Invalid Default Notices

[lord_tiger_putin]

This is what I done. I received a faulty DN from Vanquis. Prior to the DN Vanquis demanded payment in full. After issuing the DN Vanquis passed on my account to 1st Credit who demanded payment in full. I then wrote back to Vanquis and pointed out that the DN was faulty and that they had terminated my agreement on the back of this faulty DN, and I accepted their unlawful rescission.

Thanks, I think I will go that way, they will anyone be daft to turn up in court without an enforceable agreement.

I will get the TN's off to them and then the unlawful rescission. When you send the unlawful rescission, what does it actually implies? Do they have to stop recording your info in CRA’s, stop asking payments, etc.? I know they are ignoring the implications but it will be good to know and use at a later stage.

[lord_tiger_putin]

Sorry about all the questions but it seems that the answer is available in abundance now!

 

Can I send the TN and unlawful rescission letter together?

[middenmess]

Hi Frettful

 

Lowell's letter is a bit odd..

 

 

If they've bought the outstanding balance why would they say that Vanquis have asked them to 'get in touch'?

 

Vanquis have sold the debt on and in their minds have washed their hands of it so they couldn't give a fig what Lowells do or don't do with it

[frettful38]

Hi mm,

 

probably just a scare tactic trying to get me to pay i guess. Or they ain't got a clue what they are doing which I am not surprised.

[middenmess]

Think I'd go with the ''ain't got a clue'' option:)

[Lord_Alcohol]

Hi again beyondhope

 

A few points to add to Elsa's analysis...

 

The defendant will say that rule 626 of the CPR does not apply, as the CPR apply only to the service of legal documentation, and then only in relation to a civil claim, which had been issued in accordance with the CPR rules.

 

Surely a DN is a legal document - it is served under s87(1) of the 1974 Act. And it is in relation to a civil claim.

 

The notice of default was not issued in accordance with the CPR, and was in fact served in accordance with ss87-89 of the consumer credit act Therefore the claimants claim that the DN has not been correctly served in accordance with rule 6.26 is dismissed as entirely irrelevant

 

Well, as CCA does not concern itself with service of documents, other than prescribing the timescale, how else can service be deemed to have taken place if not by reference to CPR?

 

Also, why does the defendant keep referring to a "notice of default" when the item under discussion is a "default notice"?

 

In any case should rule 6.26 of CPR apply, the same states that a document is deemed served the second day after it was posted, left with, delivered to or collected by the relevant service provider provided that day is a business day, or if not, the day after that

 

The defendant will therefore say that rules 6.26 of CPR does not specify two business days, it merely states 'on the second day of posting, provided that day is a business day.'

 

Well, that still doesn't provide for delivery on the following Monday! The second day of posting is a Sunday...

 

In any case, the defendant's position is based on 1st class mail. Do we know that this is the case?

 

Consequently, as the notice of default was served January 15th 2010, the same being a friday, in the ordinary course of post the same would be deemed to have been delivered on the second day after posting.

 

The "notice of default" was not served on January 15th. It was dated January 15th. Service was sometime much later.

 

However, as the second day after posting was a sunday, and was therefore not a business day, the official date of posting was January 18th 2010, the same being the following monday.

 

OK, so now they are saying they posted it on 18th, and not 15th! So service should have been on the Thursday (21st).

 

The claimant claims that the notice of termination was issued february 1st 2010, the defendant will refer to the attached notice of termination, which clearly states that the same was issued on 2nd february 2010 The claimant is asked for an explanation as to why the facts relating to this document have been misstated.

 

I would suggest that the first TN applies - an OC cannot go around issuing important legal documents willynilly. As the 1st TN applies, then there has clearly been insufficient time given to remedy.

 

The defendant notes the claimants allegation that the 14 day period had to be specified in date format, and that merely specifying 14 days is allegedly insufficient.

 

The opening words of the DN refer to the date of service of the DN. The intention of the instruction is given in s88 CCA is to advise as to when the period allowed for remedying the default has expired, ie after, or not less than, 14 days.

 

The defendant will say that by specifying a 14 day period in which the claimant is to remedy the default, the defendant has complied with s88 CCA in full.

 

I would suggest that the intention of the instruction in CCA is to clearly state a date by which the breach should be remedied.

 

The 1983 Consumer Credit (Enforcement, Default and Termination Notices) Regulations, at Schedule 2, para 3©, state;

 

if the breach is capable of remedy, what action is required to remedy it and the date, being a date [not less than fourteen days] after the date of service of the notice, before which that action is to be taken;

 

Which even to me seems pretty clear. The regs do not state a period of 14 days; they state that a date is to be specified.

 

The defendant will say that the dates specified on the DN allow no room for error The claimant can have been in no doubt as to the required action, and the time limit within which to carry out the required action

 

Only full compliance with CCA removes the "room for error".

 

the claimant failed to make any offer of payment, or indeed payment of any sort under the agreement and did not attempt to contact the defendant to discuss any offer of payment.

 

The DN did not state that this was an option.

 

Anyway, hope some of this might be useful.

 

LA

[DebtDissolver]

Could you advise on this for me please? Looking at it on behalf of a friend!

 

Default Notice:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102316.jpg

 

Accompanying letter:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102315.jpg

 

ENVELOPE:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102314.jpg

 

Many thanks!

[Undercover-Elsa]

Sorry about all the questions but it seems that the answer is available in abundance now!

 

Can I send the TN and unlawful rescission letter together?

 

Hi Tiger,

If you mean termination notice and ur, they are one and the same thing, surely?

 

Its not the rescission that's unlawful, btw, it's their termination/demanding full balance without issuing a valid DN which is unlawful, and constitutes repudiatory breach of agreement. By your acceptance of this breach you yourself rescind the agreement (as is your right).

In other words..your rescission is lawful, it's their termination/demanding sums not yet legally due that's unlawful.

 

Elsa x

[cab1ne]

Hi Tiger,

If you mean termination notice and ur, they are one and the same thing, surely?

 

Its not the rescission that's unlawful, btw, it's their termination/demanding full balance without issuing a valid DN which is unlawful, and constitutes repudiatory breach of agreement. By your acceptance of this breach you yourself rescind the agreement (as is your right).

In other words..your rescission is lawful, it's their termination/demanding sums not yet legally due that's unlawful.

 

Elsa x

 

nicely "put"

 

the termination is just the "ICING ON THE CAKE":p

 

cab

[Undercover-Elsa]

Could you advise on this for me please? Looking at it on behalf of a friend!

 

Default Notice:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102316.jpg

 

Accompanying letter:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102315.jpg

 

ENVELOPE:

http://i266.photobucket.com/albums/ii263/bethsweddingstationery/160720102314.jpg

 

Many thanks!

 

hi DebtDissolver,

Same issues as we're discussing at the moment..

a date should be given

they haven't allowed time for service

the format is incorrect. There is no prominence given to important text, such as This is a Default Notice served under Section 87 (1)..etc

various other texts should be underlined / bold.

 

He should keep quiet about it till they terminate/demand full amount/sue

However it's not a get out of jail free card..they will argue the points, as seen earlier in this thread, so watch this space as it's an evolving scenario as we unpick their arguments.

Elsa x

[lord_tiger_putin]

Thanks Elsa

 

I thought you must first accept their termination and the agreement will then officially terminates. Then you can claim UR.

[DebtDissolver]

Thanks Elsa! That's what I was hoping to hear! As the arrears are the full amount (whole lot due under contract terms) we will wait for termination notice, then send the ur letter if applicable. Although I worry that the argument won't stand up as the amount was due in full on a certain date anyway, and that by not paying it, my friend is the one who essentially terminated the agreement? Hope that makes sense!!

 

Hilariously, the letter included a copy of the OFTs guide to default notices. Nothing on there mentioned that they might not be issued properly. It's nice to see the OFT on the side of creditors not consumers, isn't it?!

[Undercover-Elsa]

In my personal view, only one letter needed:

Your recent termination of / demanding sums not yet due under the above agreement, without issuing a valid Default Notice, constitutes repudiatory breach of agreement. As is my right in Common Law, I have elected to accept this termination/repudiation.

Take notice that the agreement is therefore rescinded and only genuine arrears to the point of breach are due and payable. Against this would be a counterclaim for damages.

 

Or similar..it's not written in stone, others have their own phraseology

 

Elsa x

Edited July 16, 2010 by Undercover-Elsa

[Undercover-Elsa]

Thanks Elsa! That's what I was hoping to hear! As the arrears are the full amount (whole lot due under contract terms) we will wait for termination notice, then send the ur letter if applicable. Although I worry that the argument won't stand up as the amount was due in full on a certain date anyway, and that by not paying it, my friend is the one who essentially terminated the agreement? Hope that makes sense!!

 

Hilariously, the letter included a copy of the OFTs guide to default notices. Nothing on there mentioned that they might not be issued properly. It's nice to see the OFT on the side of creditors not consumers, isn't it?!

 

Ahh this is something that Et Contra Pacem Regis tried to throw into the argument, saying that not paying was "anticipatory breach", which is wrong. If that was the case the Creditor would be able to dispense with DNs and sue after one missed payment!

 

Elsa x

[lord_tiger_putin]

In my personal view, only one letter needed:

Your recent termination of / demanding sums not yet due under the above agreement, without issuing a valid Default Notice, constitutes repudiatory breach of agreement. As is my right in Common Law, I have elected to accept this termination/repudiation.

Take notice that the agreement is therefore rescinded and only genuine arrears to the point of breach are due and payable. Against this would be a counterclaim for damages.

Thanks for that because I thought that they could ask for the arrears up to the point when the agreement terminates, i.e. when you accepted it. But by saying the above they can only ask arrears due on the date they terminate or ask the full amount, which could be a significant difference because I only became aware of this long after some of my agreements were terminated.

[diddydicky]

...AND served on the ''day after service''..Thus being the Wednesday

 

m2ae;-)

 

the date of service is "deemed" to be the second working day after posting ( not the day after the second day ) for first class and the fourth day after posting for second class.

 

in the ABSENCE of proof that it was posted first class (sworn statement) it is deemed to have been sent second class (thus not a good idea to alert the creditor before the trial that he will need a sworn statement as to posting)

 

the TIME for remedy (at least fourteen days) starts from the day AFTER the date of service

 

so a notice posted on Friday (assuming no bank holidays) first class will be deemed to have been served on the following Tuesday , and if sent second class will be deemed to have been served on the Thursday,

 

Thus the 14 days will start on the wednesday.(first class) or Friday (2nd Class)

 

a notice that states that you should remedy the default BEFORE the date specified is actually giving you until close of play the day before the date specified in which to remedy .

 

a notice that state you should comply "WITHIN" XX days (whilst itself strictly speaking "not a date" for the purposes of the act would , nevertheless INCLUDE up to the close of play on the date calculated to be the 14th day (or whatever the DN said)

 

There is nothing in the act which requires the creditor to prove at what time on the day of posting- that the default notice was posted..... therefore the argument that it "might have" been posted too late on the day - for that day to count as the day of posting (without proof) would (IMO) fall on deaf ears in the courtroom.

 

 

the argument is ongoing as to whether the expression "within XX days" is a date and i agree with undercover elsa that this is not compliant- and in reference to 14 days will be a good chance of being invalid

 

the argument put forward by lenders that if they allow 21 or 28 days- then it would be "obviously" allowing sufficient time to the debtor- is rather more difficult to argue against

 

the proposition as put forward by one creditor- that they did not in any event terminate for several months afterwards- and therefore the debtor had plenty of time to remedy the default is patent nonsense- since at the time of serving the DN the creditor did not supply the debtor with a crystal ball!!

 

Further, the debtor was entitled to take the creditor at his word that after the time expired he would terminate

 

the debtor who then "throws in the towel" and says to himself- no way can i remedy within that timescale- cannot be expected thereafter - upon not being notified of the termination ...to start a debate with himself as to whether he should now seek to remedy the default- since a/ he has no way of knowing when termination may come and b/ he is entitled to assume his failure to remedy the default has resulted in adverse references on his CRA files and therefore the act of remedying the default would not achieve the aims of s89 (to restore the position to that as though the default had never occurred) - since was his CRA files were adversley marked- any number of lenders could have read them.

 

IMO it would be better for a debtor to wait only a week or two at the most AFTER the expiry of the time limit in the DN to see if a termination/demand for payment in full arrives and if not- to then write and accept the DN itself as the termination- thus denying the creditor the opportunity- some weeks or months later- to say that the debtor had lots more time to remedy.

 

The DN is a statutory document in which the creditor is obliged to make clear to the debtor the consequences of his failure to remedy the alleged default, therefore IMO the use of the word "May" rather than "will" is of no salvation to the creditor

 

the intent and purpose of the DN is prescribed and simple

 

1/ remedy the default within the stipulated time frame and if you do so then it will be as if the breach had never occurred (return to the status quo)

 

or

 

2/ Fail to comply and the creditor will take the action which the law as decreed he must specify in the default notice- your failure having entitled him to claim entitlement to the benefits of s87 (assuming of course that the DN is a valid DN) if not then

 

3/ he has unlawfully given you advance notice of his intention - on or after the date specified in the notice - that he intends to terminate/demand payment in full of sums not yet due- he therefore- at or after that specified date then unlawfully repudiates

 

 

It matters not if he has not carried out the threat when you accept his unlawful repudiation (IMO) once that date is arrived at- since the act makes it clear that the action he INTENDS to take is spelt out clearly in the DN

 

A man- being a man of prudence and ordinary education- cannot escape the consequences of his actions therefore if the creditor had no intention of doing what he said in that statutory document- then he ought not to have said so

Edited July 16, 2010 by diddydicky

[diddydicky]

Thanks for that because I thought that they could ask for the arrears up to the point when the agreement terminates, i.e. when you accepted it. But by saying the above they can only ask arrears due on the date they terminate or ask the full amount, which could be a significant difference because I only became aware of this long after some of my agreements were terminated.

 

sorry to nit pick- but i think it would be inadvisable to write and accept an unlawful repudiation and say that you have "rescinded" the agreement.

 

much better to state that as a result of their unlawful repudiation- you have exercised the right to" relieve yourself of any continuing obligations under the agreement"

 

IMO you have no more right to rescind the agreement than the creditor has

 

technically the agreement is not terminated- rather it has "come to and end" by virtue of the fact that neither party is now willing to fulfil its obligations

 

if it were terminated by your declaration that it was rescinded- then bang goes your counterclaim.

[GeoffreyAlby]

Does anyone have any more news on the Amex v Brandon case? Has it gone to the Court of Appeal? It would appear that lots of DCAs are getting on the band wagon and using this case as a steamroller through any arguments of short dated DNs.

[Lord_Alcohol]

IMO it would be better for a debtor to wait only a week or two at the most AFTER the expiry of the time limit in the DN to see if a termination/demand for payment in full arrives and if not- to then write and accept the DN itself as the termination- thus denying the creditor the opportunity- some weeks or months later- to say that the debtor had lots more time to remedy.

 

Hi DD

 

I think your post was top notch, apart from the bit above...!

 

If the debtor treats an expired DN as the means to end the contract without waiting for a TN or a demand for the balance (or other clear indication of repudiation), the OC may simply issue a compliant DN - his argument being that the contract was still 'running' (ie, the OC hadn't yet sent a TN or demanded the balance). So it could backfire disastrously if the debtor did in fact do this.

 

It would be much safer to try and determine if the agreement is actually repudiated somehow, although I'm not sure how you would do that without something from the OC.

 

LA

[diddydicky]

Hi DD

 

I think your post was top notch, apart from the bit above...!

 

If the debtor treats an expired DN as the means to end the contract without waiting for a TN or a demand for the balance (or other clear indication of repudiation), the OC may simply issue a compliant DN - his argument being that the contract was still 'running' (ie, the OC hadn't yet sent a TN or demanded the balance). So it could backfire disastrously if the debtor did in fact do this.

 

It would be much safer to try and determine if the agreement is actually repudiated somehow, although I'm not sure how you would do that without something from the OC.

 

LA

 

 

 

we differ on that one then!

 

my opinion is that the creditor is bound by his words- it is a statutory document and if he states in it that the contract will be terminated/demand for the full outstanding balance will be made if the debtor fails to comply by the stated date- then that is to be taken at face value

 

the DN is not a threatening letter or a debt collection tool- it is a statement of fact made by the creditor in prescribed form as to what will happen in the event that the debtor does or does not comply

 

it is the "last stage" AFTER all the threats and debt collection activity have taken place

 

the fact that the termination/demand for full balance is made 14 days (or whatever) in advance is no less a termination/demand for full payment

 

the danger in doing nothing- after a week or two- is that you leave the door open for the creditor to do exactly what you say- re issue the DN

[Lord_Alcohol]

we differ on that one then!

 

my opinion is that the creditor is bound by his words- it is a statutory document and if he states in it that the contract will be terminated/demand for the full outstanding balance will be made if the debtor fails to comply by the stated date- then that is to be taken at face value

 

the DN is not a threatening letter or a debt collection tool- it is a statement of fact made by the creditor in prescribed form as to what will happen in the event that the debtor does or does not comply

 

it is the "last stage" AFTER all the threats and debt collection activity have taken place

 

the fact that the termination/demand for full balance is made 14 days (or whatever) in advance is no less a termination/demand for full payment

 

the danger in doing nothing- after a week or two- is that you leave the door open for the creditor to do exactly what you say- re issue the DN

 

Sure, but only the last stage before collection activity for the full amount.

 

Yes, I agree, there is danger in doing nothing but I do currently think that the debtor has to take this risk and await his opportunity. I may be completely wrong - things are a bit hazy after my extended lunch - but looking at a DN it is only really a demand for the arrears combined with a threat of action which may take place if the remedy is not actioned.

 

Your plan requires the debtor to assume that the contract is repudiated, but I would not take that risk - I would wait for firm evidence that that is in fact the case.

 

I really do agree with almost everything you say DD - just not so sure about this one item

 

LA

[nks22]

if he states in it that the contract will be terminated/demand for the full outstanding balance will be made if the debtor fails to comply by the stated date- then that is to be taken at face value

 

Don't DNs invariable warn of action that "may be taken"?

[Its WAR]

My ongoing saga.

1. Halifax asked for substantial monthly payments into my account or they would withdraw my overdraft facility and it would become unauthorised.

2. I offered £1000 a month and asked if that would be sufficient.

3. Halifax ignored my three offer letters.

4. Halifax withdrew facility.

5. Halifax issued DN allowing me to remedy the breach and for me to pay off my overdraft by 27 July. If I did so, they would take no further action.

6. On 12 July they terminate my credit agreement, saying it was because I "had failed to make the neccessary payment by the date shown in the notice". The date is still 2 weeks off ??????

 

I guess that my credit file will now be reported as having Defaulted despite Halifax advising me in the DN that I had two more weeks to make the payment.

 

I wish to avoid the Default being registered on my credit file and intended to clear the overdraft within the time they allowed, but now I wonder if they have been a bit hasty, or whether I am too late to remedy. What should I do?

 

My main concern is avoiding the default. I am not interested in avoiding the debt (only avoiding the £5 a day charging regime) I can pay it off easily enough at the end of the month as they have prescribed. But will not want to do so, unless it avoids the Default being reported to my credit file.

 

Having paid it off, I will want to make a nuiscence of myself and issue a summons and complaint to FOS, I dont want to go away quietly.

 

What should I do now, before 27th July?

 

Also, the account is a joint account. Should my report to FOS (costing Halifax £450?) be a joint report, or should my wife make her own complaint, and if so, will Halifax get fined twice?

Edited July 16, 2010 by Its WAR

[diddydicky]

Don't DNs invariable warn of action that "may be taken"?

 

a creditor says he "Will" take action or "may" take action

 

in this instance "may" signifies that the act give him "permission|" once the deadline has expired- to take the specified action...hence it has the same meaning as will

 

the act requires that the default notice leaves the debtor "in do doubt" as to the consequences of non compliance - hence the action outlined for non compliance is not a "threat" it is the action the creditor WILL take after non compliance

 

The proposition that the outcome that will occur if the debtor complies is as laid down by the act (s89)- but that the outcome for non compliance is merely a threat- is (IMO) nonsense

[beyondhope]

What deliberately misleading tosh! They missed the part in red.

They have conveniently misquoted s 88, it is just their loose interpretation of it so you need to throw the actual section back at em.

They have also deliberately misinterpreted the meaning of "DATE" which, according to the Oxford Dictionary is:

 

I don't know of many people who, when asked their date of birth, would reply " 25 years 3 months and 2 days before today".

 

Similarly, their justification of posting times is self serving and cynical, in that it would presume a letter posted on a Friday was delivered on the 2nd day, or the day after if the second day is not a working day...however if, say, the Monday was Christmas Day and Tuesday Boxing Day then the letter would not arrive until Wednesday, which makes nonsense of the reasoning.

One might question their motives when a time sensitive legal document is served by them in such a casual and unreliable manner when there are clearly benefits to be had, in the form of early repayment, if the recipient is not given sufficient time for remedy.

 

Elsa x

 

Thank you Elsa