Invalid Default Notices

[welshperson3]

Thanks frettful38

Don’t know about the brave bit though, it just a case of them pushing all the time and sooner or later I was bound to push back, as I said I am in court Wednesday but I don’t think it will end there as they cant afford to lose this and set a precedence, and I know that the unfair relationship was introduced into the CCA to deal with the way sub prime lenders behave so an appeal no matter who wins I think.

[welshperson3]

This is one case that I have in my skeleton, I think if anyone is going to court and they think that what the creditor is doing is unfair, then they should have a read of this case and think about including it in their argument.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008J0243:EN:HTML

 

 

Pannon GSM Zrt. v Erzsébet Sustikné Győrfi,

Summary of the Judgment

1. Article 6(1) of Council Directive 93/13 on unfair terms in consumer contracts must be interpreted as meaning that an unfair contract term is not binding on the consumer, and it is not necessary, in that regard, for that consumer to have successfully contested the validity of such a term beforehand.

The aim of Article 6 of that directive, which is to strengthen consumer protection, would not be achieved if the consumer were himself obliged to raise the unfairness of contractual terms. In addition, effective protection of the consumer may be attained only if the national court acknowledges that it has power to evaluate terms of this kind of its own motion.

(see paras 23, 28, operative part 1)

2. The national court is required to examine, of its own motion, the unfairness of a contractual term where it has available to it the legal and factual elements necessary for that task. Where it considers such a term to be unfair, it must not apply it, except if the consumer opposes that non‑application. That duty is also incumbent on the national court when it is ascertaining its own territorial jurisdiction.

The court seised of the action is required to ensure the effectiveness of the protection intended to be given by the provisions of Directive 93/13 on unfair terms in consumer contracts. Consequently, the role thus attributed to the national court by Community law in this area is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion, where it has available to it the legal and factual elements necessary for that task, including when it is assessing whether it has territorial jurisdiction. In carrying out that obligation, the national court is not, however, required under that directive to exclude the possibility that the term in question may be applicable, if the consumer, after having been informed of it by that court, does not intend to assert its unfair or non-binding status.

(see paras 32-33, 35, operative part 2)

3. It is for the national court to determine whether a contractual term, such as a term conferring jurisdiction, satisfies the criteria to be categorised as unfair within the meaning of Article 3(1) of Directive 93/13 on unfair terms in consumer contracts. In so doing, the national court must take account of the fact that a term, contained in a contract concluded between a consumer and a seller or supplier, which has been included without being individually negotiated and which confers exclusive jurisdiction on the court in the territorial jurisdiction of which the seller or supplier has his principal place of business, may be considered to be unfair.

wp3

[frettful38]

Great info WP3, a bit hard to understand so I googled it and found a shorter summary to understand.

 

 

Courts must always check whether contracts are unfair

 

 

In a recent case in the European Court of Justice ('ECJ'), a mobile phone company sued a woman for breach if its standard terms. If there had been no provision in the contract, the case would have been heard in the woman's local court. However, the contract said the case should be heard in a particular court, which was 275 km from where the woman lived. She was on invalidity benefit and had no transport.

 

The woman did not raise the issue of whether the contract term was unfair under European law on unfair terms in consumer trading terms, but the ECJ raised the issue of its own accord, and decided the term was unfair and therefore ineffective because it had the "object or effect of excluding or hindering the consumer's right to take legal action".

 

It further ruled that, in cases brought against consumers, based on a company's standard terms, courts had a positive obligation to consider whether they were unfair, whether the consumer raised this as an issue or not.

The reason it was not necessary for a consumer to challenge a contract term as being unfair was because, if it was unfair, it simply wasn't binding. To require the consumer to challenge it would mean it was binding unless it was challenged, and this went against the intention behind the European law.

Businesses dealing with consumers on standard terms should therefore periodically review those terms for fairness, as the courts will do so as a matter of course in legal cases based on them.

 

Case ref: Pannon GSM Zrt. -v- Erzsébet Sustikné Gyorfi Case C 243/08

 

I will however read the full case later to get more info in case I need it. Thanks again

[Gallahad]

That looks like a great find fret well done

G

[charlie*]

Just a thought or two...

 

 

 

Honest contracts are bilateral that is being based on the assumption of "equal consideration" amongst other factors such as "full disclosure".... if such conditions are not present, then the contract is unilateral and thus unfair and invalid

 

How the heck can anyone decide whether or not to sign a contract when we the proles, goyim, slaves to the banksters - gun fodder (when they decide to have a war) are not allowed to be educated in the ways of money (except to save it in a bank – so they can leverage it into credit) nor the basic principles of contract so that we are well armed when we leave our schooling to go out into the world – at least knowing some of the questions to ask before committing ourselves to usury.

 

I am starting to think that the CCAct might have been designed full of traps for us.

 

 

 

I am watching all of this - and Pimpkins thread like a hawk, for my home is now on the line

[Lord_Alcohol]

Where an OC chooses to terminate the agreement following service of a defective DN, I'm now wondering whether his demands for the full balance constitute a penalty and so would be unenforceable under UTCCR 1999.

 

I cannot get around the fact that s87(1)(b) absolutely requires a fully-compliant DN to be issued first. For the OC to excuse himself from this subsection and claim the full balance as it was prior to the DN, it is a penalty placed on the debtor and which is outside of CCA.

 

The balance due is not owed. That is ruled out by non-compliance with s88 and is clearly stated at s87(1)(b). Monies are, however, owed, and these are whatever should have been paid up to termination (less the debtor's own costs).

 

If the full balance cannot be owed due to s87(1)(b), then the OC must be seeking the difference between the outstanding balance prior to the DN and the arrears as a penalty.

 

Any thoughts anyone...?

 

LA

[Lord_Alcohol]

As for termination by the OC where his DN is non-compliant, it is clear that he is not entitled to end the agreement in the same way that we are not entitled to travel at more than 70mph on the motorways.

 

However, the OC does terminate the agreement, just as we sometimes go faster than 70mph. He faces no specific sanction due to s170, but he has nevertheless terminated the agreement. For a court to say that he hasn't and that he must now resurrect the agreement is a bit like being told that we won't be fined for our speeding offence but we must remake the journey from start to finish while travelling within the speed limit. Clearly a wholly farcical scenario.

 

If a court finds that he wasn't entitled to end the agreement, then clearly he is not entitled to seek sums unpaid.

 

As for reviving the agreement in order to issue a new DN, CCA prevents this because it would remove the debtor's entitlement to the provision at s89 (as well as causing issues under s140). The question here would be; why does the lender have an entitlement reinstated but the debtor has one removed?

 

I just fail to see why the courts and the credit industry are running around trying to find loophopes in something that is fairly clear and designed to protect consumers. It is simplicity itself for creditors to get their documentation in order and comply with the Act, and it is up to the creditors to decide whether to terminate the agreement. That they fail to comply with the Act and choose to terminate is entirely their choice; the consumer can not be expected to pay for their mistakes and abuse of regulations.

 

LA

[The Mould]

Yes, well the word 'selective' keeps on springing to mind here as far as the said act is concerened, it does to my mind anyway.

 

As I have previously said on this particular subject, the Courts must look at and examine the creditor's cause of action and at the same time view the proceedings brought before it in conjunction with the common law of contract.

 

The Courts have always stated that they will not deprive the defendant in any action of a defence if such defence is recognized in law and indeed complete in law.

 

Lets take a look at a tennant and landlord relationship and the contract between them.

 

The two parties enter into an agreement whereby the tennant agrees to rent for a period of say 2 yrs.

 

Within say 4 months of the contract being concluded, the tennant runs into difficulty (financial) and he is unable to meet his normal monthly payments, he communicates these facts to the landlord and he (the tennant) makes up for the arreas the following month and this pattern continues for a further couple of months.

 

The landlord becomes fed up, he terminates the contract and commences with proceedings against the tennant for the full amount that he would of received had the contract run its natural and intended course.

 

In Court the tennant explains the circumstances of how he was making an effort to make up for the missed payments.

 

In these such circumstances it is the landlord who has caused the loss to himself, the tennant's actions did not cause the loss, therefore the landlord's claim for all sums that he would of had under the contract is struck out.

 

The above is a true case, I cannot remember the name of it but when I have the time I shall try and find it again and post it up.

 

These such cases will all depend on the circumstances and it would be unjust if the Courts do not allow the remedies available to a debtor under the common law of contract if the creditor's cause of action is without legal excuse.

 

Kind Regards

 

The Mould

[alangee]

I spoke with the ICO last week concerning defaults being registered on your credit file after invalid DN. They inform me that they do not deal with DN's that is the OFT's remit. They also said that all they would do is ask the OC if the entry was valid. It would appear that we fall between two stools yet again. The OFT will not adjudicate on information control, and the ICO will have nothing to do with DN's.

 

Alan

[CatAndMouse]

Hi

 

Reading thread #5189, so does that mean if a bank sends you a duff dn and then tn and you except tn, if the judge then says to the bank go back and issue another dn, you could say, well that unfair under:

 

Case ref: Pannon GSM Zrt. -v- Erzsébet Sustikné Gyorfi Case C 243/08

 

 

CAM

[Lord_Alcohol]

Reading thread #5189, so does that mean if a bank sends you a duff dn and then tn and you except tn, if the judge then says to the bank go back and issue another dn, you could say, well that unfair under: CAM

 

We don't know, for all the reasons raised above.

 

If the judge allows the lender to do that, then you should ask him on what basis the agreement is no longer 'terminated', why you no longer have entitlement under s89 and ask that the lender now provides proof that the relationship (as modified by the court's instruction to the lender) between you both is fair under s140.

 

You could also say that you do not agree to reinstatement of the contract, it having been ended by both parties. Just because the lender was not entitled to terminate it he is equally not entitled to reinstate it without your agreement.

 

LA

[CatAndMouse]

Hi LA

 

Well a lender cannot have it both ways, and a judge cannot let them have it both ways, that is clearly unfair. I'm expecting my court case soon, hopefully after christmas and after reading #1589 i'll be using that against the lender as well. Its time we started hitting back and i think the knowledge from cag members is greater than that of dca's

 

CAM

 

I think it would be helpful is the site had a section called 'Upcoming court cases' or something similair, because i found the site is huge and those who have a court case pending would benefit if it was put in a dedicated section allowing the best brains from the site to help them.

Edited October 17, 2010 by CatAndMouse
added extra text

[Lord_Alcohol]

The problem as I see it is that if the courts start making judgements in favour of lenders where the DN is defective then it offers them an opportunity to close credit agreements and collect their money early. This might be a very attractive scenario for them if they are strapped for cash or do not believe that the debtor will toe the line or continue to perform the contract.

 

The argument in Brandon that Amex took no action until after the 14 days plus service seems disingenuous because how would Brandon know that it was 'OK' to clear the arrears after the timescale on the DN? Had he tried to do so, Amex may have told him to get stuffed. In fact, I'm utterly certain that that is indeed what they would have done, the defective DN being an opportunity for them to recoup everything in one hit.

 

LA

[dizzyblonde1966]

Great links

 

From reading the brandon one, am i right in thinking the judge doesnt even touch on the issue of whether an agreement can be terminated on the back of a dodgy dn

 

He seems to be concentrating on not enough days to remedy, but amex didnt take action till well after then so hes allowing it to stand based on the days from dn to termination.

ie in theory hes now got enough time as amex didnt do any other action(terminate) until well after 14 clear days

 

The judge seems to be saying that although Amex issued the dodgy dn on the 19th June they never terminated the account until 11th July,the judge seems to be accepting they did terminated the account on the 11th July,

so does termination remain and the only issue here really is the statutory 14 days on the actual DN notice that is being argued?

 

Im intrigued, as i have 2 halifax loans, dodgy dn"s in that they only gave me 9 days to remedy the breach, and then terminated on the 10th day, so in my case the halifax have clearly taken futher action before allowing the statutory time limit, so wondering how this leaves me, surely i was prejudiced ?

 

I guess my case will end up in court too at some point, im fortunate in that i qualify for legal aid, (if anyone wil take it on)

 

Any thoughts on agreements being termintated within the statutory 14 days?

Edited October 18, 2010 by dizzyblonde1966

[ltc1607]

I too was terminated on the same date the DN was issued.

[DeBilde]

Hi,

 

I had a CC with MBNA and I was sent a invalid DN (not enough time and full balance asked for), I was waiting for a TN to accept unlawful recession but none has arrived. On Saturday I received a letter from Allied Credit International who now want me to call to discuss repayment options.

 

Can I take this as a TN? Do I still send the acceptance of unlawful recession to MBNA?

 

Thanks

[Peterbard]

Hi

The creditor can terminate any time he wants as per the contract and Brandon.

Section 89 refers to remedying the breach in section 87 thus cancelling the notice, not the breech of the agreement. That is why it is contained in part Vii of the act entitled Default and termination

A termination via contract can be followed by a termination under section 87. Obviously, if it wasn’t the debtor could terminate at any time, thus preventing enforcement, the liabilities under the contract do not disappear. Neither does the creditors right to recover

Peter

[emandcole]

Basically the creditor can do whatever they want whenever they want and no prejudice is recognised to the borrower even though the creditor may have breached the contract to its core first by doing three of the following five things, all of which the creditor is apparently not entitled to do unless a correct DN has been issued.

 

Although as a borrower you may have temporarily breached the agreement (within the realms and provision of the CCA) you will probably find your rights will be removed (contrary to the CCA that supposedly regulates your agreement) due to the incompetence and/or lethargy of the creditor who issues a dodgy DN prejudicing your protected rights and potentially removing your chance to restore the temporary breach.

 

They then indulge in the red sections below. They will

 

(a) terminate the agreement (even though they are not entitled to)

 

(b) demand earlier payment of any sum (even though they are not entitled to)

 

© to recover possession of any goods or land, or

 

(d) treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred (remove any benefit you enjoyed under the agreement even though thry are not entitled to)

(e) to enforce any security.

 

If the creditor can't be bothered to issue a valid DN the court will excuse them as long as they can ruffle something up, even though they maintain they terminated the agreement perhaps by conduct and in writing and now stand in court asking for the Consumer Credit Act to come to their rescue as a priority over you.

 

For all intensive purpose a creditor can demand the full balanace at any time for no real reason knowing the court will come to their rescue, as it would be unfair for the bank to lose its money through stupidity but ok for you to end up with a county court judgment.

 

In the simplest terms the CCA should actually be known as the Creditors Convenience Act 1974.

[Peterbard]

Hi

I wonder how many judges have to say that this argument is flawed before some of you get the idea.

Peter

[middenmess]

AFAIK in all credit agreements under the CCA 1974 that we enter into, the lender has included a condition whereby after giving the required amount of notice to the borrower--30 days-- they can end the agreement but cannot claim sums not yet due immediately.

 

The borrower is just obligated to continue to repay the debt by their regular monthly payments until the total is paid off.

 

I thought that this form of termination was only or generally used when the creditor wanted rid of a particular type of customer --one who earnt the creditor little profit by paying their account off before interest became due,for example--exactly as Egg did a couple of years ago when they closed 161,000 unprofitable accounts--and I also thought that none of these accounts were in default at that time.

 

So my question is how does this type of termination work when there is a [large] amount of default already present and how would it effect the PPI element [if this had been taken out] if the borrower needed to make a claim after the account was terminated?

[Lord_Alcohol]

Hi

The creditor can terminate any time he wants as per the contract and Brandon.

Section 89 refers to remedying the breach in section 87 thus cancelling the notice, not the breech of the agreement. That is why it is contained in part Vii of the act entitled Default and termination

A termination via contract can be followed by a termination under section 87. Obviously, if it wasn’t the debtor could terminate at any time, thus preventing enforcement, the liabilities under the contract do not disappear. Neither does the creditors right to recover

Peter

 

Here, the OC terminates on breach, which requires a compliant DN.

 

Section 89 gives entitlement to the debtor to remedy the breach as though it had not occurred. If the OC fails to honour that entitlement, he is therefore in breach.

 

The debtor can terminate at any time, but monies due must be paid. The liabilities are defined by contract and the Act; refer to s87(1)(b) here, as we discuss invalid (ie, non-compliant) DNs. The only sums due are the arrears less the debtor's costs. It is set out in the Act to which both parties agreed.

 

The creditor has no entitlement to recover unpaid amounts where s88 is not complied with. This is clearly stated at s87.

 

It really is very simple Peter.

 

LA

[dizzyblonde1966]

Any ideas on when a creditor issues a dodgy DN , but then also terminates within the 14 days too?

Is that clear prejudice,? in the brandon case the judge is saying its not prejudiced him as Amex didnt terminate till well after the 14 days,

But what about those of us whos agreements were terminated 10 days into a dodgy dn?

 

Thanks

DB

Edited October 18, 2010 by dizzyblonde1966

[Bigdebtor]

(Not so) Dizzy

 

Excellet point!

 

The Brandon case does not deal with this issue AT ALL as far as I can see.

 

It deals with the much narrower issue where Amex threatened to do someting too early but in the end didn't do so - quite different from a case where the TN follows too soon after the dodgy DN.

 

BD

[welshperson3]

We all know that the creditor terminates the agreement.

But IF the CCA doesn’t allow this TERMANATION to happen then the Brandon case is irrelevant

WP3

[The Mould]

Hi,

 

I had a CC with MBNA and I was sent a invalid DN (not enough time and full balance asked for), I was waiting for a TN to accept unlawful recession but none has arrived. On Saturday I received a letter from Allied Credit International who now want me to call to discuss repayment options.

 

Can I take this as a TN? Do I still send the acceptance of unlawful recession to MBNA?

 

Thanks

 

If the full balance was requested in that DN, you should write to the creditor asap and simply state that you accept his repudiation of the agreement/contract.

 

Do not use the words 'unlawful recission'.

 

Kind Regards

 

The Mould