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Monument agreement. Is it unenforceable??


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Dear Sirs,

 

Account no

 

 

Re: my request under the Consumer Credit Act 1974

 

This account is in Dispute .

 

On xx/xx/2007 I wrote to xxxxxxxxx requesting that xxxxxxx supply me a true copy of the executed credit agreement for this account.

In response to this request I was supplied a mere rapid reply card which did not comply with the requirements of the Consumer Credit Act 1974.

 

The document sent purporting to be a credit agreement does not contain any of the prescribed terms as required by section 60(1) Consumer Credit Act 1974. The Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) made under the authority of the “1974 Act” sets out what the prescribed terms are, I refer you to Schedule 6 Column 2 of SI 1983/1553 for the definition of what is required. Suffice to say none of the terms are present in the document

 

Since this document does not contain the required prescribed terms it is rendered unenforceable by s127 (3) consumer Credit Act 1974, which states

 

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).

 

This situation is backed by case law from the Lords of Appeal in Ordinary (House of Lords) the highest court in the land. Your attention is drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the Consumer Credit Act 1974 the agreement cannot be enforced.

 

In addition should you continue to pursue me for this debt you will be in breach of the OFT guidelines, I draw your attention to the Office of Fair Trading’s guidance on debt collection

The OFT guidance which was issued July 2003 (updated December 2006) relating to debt collections and what the OFT considers unfair, I refer to page 5 of the guidance which states;

 

2.6 Examples of unfair practices are as follows:

 

h. Ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment.

 

I require you to produce a compliant copy of my credit agreement to confirm I am liable to you or any organisation, which you represent for this alleged debt, if you cannot do so I require written clarification that this is the case. Should you ignore this request I will report you to the Office of Fair Trading to consider your suitability to hold a credit licence in addition to a complaint to Trading Standards, as you will be in breach of the Administration of Justice Act 1970 section 40

 

Since the agreement is unenforceable and the default notice is non compliant, it would be in everyone’s interest to consider the matter closed and for your client to write the debt off. I suggest you give serious consideration to this as any attempt of litigation will be vigorously defended and I will counter claim for all quantifiable damages

 

I respectfully request a response to this letter in 14 days

 

 

Yours

Print name do not sign

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Does anyone have a copy of Schedule 6 Column 2 of SI 1983/1553 showing what the prescribed terms are, for reference?

 

I may need it with a similar dispute with Monument.

 

Thanks

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I get confused over agreements being unenforceable under 127(3) of the 1974 Act as I have read that this section was repealed by Section 15 of the 2006 Act and so no agreement is unenforceable. The decision is now at the discretion of the judge.

 

"a court will have the power to determine in its discretion whether agreements are enforceable in accordance with section 127(1) and 127(2) regardless of the breach in question"

 

So surely 127(3) is a thing of the past?

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Has anyone any experiance of succesfully pleading that their agreement is unenforceable relying on 127(3) of the 1974. I am heading for such a dispute with Cabot over a Monument card (pre 2004 agreement) and will be relying on this argument to defend a County Court Claim?

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Posted by creditcardmug http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/185878-advice-help-cca-1974-a.html

 

. Under the Consumer Credit Act 1974 there are certain conditions laid down by parliament which must be complied with if such agreement is to be enforced by the courts

 

14. Firstly, the agreement must contain certain Prescribed terms under regulations made by the Secretary of State under section 60(1) CCA 1974, the regulations referred to are the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) The prescribed terms for a Running credit account as set out below

 

15. The prescribed terms referred to are contained in schedule 6 column 2 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and are inter alia: - A term stating the credit limit or the manner in which it will be determined or that there is no credit limit, A term stating the rate of any interest on the credit to be provided under the agreement and A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following--

1. Number of repayments;

2. Amount of repayments;

3. Frequency and timing of repayments;

4. Dates of repayments;

5. The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable

 

16. It is submitted the credit agreement supplied falls foul of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) in so far that the prescribed terms are not contained within the agreement. These terms must be contained within the agreement. They cannot be contained within a separate document. The prescribed terms must be with the agreement for it to be compliant with section 60(1) Consumer Credit Act 1974

 

17. I refer to the judgment of 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."

18. If the agreement does not contain these terms in the prescribed manner it does not comply with section 60(1) CCA 1974, the consequences of which means it is improperly executed and only enforceable by court order

 

19. Notwithstanding point 18, The agreement must be signed in the prescribed manner to comply with s61 (1) CCA 1974, if the agreement is not signed by debtor or creditor it is also improperly executed and again only enforceable by court order

 

20. The courts powers of enforcement where agreements are improperly executed by way of section 65 CCA 1974 are themselves subject to certain qualifying factors. Under section 127 (3) Consumer Credit Act 1974 the requirements are laid out clearly what is required for the court to be able to enforce the agreement where section 65(1) has not been complied with

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).

21. Further more the courts attention is also drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the consumer credit act 1974 and the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and Consumer Credit (Agreements) (Amendment) Regulations 2004 (SI2004/1482) the agreement cannot be enforced

 

22. With regards to the Authority cited in point 21, I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul)

28.........I should outline the salient provisions of the Consumer Credit Act 1974. Subject to exemptions, a regulated agreement is an agreement between an individual debtor and another person by which the latter provides the former with a cash loan or other financial accommodation not exceeding a specified amount. Currently the amount is £25,000. Section 61(1) sets out conditions which must be satisfied if a regulated agreement is to be treated as properly executed. One of these conditions, in paragraph (a), is that the agreement must be in a prescribed form containing all the prescribed terms. The prescribed terms are the amount of the credit or the credit limit, rate of interest (in some cases), how the borrower is to discharge his obligations, and any power the creditor may have to vary what is payable: Consumer Credit (Agreements) Regulations 1983, Schedule 6. The consequence of improper execution is that the agreement is not enforceable against the debtor save by an order of the court: section 65(1). Section 127(1) provides what is to happen on an application for an enforcement order under section 65. The court 'shall dismiss' the application if, but only if, the court considers it just to do so having regard to the prejudice caused to any person by the contravention in question and the degree of culpability for it. The court may reduce the amount payable by the debtor so as to compensate him for prejudice suffered as a result of the contravention, or impose conditions, or suspend the operation of any term of the order or make consequential changes in the agreement or security.

 

29. The court's powers under section 127(1) are subject to significant qualification in two types of cases. The first type is where section 61(1)(a), regarding signing of agreements, is not complied with. In such cases the court 'shall not make' an enforcement order unless a document, whether or not in the prescribed form, containing all the prescribed terms, was signed by the debtor: section 127(3). Thus, signature of a document containing all the prescribed terms is an essential prerequisite to the court's power to make an enforcement order. The second type of case concerns failure to comply with the duty to supply a copy of an executed or unexecuted agreement pursuant to sections 62 and 63, or failure to comply with the duty to give notice of cancellation rights in accordance with section 64(1). Here again, subject to one exception regarding sections 62 and 63, section 127(4) precludes the court from making an enforcement order.

 

30. These restrictions on enforcement of a regulated agreement cannot be sidestepped.....

And further more

36. In the present case the essence of the complaint is that section 127(3) of the Consumer Credit Act has the effect that a Regulated agreement is not enforceable unless a document containing all the prescribed terms is signed by the debtor

 

49. ".............The message to be gleaned from sections 65, 106, 113 and 127 of the Consumer Credit Act is that where a court dismisses an application for an enforcement order under section 65 the lender is intended by Parliament to be left without recourse against the borrower in respect of the loan. That being the consequence intended by Parliament, the lender cannot assert at common law that the borrower has been unjustly enriched.

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Thanks for the info Cerberusalert. It is a great supplement to some of the information I have collected.

 

However I would still like to hear from anyone who has actually successfully pleaded this argument in court.

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Hi. Arbo.

 

You have a good point. I would also like to hear from anybody that has been to court. As at this stage we are all believing that the agreement is unenforceable but without proof of court hearings we are all in the dark and may well be in for a shock when they finally reach court.

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Just left Court today where the judge agreed that Monument's agreement could not be enforced (they had the 'Reply Card' and only current T&C). I used the above stuff from 'cerberusalert' (thanks) trimmed down a bit.

 

The Judge agreed that 127(3) meant he had to dismiss claim as unenforceable.

 

I can provide a case claim number etc if you want (Turnbull Rutherford represented HFO Services)

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Just got in from work. Great news & well done Browne family. Was it really as straight forward as that? Any info would be useful. The Monument account has allegedly been assigned to Cabot so it is against their claim that I am having to defend so I will also use the assignment stuff as well. Any more info from anyone on the liabilities and responsibilities that the assignee inherits would be welcome. My defence is to be issued next week.

 

Any information on how the procedings went would be welcome as I am a litigation virgin, can not afford solicitor assistance and obviously a bit nervy.

 

Well done again.

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I have read other threads where people have not seen things go smoothly so don't be complacent but I really believe the law is on your side and you must win!

 

In my case. it was very straightforward but although you mustn't take anything for granted (and can be a plus to be nervous in front of a judge sometimes as they may then be more patient and helpful) you must believe that 127(3) is so strong that if there are no prescribed terms and conditions, the case is effectively over - the agreement cannot be enforced.

 

That may be a very simple view but I believed that and therefore I was pretty confident that whatever was thrown at me, without those prescribed terms and conditions, the matter was always going to be settled in my favour.

 

Be prepared. Understand what you're going to say. Basically there are no prescribed terms and therefore the agreement cannot be enforced without a court order and 127(3) means that the agreement can't be enforced.

 

The defence set out by 'cerberusalert' is excellent. Get copies of the cases referred to from the internet and take 3 copies of each with you - one to give to the judge and one for the opponent. Check the bits referred to in 'cerberusalert's' defence (check the numbering as I think the TUCKEY paragraph is not 33). I took a shortened version of the defence with me into court and when it came to presenting my case, I asked if I could give it to the judge (plus gave one to solicitor) to read as it was easier for me to write than say. This helped me be less nervous and the judge having to take notes.

 

I see from other threads there are judges who have taken the view 'you had a card, you owe the money and therefore you must pay'. I understand that view but the fact is 127(3) says whatever you think, no prescribed terms = no enforcement. The House of Lords said this was "harsh" (and for agreements after 2007, 127(3) no longer applies, probably for that reason - too harsh against the lender) but that's the law!

 

Good luck and hope the above helps.

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Thats great news - I've just sent account indispute letter to monument all they sent me was a tear off and current Tc's

 

The information here on this thread is fantastic and feel motivated to take this on

 

Again Great news

 

Squidward

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Brownefamily - thanks for the post and advice. Still a bit nervy but am encouraged by your result. I will be filing my defence next week. I am not sure how this will work out. but because the claim is through Northampton & the PoC are very limited I will issue a defence on the basis of insufficient information and request that the court instruct Cabot to respond to my Notice Under Civil Procedure Rules requesting the relevant information (credit agreement and so forth) as per the examples from this great website. I will then expect to defend the matter further in court with skeleton arguments along the lines of 127(3) and anything else I can throw at it that is relevant - no default notice, no proper assignment etc etc.

 

Squidward - it looke like I am further down the line than you as I am actually defending a claim from Cabot in respect of a Monument card as detailed above. I will keep this thread going with updates and perhaps we can keep each up to speed with developments.

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Hi Everyone,

I asked for my CCA copy from monument and they sent me my signed copy but new terms and conditions also I've signed the agreement in 2006. Can anyone advise that is it unenforceable??? And also what letter I've to send them so they'll bu99er off. Cheers for help.

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument3.jpg

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument2.jpg

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument1.jpg

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Hi Everyone,

I asked for my CCA copy from monument and they sent me my signed copy but new terms and conditions also I've signed the agreement in 2006. Can anyone advise that is it unenforceable??? And also what letter I've to send them so they'll bu99er off. Cheers for help.

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument3.jpg

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument2.jpg

 

http://i667.photobucket.com/albums/vv40/capricornme1/Monument1.jpg

 

All the prescribed terms are within the document so it is enforceable.

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