Invalid Default Notices

[emandcole]

Very interesting thread.

 

I've been served a default notice (now court claim) whereby besudes a few 'charges' the amount also includes a 'tracing' fee of £50 which the OC charged to the account because we had not informed tgem of our change of address, they later stated that it was their error & that they confirmed receiving our letters but lost them.

 

They said that the 'fee' would be waived but its still on the account & we are charged interest on it.

 

Would this make the DN invalid?

 

First things first how long were you given to make the default payment :idea:

 

Best to give the date of the default notice and then give the date they wanted you to pay by. If it doesn't specify a date but just says something like 'pay within X days of this notice' it's dodgy.

[beachcomber60]

First things first how long were you given to make the default payment :idea:

 

Best to give the date of the default notice and then give the date they wanted you to pay by. If it doesn't specify a date but just says something like 'pay within X days of this notice' it's dodgy.

 

 

I think that date wise the DN is correct issued 29th July 2009 & given until 20th August 2009 to remedy

[nks22]

My question is what is the effect (if any) of issuing a default notice and terminating the account whilst a s78 CCA request remains outstanding?

 

I don't think there's any effect. The validity of a DN/Termination doesn't depend on a CCA request.

[emandcole]

I think that date wise the DN is correct issued 29th July 2009 & given until 20th August 2009 to remedy

 

Technically then it is still incorrect on a totals basis but de minimis would come in I suspect, what are the percentages involved?

 

Assuming it's correctly entitled as a default notice too?

[beachcomber60]

Technically then it is still incorrect on a totals basis but de minimis would come in I suspect, what are the percentages involved?

 

Assuming it's correctly entitled as a default notice too?

 

The DN format was checked out on CAG when I received it - nowt found wrong with it.

 

DN issued for £1,850 & which also contains unlawful charges of about £250

[emandcole]

Not even 10% then, maybe 7% or so. Still, the amount is not a small one so I'd push home the fact that an innacurate default notice is a complete defence.

 

If they cannot get such amounts right you are being unfairly treated by the creditor. As for this tracing fee if that was applied to the original balance before the default was served and then subsequently withdrawn as they admitted the letters from you had been lost that should be enough to question the validity of the default.

 

Incorrect is invalid, guess it comes down to the judge on the day but I would definitely fight it on the grounds that their mistakes made it very difficult for you to provide remedy and the resultant litigation is vexatious.

 

Worth a shot anyway

[beachcomber60]

Not even 10% then, maybe 7% or so. Still, the amount is not a small one so I'd push home the fact that an innacurate default notice is a complete defence.

 

If they cannot get such amounts right you are being unfairly treated by the creditor. As for this tracing fee if that was applied to the original balance before the default was served and then subsequently withdrawn as they admitted the letters from you had been lost that should be enough to question the validity of the default.

 

Incorrect is invalid, guess it comes down to the judge on the day but I would definitely fight it on the grounds that their mistakes made it very difficult for you to provide remedy and the resultant litigation is vexatious.

 

Worth a shot anyway

 

Thanks for your input, yes the tracing fee was applied about six months before the DN, although they admitted their mistake, in writing, in losing our letters and apologised (one was change of address & the other was that we are in severe financial difficulties & wanted to set up a payment plan) they never removed the £50 from the balance.

[Guest]

emandcole

 

do you have a link to where i can find the full judgement in the Woodchester case? thanks.

[diddydicky]

Just to clarify this issue a little in Woodchester v Swayne and Co 1998, the Default Notice overstated the Arrears by 38.71% and was declared invalid, so any Notice that is at least that inaccurate should also be invalid based on that case history.

 

The degree of error will determine if the notice is invalid, an error greater than 38.71% will exceed the Default Notice error noted in Woodchester v Swayne and Co 1998, so can be considered invalid based on that precedent. Below 38.71% margin for error, and there will be a debate if the error is significant enough to invalidate the Default Notice, or if the error is just de minimis.

 

I believe de minimis is technically unspecified and as such wide open to abuse but case law such as that above does provide some much needed precedent to build on.

 

Of course a default notice that is even 1p out should be invalid, because any large and sophisticated financial institution ought to know down to the last penny what you owe. They are expected to have and use an expansive array of technology and information to get such matters right in the first place, strange how this doesn't happen.

 

Of course the ideal is to have a dn that is wildly innaccurate and the closer to 38.71% inaccuracy you can get, the better.

 

No "right thinking person" would believe that a 1p error or even a 1 pound error would be anything other than of no relevance whatsoever.

 

reality check!

[emandcole]

No "right thinking person" would believe that a 1p error or even a 1 pound error would be anything other than of no relevance whatsoever.

 

reality check!

 

Agree in principle but given the fact that everything is computerised I can't see why these vast institutions regularly fail to get even the basics right. Using the same principle is de minimis more acceptable as a percentage or as an amount?

 

If I owed £4,000,000 in arrears on a 1 billion pound loan (I've got an airline for example ) and the default notice was 'only' 6% out that still represents £240,000, hardly loose change.

 

That to most minds should be considered as grossly inaccurate and the bank would need stringing up for such sloppy accounting but apply the same 6% error to a default value of 'only' £50 and because that's 'just' £3.00 out it doesn't matter?

 

I think given the fact that banks work to the nearest penny it's not asking too much for them to get it correct, 6% or otherwise.

[emandcole]

emandcole

 

do you have a link to where i can find the full judgement in the Woodchester case? thanks.

 

Sorry Ford I don't. Probably on the internet somewhere though!

[Guest]

cheers, will have a look. thought you might have had one to hand!

 

Do you et al think that the following would be regarded as 'de minimis'?

 

Missing statement as required by para 10a (effective 10/2008 ), schedule 2 of the 1983 regs. + Non compliance with para 5b of the regs.

 

thanks.

[emandcole]

cheers, will have a look. thought you might have had one to hand!

 

Do you et al think that the following would be regarded as 'de minimis'?

 

Missing statement as required by para 10a (effective 10/2008 ), schedule 2 of the 1983 regs. + Non compliance with para 5b of the regs.

 

thanks.

 

Can you detail those? Take it you're referring to the enforcement and notice regulations?

[welshperson3]

First things first how long were you given to make the default payment :idea:

 

Best to give the date of the default notice and then give the date they wanted you to pay by. If it doesn't specify a date but just says something like 'pay within X days of this notice' it's dodgy.

 

 

Could you possibly point me to any case law,or anyone on cag that has won on this point.

[welshperson3]

The DN format was checked out on CAG when I received it - nowt found wrong with it.

 

DN issued for £1,850 & which also contains unlawful charges of about £250

 

Not even 10% then, maybe 7% or so. Still, the amount is not a small one so I'd push home the fact that an innacurate default notice is a complete defense.

 

If they cannot get such amounts right you are being unfairly treated by the creditor. As for this tracing fee if that was applied to the original balance before the default was served and then subsequently withdrawn as they admitted the letters from you had been lost that should be enough to question the validity of the default.

 

Incorrect is invalid, guess it comes down to the judge on the day but I would definitely fight it on the grounds that their mistakes made it very difficult for you to provide remedy and the resultant litigation is vexatious.

 

Worth a shot anyway

 

In my opinion not worth a shot ,but it could be a expensive lesson for the same reason as below.

 

the Judges summery in the Rankine case.

 

57. The default notice is dated 2O December 2005. In my judgment, it cannot

invalidate a default notice if elements of the sums claimed in that notice are

subsequently found to be irrecoverable by virtue of other legislation, such as the

Unfair Terms in Consumer Contracts Regulations 1999. The obligation imposed

on the lender is to state the sums due on the face of the agreement. To impose any

other requirement would remove any certainty from the process, since it would

require lenders to anticipate and calculate, in advance, a Court’s likely view as to a

fair sum to levy in respect of default charges. This is a virtually impossible task

which Parliament cannot have intended that lenders would have to carry out when

issuing default notices.

58. In myjudgment, Mrs Rankine was deliberately seeking to be perverse and

untruthful in seeking to avoid a substantial debt despite having all the benefits of

equipment she expects the credit company to pay for on her behalf. Her behaviour

in Court was perverse, argumentative and obstructive.

59. ConclusIon

60. In myjudgment, the Claims by the Rankines do stand dismissed and theClaim by

TescoandcounterclaimbyllFCbeallo ed.

[cosalt]

I am confused, as far as I was aware any of the following will automatically invalidate a dn.

 

1. Failure to give a clear 14 days to remedy after service

2. Incorrect wording / wrong address

3. Remedy amount includes anything other than contractual payments ( default charges etc )

 

Is this correct or not ?

[Bigdebtor]

Cosalt

 

I thought the same. Other more knowledgeable CAGGERS please clarify?

 

BD

[Guest]

Can you detail those? Take it you're referring to the enforcement and notice regulations?

 

http://www.consumeractiongroup.co.uk/forum/show-post/post-2166205.html

[MandM]

emandcole

 

do you have a link to where i can find the full judgement in the Woodchester case? thanks.

 

Woodchester v Swayne & Co [1998] EWCA Civ 1209 (14 July 1998)

 

M

[diddydicky]

Could you possibly point me to any case law,or anyone on cag that has won on this point.

 

id say that was a pretty serious overstatement of the amount required to remedy the breach

 

each case will turn on its own merits i feel

[diddydicky]

I am confused, as far as I was aware any of the following will automatically invalidate a dn.

 

1. Failure to give a clear 14 days to remedy after service

2. Incorrect wording / wrong address

3. Remedy amount includes anything other than contractual payments ( default charges etc )

 

Is this correct or not ?

 

theoretically or in real life?

 

1/ should be but i would not put it past a numpty judge to call 1 day short de minimus- it has been done before

 

2/ depends on what wording - lack of underlining for example on its own would not necessily kill it

 

2a) minor mistake in the address would be de minimus (ie wrongly spelt street name- the problem with that argument is that you must have received the notice to be able to challenge it!! so the purpose was acheived

 

3/ as we were just discussing- it's all "accordin"

 

 

IMO

[Guest HeftyHippo]

An important point about the cost errors in the Woodchester case is not the size of the error, but the fact that the borrower would not have been able to calculate the correct amount easily.

 

The judge said

 

"THE APPELLANTS' CASE

 

Mr Hodgkinson submits that if that approach is adopted there can be no doubt about what was required to be contained in a default notice in a situation such as this if the default notice was to comply with the statute. It had to state with reasonable accuracy the sum of money which the hirer had to pay to remedy his breach. An error such as that with which we are concerned must render the notice ineffective. "

 

"Conclusion

This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If the hirer is said to have broken its terms, the hirer needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and the resources to give that information with precision."

 

 

"It is all very well to say that a hirer can seek advice on receipt of a notice but a hirer has very little time in which to do so. It may be as little as seven days. (See Section 88 (2)). He may not at first appreciate that the large sum set out in the notice is inaccurately calculated and plain wrong. It may be,

perhaps because of earlier defaults on his part or the incidence of interest, not at all easy to calculate what in fact is owing and the hirer may, thus, be misled into believing that the sum set out in the notice is right. He may even be frightened by that belief."

 

The lender should be able to calculate, as I have already said, quite easily, what sum is due whereas the ordinary hirer may not

 

 

I've missed some paras out, but the salient points are above

The borrower may not be able to determine if the arrears are correct

He may not be able to calculate easily the true arrears even if he is confident the arrears stated are wrong.

The lender is dealing with probably a standard (to him) contract, one drafted by him, so he will be familiar with its terms

The lender should be able to calculate the arrears precisely

 

He suggests that 'reasonable' accuracy should be required. IMO what is reasonable depends on if the error is being paid for by you or not. The inability or difficulty in calculating the arrears by the creditor means that the actual error may not have to be too big to render theDN invalid. Don't forget, if we go over our overdraft, or credit limit by £1, we're liable to bank charges, regardless of the overdraft or credit limit. If £1 is enough to form breach of contract and attract charges, it should be enough to render a DN invalid regardless of the %error involved.

 

As the judge said, the lender has the ability to calculate the arrears precisely. If the arrears don't have to be precisely calculated, it leaves the way open for any old sloppy calculation by the bank, and if the borrower cannot calculate it.... If we look at the Credit agreement situation, we can see that because they were assumed to be valid, and weren't challenged, the banks continued to churn them out with glaring errors. Same with bank charges. Before they were challenged they were £25 because that represented the cost of dealing with badly run accounts. Now, after all the fuss, they're £12...... did the cost of dealing with the accounts get cheaper, or were they ripping us off for years?

 

If DNs are allowed to be 'fairly accurate' how confident are we that they won't start becoming 'fairly accurate..ish'?

[welshperson3]

hi heftyhippo

 

If i pushed the point of a DN with the only problem on it being the wrong amount to rectify (few pounds out) then i would have to way up the risk to reward factor,

 

1 how much will it cost if i lose ? (a couple of grand)

2 what is my chance % of winning ? ( i think very low )

 

I'm not saying it is not possible to get a win out of this situation now and then but i think most times it will lose, so personally i would not try as the risk out ways the reward factor.

 

On any amount over the true arreas that can't be classed as a de minimus and is not made up of penalty charges then this is good.

Woodchester v Swayne & Co [1998] EWCA Civ 1209 (14 July 199:cool:

 

But if what they claim over the true arreas is made up of penalty charges then what the judge said in the Rankine case ended the argument on that point. (see post 1191)

 

Nothing is guaranteed when going to court. way up your chances of a win against the consequences of loosing and always remember that you can loose.

 

Two top barristers arguing in court one is going to be wrong

Edited February 2, 2010 by welshperson3

[Stagparty]

theoretically or in real life?

 

1/ should be but i would not put it past a numpty judge to call 1 day short de minimus- it has been done before

 

 

Would something as "basic" basic as ruling one day short, when the Act clearly states 14 days be grounds for appeal or would you be stuck with that judgement?

[frettful38]

Hopefully someone can see if this CCA and DN are valid, if not could point out anything they see not right. This debt is with Littlewoods and in March 09 was assigned to Cabot Financial UK and then assigned to Lowell Financial Ltd in May 09 by Littlewoods.

I am now being chased by Cabot for the debt. It is not a huge amount and have not complained to the FOS, as I believe they are more incompetent than the DCA's themselves. So would like to see what others advise. Here is the cca sent by Littlewoods and the DN.

 

Is this CCA correct?

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/LittlewoodsCCA.jpg

 

Is this DN correct?

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/LittlewoodsDN.jpg