Invalid Default Notices

[vint1954]

S98

[johnnybgood]

Hi all, been reading this thread with great interest..

if the creditor terminates the agreement on the strength of an invalid default notice, does the debtor then have to accept that the creditor terminated unlawfully?

also.. if the debtor fails to accept the unlawful termination can the creditor claim that the agreement endured? or would they have to also notify the debtor that the agreement is still live..

in other words if the debtor says nothing and the creditor says nothing.. when the creditor demands full payment..who wins? is it in the creditors interest to say nothing?

also if the debtor makes a payment after the agreement was unlawfully terminated.. does this then make it live? or would the debtor have to agree to making it live again

its all confusing lol..

 

Johnny

[Bigdebtor]

The Brandon case seems to let OC's totally off the hook regarding the "within 14 days" loophole. What if the debtor were to cry foul as soon as he got the DN and write back along these lines "you haven't given me the required time in which to seek leagal advice, get funds together etc. etc. I therefore accept your unlawful repudiation and only the lawful arrears - less damages are now due".

 

Would this count as accepting the agreement was terminated unlawfully?

 

One point the Judge in Brandon ignores is that where a debtor is given a very difficult - or impossible - deadline, then human nature is often to (admittedly wrongly) do nothing. Surely the law should take into account haow the manin the steet is likely to act when given an impossibly short deadline - especially if its shorter and less clear than the law states it should be?

 

OK Amex didn't actually terminate until well after the "14 days" (NB no actual date given on the DN by AMEX!) - but Mr Brandon wasn't to know they would actually give him more than 14 days in practice. Who is to say he might have been able to fix the default (or seek legal advice) in say, 3 weeks (not the actual 12 days allowed after postage delays) - but didn't know AMEX would actually give him that extra lee way.

 

Surely Amex should have made it totally clear - EXACTLY WHATthey would do next and WHEN - especially if this was they would terminate?

 

I thought the whole point of a DN was to make it CRYSTAL CLEAR to a lay person debtor exactly WHAT he/she had to do and BY WHEN. It just goes to show how the Judges bend over backwards to help the banks etc.

 

Also, to refuse to believe that any "experienced respected well known" organisation such as Amex:

 

- might even after 24 years not fully understand what needed to be in their documentation

- might not ensure it always complied with CCA 1974 etc.

- perhaps might even choose just ignore or try to circumvent the CCA 1974

 

is totally ludicrous.

 

These guys would only need to read some CAG posts for a few minutes to see how often their banking pals do foul up.

 

I found this judgement truly shocking - but then after the OFT foul up in SC last November I don't know why I'm still shockable!

 

l really do hope these banks get their come uppance soon in Glasgow Sheriff Court ( Sharp v BOS) and the Santander case. (BTW the Santander re-issued DN debacle above just gives a lie to the Judge's assumptions re Amex etc.).

 

The way they twist and manipulate what were supposed to be water tight rules designed and intended to protect Joe Public is despicable. In all CCA-related cases the burden of proof should be with the OC and any benefit of doubt should go to the debtor. I'm sure that is what the CCA authors intended to happen.

 

BD

Edited September 7, 2010 by Bigdebtor

[johnnybgood]

Consumer Credit Act 1974;

 

An Act to establish for the protection of consumers a new system, administered by the Director General of Fair Trading, of licensing and other control of traders concerned with the provision of credit, or the supply of goods on hire or hire-purchase, and their transactions, in place of the present enactments regulating moneylenders, pawnbrokers and hire-purchase traders and their transactions; and for related matters.

[31st July 1974]

 

the Act was made to protect the consumer..therefore the consumers protection is paramount, yet when the consumer seeks protection by the act.. he is denied..

 

what if..

 

when the creditor is chasing a debt and the debtor denies owing it.. the judge can rule on the balance of probabilities in favour of the creditor..

but what if the debtor claims to have paid the debt in full?

would the judge then use the balance of probabilities and rule in the debtors favour? NO I dont think so

the debtor would have to prove that he paid the debt..

therefore the creditor should have to prove that the debt is legaly owed.. and judgement should not be based on the balance of probabilities..

 

now I think I probably have a head ache..

 

 

Johnny

[Bigdebtor]

Some very good points there Johnny. Enjoy your well-deserved headache!

 

Bd

[Guest HeftyHippo]

Look near the top of the page ... Click on it and voila.

 

wonderful, thanks (but how it got like that in the first place I dont know)

 

Pumpty, that letter from Santander is priceless. However, you can see their point. If they buy back the account, they buy the rights to it etc, so if they issue a DN, they can pursue again, or sell it..... except they seemed to skip over the bit where they admit before they sell the account they have to issue a DN.... if the solution was as simple as what they claim, why did the buyer not simply issue a DN rather than selling it back?

 

I daresay you have asked for a copy of the new agrement that you signed up to? lol

 

Other relevant things to this argument:

someone mentioned a claim that they cannot close the agrement and then claim it still exists. Well, I have an account,either Amex or Egg (maybe both) where they DO claim just that. To paraphase, "we can end this agreement at any time by giving 7 days notice in writing, if we do so, the agreement (or maybe the Terms I cannot remember) will remain in force" In other words, "we can end the agrement when we want, but if we do, it will continue."

[diddydicky]

I would like to know why the threads occupy only one third of my monitor width......... total waste which makes a post hard to follow.

 

DD, you're always a pessimist.

 

Yes, as I say, in general, it is best to accept a repudiation. However, not doing so will not always harm your case because banks rarely reopen accounts after closing them, often don't even say they have closed them, and you have ignorance of the fact of repudiation on your side

 

If a bank wishes to issue a second DN to an account it has closed, it would have to clarify what status the account (agreement) had inbetween the 'termination' and 2nd DN. ie, were normal facilities available to the customer? If not, how could the account be open? etc. closing and account is not the same as terminating the agreement- thus if it simply closed the account (prevented further use0 that would comply with terms in the agreement. If it 9attempted to) terminated the account unlawfully in some way- for instance by way of a defective DN or demand for payment- or a letter of termination which was in some way unlawful- then unless the debtor has accepted that unlawful act- then the agreement is NOT terminated (just because the creditor SAYS it is terminated is of no effect if his action is unlawfu- since an agreement can only be unlawfully terminated by mutual consentl) then the creditor can issue a second effective DN and does NOT need to explain the status of the account to anyone- since if the debtor did not accept the creditors "attempt" to unlawfully terminate- then the unlawful termination is not effective and the status quo remains

 

 

In terms of restricting credit, few agreements specify how they calculate the credit limit. Most say they will decide a credit limit and inform you. It is not incompatible with that for their 'black box' to decide to reduce your credit limit. However, having offered a credit facility, removing the benefits of that facility in terms of not allowing borrowing is disingenuous in the least! as far as i am aware EVERY credit card has a term allowing the creditor to prevent further use or to restrict or reduce the amount of credit available - and further this would seem to be a most sensible precaution to prevent a borrower who is unable to repay what he has already borrowed- from excaerbating the situation!

 

I'm not quite sure what you mean that its ok for the bank to lend money initially but can then refuse further credit. To require credits whilst refusing to allow debits, converts a credit card account into a loan - which is definateoly not what I signed up for. To remove running credit and turn it into a repayment only facility would seem itself to be a repudiation. If I have £1000 credit facility, I expect to be able to use all of that limit. If I pay in £300 I expect to be able to spend £3000. I certainly did not sign up for an account where the bank, at any time, could prevent me from using the very key facility of a credit card account - to be able to use it up to my credit limit when I wish. see the comments above- your proposition that you have a set limit £1000 in this case- and that after using say £300 and then being unable to make the repayments- or the creditor obtains information that you have defaulted on payments to other creditors- and decides to reduce or prevent further use of the card is somehow "unfair" is a nonsence

 

the creditor is entitled to protect his assets- and allowing you to keep borrowing- when you have demonstrated an inability to meet repayments on existing commitments would be foolish

 

In terms of closing the account completely, and ending the agreement however, a credit card account, as has been mentioned on here, is not only about borrowing money. The card can be used to reserve something eg hotel room via phone or internet, and the actual purchase can be made by other means. Money can also be paid into a credit card account so the account is in credit, thus allowing transactions via card without needing credit - eg travelling abroad (yes, a minority occupation perhaps, but possible definitely, and therefore a benefit of having the account). That's particularly useful when travelling through places for short spells as it avoids repeatedly changing money, and provides security. Indeed, there are now pre-payment cards designed just for that reason.

 

pessimist? nothing could be further from the truth HOWEVER, many folk on this (and other) forums get themselves into "perry mason" mode and if they are not brought back down to earth with what i like to think is sensible and practical advice as to what will happen in reality- rather than in "theory" - they can find themselves even further in the doo doo than when they first started

 

as ever my advice is given honestly and freely-judge it against other conflicting advice take it or not as you please- sometimes i will be right and some times i will be wrong

Edited September 8, 2010 by diddydicky

[Guest HeftyHippo]

DD, you're preaching to the converted as far as closing the account and ending the agreement not being the same. I have made that point several times on here.

 

In terms of being in Perry Mason mode, yes there is the odd time that not accepting repudiation of an agreement may be harmful, but in may cases it will not, simply because we are laymen and we believe what professional banks say with their professional advisers and lawyers say. After all, if they say the agreement (not account) is ended (which is what most if not all of them say), then they must be right. And if the agreement stays in force until we accept the ending (which is the correct position in law) then why doesn't the bank provide banking or credit facilities? That's an obvious sign, to the layman that its all gone. To believe otherwise WOULD need us to be in Perry Mason mode.

[the_shadow]

Hi,

IMHO, in the brandon case, I suspect that the account was a rolling contract (charge card) or one that requires the "debtor" to pay an annual membership fee. Non-payment of same would result in the immediate closure of the account in the T & C's. Therefore, a notice under sec 76 or/and 98 would not be "earlier payment" and the account would be of "fixed duration" (1 Year) because it would be "renewed on every annual anniversary of account opening" and only upon payment of the membership fee. This is just a guess and somewhat moot anyway.

 

Nope afraid not... in the first paragraphs of the judgement the judge states he was surprised to find American Express offer a card that DOESNT have to be paid off each month in full, thus a credit card.

 

S.

[Bigdebtor]

I have read this thread right through in the past (honest!) and got some things clarified a few months ago. I've now got a further query - which I'm sure will have been answered in the past - but the thread's now too big to find it - so I'll ask again:

 

I know if I get a DN which demands arrears paid "wihin 14 days of this notice" (no specifed date and no time given for postage delays etc.) then it is non compliant - and I know the OC can rectify it by sending out a compliant DN at any subsequent time before the agreement is terminated.

 

1. However, what I don't know is - CAN I UNLATERALLY TERMINATE THE AGREEMENT MYSELF AS THEY HAVE NOT GIVEN ME THE TIME SPECIFIED IN CCA 1974 (and subsequent amendments) - or MUST I WAIT AND HOPE THE OC WILL TERMINATE on th e back of a dodgy DN - and then accept his "unlawful rescission"?

2. If I can terminate unilaterally on getting a dodgy DN (as I have not been given a clear 14 days - or a specified date by which payment must be made) then what if demand to me to pay all of the arrears "within 14 days of this letter" is not headed up and laid out like a formal DN - does it also count as a non compliant DN - or is it just a letter? Could I terminate on the back of this letter too?

 

BD

[Guest HeftyHippo]

No you can't terminate because a defective notice has been served. The CCA gives them the right to issue a DN and then terminate. Your rights if they terminate without a correct DN arises from contract law, not the CCA

 

You do have the right to terminate at any time by paying back what you owe and telling them to close the account.

[Bigdebtor]

HH - Thanks for the prompt response.

 

I'll just have to hope they do now issue a TN on the back of the dodgy (or non existent) DN. However given all the publicity - and free advice in threads such as this - I'm amazed these massive organisations are still getting their DN's wrong. I really do hope I'll get TN's soon - but I'll not hold my breath - just hold my wallet tightly shut and see if they follow through!

 

Thanks again - I tried to tip your scales - or hit your star or whatever the current jargon on the new site is - but it wouldn't let me put in a reason and bounced it - will try later.

 

BD

[mystery1]

You have to read the whole dn.

 

If it says they might terminate then you have to wait. If it says they WILL terminate you can take them at face value.

 

Norwich and Peterborough BS v Steed [1992] EWCA Civ 5 (05 March 1992)

 

"Secondly, a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect."

 

 

Saunders v Anglia Building Soc (sub nom Gallie v Lee) [1970] UKHL 5 (09 November 1970)

 

"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".

 

M1

[Bigdebtor]

Good point M!

 

But the exact wording used in the DN is:

If the payment required is not received by us before the date

shown we shall become entitled to demand payment of the whole

outstanding balance on your account. We may take legal proceedlngs

against you for the recovery of this balance

Not sure if the "we shall" counts as a "will" or a "may"? I suppose just being entitled doesn't mean they "will"

 

On the other hand they are wrong - because they are NOT "entitled" to demand the full balance (i.e. terminate) - since the DN was non complaint - so that's misleading the debtor - which must be wrong? Doe sthat make the whole thing non enforceable then?

 

Also - despite what they say (as quoted) they DON'T show a date - just state payment must be made "within 14 days" and they don't say within 14 days of what (letter being written, posted, served, read etc.)

 

How does this stack up - as a "will" or a "may".

 

How about if I were to send them a letter on day 14 stating "I realise you stated in your letter of XX Sept that with effect from xx+14 Sept you are now entitled to the full balance - but I can't afford to pay it from my own resources. Please clarify your position on this so I can seek appropriate advice - or investigate how I might otherwise be able to raise the amount now due to you".

 

If they come back with the response - you must pay the full balance by XX Sept - then surely that's a TN?

 

If they come back - pay £xx per month from now on then that's the agreement enduring?

 

And to think I used to think I was geeting to really understand this dodgy DN business!

 

BD

[emandcole]

I think trying to second guess the intentions of the creditor is dangerous ground. Who knows which way the court will also lean and added to this you may alert the fault to the creditor before termination and they just issue a valid DN.

 

Wherever such notice is unclear as to the intention of the creditor attacking it exposes you to risk so I feel you would be better to hope that termination follows, at that point you are safe to accept the repudiation and ask for an accurate arrears balance.

[Guest HeftyHippo]

You CANNOT take action that results in you terminating the agreement on an expectation that the other party will, or may, repudiate the agreement. That is an anticipatory repudiation on your part. Even if they say they WILL end the agreement, it is not safe.

 

You do not know what the other party will do. They may for example, issue a second, correct, Default Notice, or at least, they may intend to do so until you tell them you consider the agreement ended. If YOU end the agreement like that, they are entitled to ask for full repayment immediately - that's one of the terms of the agreement - you can end it at any time but must pay back everything. Furthermore, if you take action, you remove the consequences of their non-compliance with the cca in respect of the defective DN.

 

Reading their words, they haven't committed themselves to any course of action, simply alerted you to the possibilities.

 

As for the stuff about being held to what you write, yes, valid in some circumstances, but not always. Just because they say they will do something doesn't mean they will. They could have a change in policy, come up with other ideas that benefit you better, become aware of your circumstances and decide that their stated action would be unfair to you etc. The fact is, it doesn't matter what they say they will do, it is actually what they do. Saying they will close the account does not remove your banking facilities, actualy closing the account does. It is the latter that is repudiation, not the former

 

Don't make the same mistakes that the banks do by jumping before you look. Make sure. Wait for them to repudiate, and then be prepared for lots of arguments some time after you accept it. If you want to speed it up, or ensure it happens, don't pay anything to them from now on. If the issue a DN, it is only a matter of time before the end it, so be patient. Keep quiet and they will almost certainly not know what theyre doing - automated systems and all that. Everyone thinks that the computer takes care of everything, but when its been programmed wrong, it can't! That seems to be the bit they dont understand

 

If you attempt to clarify their intentions in the way you suggest, they will more than likely invite you to suggest a payment plan. Entering discussions about that and actually agreeing one, may ( more than likely will) be considered to be a withdrawal of the DN.They will then be at liberty to issue another at a later date.

[Bigdebtor]

HH

 

I see where you're coming from. I'll do nothing till they (hopefully) issue a TN on the back of teh dodgy DN.

 

Thanks again.

 

BD

 

PS - managed to tip your scales this time!

[Undercover-Elsa]

Might be best if you could scan, depersonalise and post up this DN for assessment, Big Debtor.

 

Elsa

[Bigdebtor]

Elsa

 

It's OK. I KNOW it's non complaint - I was just wanting to hurry the OC along to the next step - a TN - but I'll take advice and wait, hoping thir automated system will work and the TN will come out soon.

 

Thanks anyway.

 

BD

[DontPushMe]

Bigdebtor was wondering if he had the right to terminate the agreement and I suddenly remembered reading something about a paragraph that had to be inserted in a DN to make it compliant. The missing paragraph under Reg 33 of the Consumer Credit (Information Requirements and Duration of Licences Charges) Regulations 2007 was “You have the right to end this agreement at any time..." Is this paragraph required?

BTW anybody having difficulty logging in? I found that the normal log in at the top of the screen doesn't work properly. I'm using IE7. I have to force a log in request by clicking on "Reply".

DPM

[Dotty50]

BTW anybody having difficulty logging in? I found that the normal log in at the top of the screen doesn't work properly. I'm using IE7. I have to force a log in request by clicking on "Reply".

DPM

 

Yes i have at work on IE and have to go to the library where there is another login access which works fine, it's only happened in the last week, it worked ok before.

[Guest HeftyHippo]

HH

 

PS - managed to tip your scales this time!

Thanks, but I don't worry about that. Be patient, they will issue a TN fairly soon. But that won't be the end of it. The arguments will start afresh when you try to point out the legal position.

[DontPushMe]

Exactly BD. When the arguments start it helps to prove their DN is faulty in more than one regard viz: date doesn't give the debtor enough time to remedy the breach, amounts requested wrong, demanding the full amount, demanding the wrong amount, text not displayed correctly and missing information like the heading "This DN is issued under 87 (1)" or whatever, name and addresses not displayed and the missing para about having the right to terminate. I don't know where I originally saw that bit amount having the right to terminate but my DNs don't have that para. If it's a mandatory piece of text and it's missing then it gives me and a lot of other people something else to try and enforce the CCA. Which is what we're trying to do here - not avoid paying but make sure that debtors are handled fairly under the protection of the law.

 

DPM

[Bigdebtor]

Thanks for all your input guys - now a lot clearer. I'll keep you posted if the OC now issues a TN on the back of a dodgy DN.

 

I'm not at all worried about the fight being long or hard. I've fought many fights so far and not lost yet.

 

Thanks again

 

BD

Edited September 10, 2010 by Bigdebtor

[diddydicky]

QUOTE :- And if the agreement stays in force until we accept the ending (which is the correct position in law) then why doesn't the bank provide banking or credit facilities? That's an obvious sign, to the layman that its all gone. To believe otherwise WOULD need us to be in Perry Mason mode.

 

Tha'ts the point i was making-- the bank close the account to new transactions- i suspect that the "chap on the clapham omnibus" or the "right thinking person" would realise that although an account has been "closed" to further use by the debtor- and no further facilities were being provided - that the debt already incurred - still has to be repaid

 

whats more pertinent is that this is what the judge will think!!

Edited September 12, 2010 by diddydicky