you will have noticed from my previous post that there is no term for interest on purchases. In my opinion therefore I would take the view that they have been illegally charging interest on purchases since the card was taken out. In my particular case i am fairly sure that the amount of interest I have been charged is slightly less than what I owe them. So I am in the process of drafting a letter suggesting that they just write the debt off because of the above reasons.

 

However in your case it may be possible that you are entitled to a refund of interest paid to date plus compound interest - this could amount to a substantial amount of lolly coming your way. Alternatively you take the unenforceable agreement route. Stop paying them and send out the unenforceable debt letter outlining the reasons why it is unenforceable. This method is designed to force their hand and eventually take you to court for non-payment. My guess is that they wont bother as they havent a leg to stand on I believe with this agreement.

 

I would appreciate more experienced caggers advice on this as this is only my personal opinion

 

PCD

[topgeeza]

IMHO this is a difficult one deciding which way to go. As you will have noticed from my previous post that there is no term for interest on purchases. In my opinion therefore I would take the view that they have been illegally charging interest on purchases since the card was taken out. In my particular case i am fairly sure that the amount of interest I have been charged is slightly less than what I owe them. So I am in the process of drafting a letter suggesting that they just write the debt off because of the above reasons.

 

However in your case it may be possible that you are entitled to a refund of interest paid to date plus compound interest - this could amount to a substantial amount of lolly coming your way. Alternatively you take the unenforceable agreement route. Stop paying them and send out the unenforceable debt letter outlining the reasons why it is unenforceable. This method is designed to force their hand and eventually take you to court for non-payment. My guess is that they wont bother as they havent a leg to stand on I believe with this agreement.

 

I would appreciate more experienced caggers advice on this as this is only my personal opinion

 

PCD

 

VERY interesting pussycatdoll!!

Especially as my debt with them when they applied a default to my account back in October 2002 was £10,500!!! I still owe them £3,500 ish.

 

I like the sound of the first option of 'a refund of interest paid to date plus compound interest' as this will be huge!!!

 

Can you or anyone give me a step-by-step of what I should do now? (inc links to any template letters if at all possible?)

 

Many thanks,

Neil

 

ps - i've just had my mortgage broker call me today advising of a 'new service' that they are offering re unenforceable loan recoveries!!!

[topgeeza]

Is there anyone who can give me a step-by-step of what I should do now? (inc links to any template letters if at all possible?)

 

Many thanks,

Neil

[basa48]

Is there anyone who can give me a step-by-step of what I should do now? (inc links to any template letters if at all possible?)

 

Many thanks,

Neil

 

You really must wade through the thread given in pussycatdoll's post above.

 

Study the CCA1974 & CCRegs 1983. Get to understand the arguments about the flaws in the agreement. There are template letters about which you can modify for your own use.

 

Don't rely on template letters or defences you will get into trouble quoting stuff you don't understand.

 

There are basically 4 arguments

 

• approved is not a prescribed term, it should be credit limit
  
• there is no interest rate quoted for cash advances
  
• there is no mention of charges in default except in the t&cs
  
• the term varying the apr is incorrectly quoted
  

[Capricorn1601]

Just for the record, I am in exactly the same position. Mine is end of 1999. Please read the thread. I personally am awaiting news of the outcome of a case PT is involved in. When I know what this is I will decide on the best way forward.

 

In the meantime, I might SAR Egg. Knowing what I have paid over the years in interest could be another option etc. I am not in default... yet, and my current balance is just under £3k. I had one of those cards which was terminated in the mass culling early last year, I had stopped using the card well before then and was just paying off what I could afford (above min payments) each month. Since the termination I just pay minimum.

[Peterbard]

You really must wade through the thread given in pussycatdoll's post above.

 

Study the CCA1974 & CCRegs 1983. Get to understand the arguments about the flaws in the agreement. There are template letters about which you can modify for your own use.

 

Don't rely on template letters or defences you will get into trouble quoting stuff you don't understand.

 

There are basically 4 arguments

 

• approved is not a prescribed term, it should be credit limit
  
• there is no interest rate quoted for cash advances
  
• there is no mention of charges in default except in the t&cs
  
• the term varying the apr is incorrectly quoted
  

 

Hi I will try to restric t myself to facts as i think everyone may know my opinion on this.

The first of your points.

The conjecture is based on a county court case Central trust vs Spurway. I think the essentials of this judgement are summed up in the comments on the last page."

Comment

In Ocwen,the learned judge held that the requirement to include a” term stating the amount of credit” did not mean the word credit must be used. The judge in the present case did not hold that the word credit must be use in stating the amount of credit. Rather he held that there must be no confusion in the mind of the lay reader as to what the amount of credit was.

From me no comment

THe scond point could be due to the foxed sum being factored into the APR and causing it to be differnt from the APR in th eordinalry transactin this would be a charge for credit and not effect the interst rate so it being the same would not have to be re quotedthis is conjecture.

There is no requirement for mentioning the default charges in pre 2005 agreements the orriginal 1983/1553 regs say " agrements where default charges are applicable,"(or somehing simmilar)this was changed in 2005 to all agreements. and even then they only have to be embodied in the document ,which means that they could be included in sepperate t and c's this is not conjecture.

There are a few terms quoting the APR i am not sure which ones you are reffering to.

The APR on a ruinning credit account are quite tricky to calculate especially when they include fees and even when they don't.

On a fixed sum loan you have a period of credit which is essintial for any interst or APR calculation on an credit card loan you don't, it is open ended. So you have to use assumptions these are defined it the regs and have been modified a few times since 1983.They assume for the purpose of the calculation that the amount is such and such and the period is one year. So it depends on when the agrement was dated and which assumptions were used.

Peter

[angry cat]

Re: Credit Limite:

:

Rather he held that there must be no confusion in the mind of the lay reader as to what the amount of credit was."

 

Exactly!

 

Next point:

 

In the OFT's view, credit card agreements should generally be regarded as 'unitary multi-part' agreements. Each part should be treated for the purposes of the Act as a separate agreement by virtue of s18(2).

In principle, therefore, an APR should be shown for the 'unitary' element and separately for each 'part agreement'.

 

A credit card agreement will typically comprise elements relating to purchases, balance transfers and cash advances. These fall into different statutory categories for the purposes of the Act. There will also be an overall agreement governing how the credit card is to be operated and how payments are to be allocated to the different parts.

 

Schedule 7 obviates the need to show APRs for each 'part agreement' constituting a credit card agreement where this includes a purchase element.

However, the OFT recognise that the law in this area is uncertain, and it is arguable that individual APRs should be shown in addition to the overall APR.

Sch 1 requires a statement of 'the APR in relation to the agreement', and arguably this applies to each 'part agreement' as well as the credit card agreement as a whole, given that s18 of the Act has not been amended.

 

Moral of the above is that the consumers should not be confused;

matters should be crystal clear...!

 

AC

[Peterbard]

Re: Credit Limite:

:

Rather he held that there must be no confusion in the mind of the lay reader as to what the amount of credit was."

 

Exactly!

 

Next point:

 

In the OFT's view, credit card agreements should generally be regarded as 'unitary multi-part' agreements. Each part should be treated for the purposes of the Act as a separate agreement by virtue of s18(2).

In principle, therefore, an APR should be shown for the 'unitary' element and separately for each 'part agreement'.

 

A credit card agreement will typically comprise elements relating to purchases, balance transfers and cash advances. These fall into different statutory categories for the purposes of the Act. There will also be an overall agreement governing how the credit card is to be operated and how payments are to be allocated to the different parts.

 

Schedule 7 obviates the need to show APRs for each 'part agreement' constituting a credit card agreement where this includes a purchase element.

However, the OFT recognise that the law in this area is uncertain, and it is arguable that individual APRs should be shown in addition to the overall APR.

Sch 1 requires a statement of 'the APR in relation to the agreement', and arguably this applies to each 'part agreement' as well as the credit card agreement as a whole, given that s18 of the Act has not been amended.

 

Moral of the above is that the consumers should not be confused;

matters should be crystal clear...!

 

AC

 

Hi

I think the gist of your argument if i have it right is that the word "credit" must be used isn't that directly denied in the above quote.

Infact the judge confirmed that their is no stipulation in statute for a term in the none technical(badge) sence to be used.

 

I have yet to meet the ordinally person that understands APR anyway.

Any way it is not a prescribed term.

The section 18 argumetn is with respect a differnt matter entirely, and is curerntly a none starter in this respect, not my opinion the high courts .

Just a thought but why would the APR have to be quoted anyway like i said it is not a prescribed term.

If you say that the cash advance under a credit card agreement was a D-C fixed sum agreemntn the the interst rate is not a prescribed term.Then you have the heath hearing that says that this kind of multi catagory agrement is not a multipart agrement anyway because it comes under section 18(3) and is one loan.

Not exactly what i would call cut and dried is it.

One might even go as far as to say down right improbable don't you think.

 

Peter

[militantconsumer]

Hi topgeeza

 

I appreciate that you don't want to wade through the long thread. In fact, only the first 2-3 pages are useful. There is a long period in the middle where peterbard rejects the unenforceability arguments and the thread turns into a bit of a slanging match. But if you look at the last few pages you will see that PT has had a positive result, and is due to post all the details shortly.

 

Loads of people on here are now refusing to pay Egg based on this.

 

Ultimately you have to make your own decision. You already have a default (now more than 6 years old and so should have disappeared from your credit files) so that danger ought not to stop you. You will undoubtedly receive a lot of agressives phone calls, even a home visit. Court action is the ultimate sanction - which, of course, you might win.

 

In terms of what to do, it depends what you want to achieve. We sent in a dispute letter and stopped paying a few months ago, and Egg have been basically impotent ever since. But we have a smaller balance than you (less point in Egg pursuing it) and also we are throwing payment protection insurance into the argument. But you can see what we are doing and the letter we sent here:

http://www.consumeractiongroup.co.uk/forum/egg/178357-militant-consumer-challenges-egg.html

 

Good luck.

[topgeeza]

Hi topgeeza

 

I appreciate that you don't want to wade through the long thread. In fact, only the first 2-3 pages are useful. There is a long period in the middle where peterbard rejects the unenforceability arguments and the thread turns into a bit of a slanging match. But if you look at the last few pages you will see that PT has had a positive result, and is due to post all the details shortly.

 

Loads of people on here are now refusing to pay Egg based on this.

 

Ultimately you have to make your own decision. You already have a default (now more than 6 years old and so should have disappeared from your credit files) so that danger ought not to stop you. You will undoubtedly receive a lot of agressives phone calls, even a home visit. Court action is the ultimate sanction - which, of course, you might win.

 

In terms of what to do, it depends what you want to achieve. We sent in a dispute letter and stopped paying a few months ago, and Egg have been basically impotent ever since. But we have a smaller balance than you (less point in Egg pursuing it) and also we are throwing payment protection insurance into the argument. But you can see what we are doing and the letter we sent here:

http://www.consumeractiongroup.co.uk/forum/egg/178357-militant-consumer-challenges-egg.html

 

Good luck.

 

Hi MC,

Thanks for your post, it has given me some clarity and a little more confidence now! If I do go ahead and take Egg to court, would I also be able to request that they re-pay the monies i've paid to them as the agreement was unenforceable?

 

 

I've sent of CCA requests to my other creditors too (RBS Cards, M&S (loan), & MBNA to assess the status of my original agreements with them

 

Many thanks,

TG

[TerryB]

I have just found a company who claim they will BUY your credit card debt and take on the liability for it ! (fees £295 up front (refundable) and also 10% of the outstanding balance once the agreement has been audited) They say you can legally transfer the debt, notify the lender/experian etc and you will no longer be liable for any further payments. They say it can all be done within 14 days. Anyone heard of this ? Is it legal ?

[militantconsumer]

Up front fees???

 

If it sounds too good to be true, it probably is!

 

Steer well clear.

[angry cat]

Up front fees???

 

If it sounds too good to be true, it probably is!

 

Steer well clear.

 

Agree, steer well clear!

 

AC

[BEC01]

I had a read of that thread, but at 24 pages so far, it seemed pretty disjointed to me (i.e not really giving me an idea of what my next steps should be).

Can you explain what I could (and should) do as my next steps here? Is there a template email I should be firing off to Egg? What would be the steps after that?

 

Many thanks,

Neil.

 

Neil,

The fact is that people have successfully taken Egg to court and won on this.

So I would certainly encourage you to pursue this.

If you are unsure, then there are companies that can help you for a few hundred quid.

I don't take the view that everyone can do it themselves, so if you feel overwhelmed, take a look around at what support there is. BUT be very thorough in your research on the companies.

 

The preferential route is using support from this forum though.

 

The companies that are offering to buy credit card accounts sounds very suspect. I wouldn't be surprised to find the banks are behind all of this. 10% of an unenforceable balance is a good result for them.

 

Interesting times.

 

The economy needs people spending, not paying off debt (the government has done that for the banks). So I expect that there will be "opportunities" for the public to clear large debts everywhere soon.