Invalid Default Notices

[Bill Shidding]

Well done GAZZA12

 

Allthough my case was dismissed yesterday, i did have a dodgy DN also a Dodgy Notice of Assignment. But i never got to use it as i said my case was chucked out owing Howard Cohen not sending in the original Documents on the day.

 

Seems like you got a decent Judge!

 

Did you "ask" for Judgement?

 

Bill

[Bill Shidding]

Hi C2K, just a thought -

 

You said -

 

I have a DN from the OC MINT

 

and -

 

and TN from a DCA Triton

 

As the OC issued a DN, and a DCA issued a TN, did you get a NOA from both of them before the TN?

Your agreement was with Mint, only Mint can legally terminate it, unless it has been assigned.

 

Bill

[Bill Shidding]

Hi Guys, as I lost a case on these grounds (at trial), I feel I need to make fellow caggers aware of the following cautions.

 

1) Should the DN or TN be ineffective, the agreement will endure until the borrower accepts the repudiation. Continuing non-performance or silence will not constitute acceptance.

 

2) As the DN or TN is ineffective, the termination is ineffective until the "acceptance" of the unlawful repudiation is brought to the creditors attention. The borrower will be liable for any arrears accrued up to the date of the acceptance (not up to the date/amount stated on the DN, because the DN is ineffective).

 

This is where an acceptance letter/action is time critical. The quicker the acceptance is sent or, an act of acceptance is brought to the creditors attention, the lower the sum of arrears that are recoverable.

 

This is irrelevant where the borrowings are in the form of a fixed term loan. A creditor may bring an action after the specified term of the loan has expired, and not have to rely on a DN or TN as evidence at all. This is because the creditor will not be seeking a remedy to the default, he will only seek to recover arrears. This, of course, is subject to the creditor serving compliant notices under section 86 b, d and f.

 

My main point is to ensure that (in future) caggers will be more aware of the benefits of a timely acceptance, and the pitfalls of leaving it too late.

Hopefully, I won't be crucified now.

 

Bill

[Bill Shidding]

if a current account is not subject to the Consumer Credit Act?

 

Current accounts are regulated by the consumer credit act. Save for signing of agreements. Of course, a creditor still needs to prove that they have given O/D facility letters for authorised overdrafts. And/or provided prescribed information within 3 months and 5 days, where the O/D is unauthorised.

 

I believe that a DN is served after a final demand on O/Ds. Overdrafts are "repayable on demand" anyway.

 

I'm sure Vint will add to this.

 

Bill

[Bill Shidding]

Hi Emandcole,

 

What happens if a bank has not registered a default on your credit file for the overdraft, or sent one (that you are aware of) but then gets a DCA, in-house or otherwise, to chase for the full balance?

 

A creditor is under an obligation to file accurate information on a borrowers credit file. The creditor is required to file that information "within" 6 months of the default, unless there are extenuating circumstances. You should check the ICO guidance on filing defaults to ensure they have complied. IMHO, if they have not filed a default on your file, they can't be that confident of justifying one. I take it that a possible default has not "dropped off" already?

 

If you claim (in court) that you did not receive a DN in the post, the creditor will almost certainly state (in my experience) that "we didn't get it back". The judge, will probably swallow that whole.

I take it that you have done a SAR, and have now received a copy?

 

As far as the DCA chasing a disputed debt, thats what they do. They don't get paid if you don't pay, and they don't know (or care) how the debt accrued. All they know is your name, address/phone number and the sum. What they don't know, they invent;).

 

Cheers,

Bill

[Bill Shidding]

Hi emandcole,

 

Didn't know they had up to 6 months to register it with the CRA's so thanks for the new info. Have tipped your scales accordingly

 

Thanks for the thanks;)

 

The time limit is because the whole idea of keeping a credit file is to maintain "accurate and up to date" information. After all, if a creditor could decide when to file a default, it could take them years to get their act together!

 

Bill

[Bill Shidding]

You can't be in default with a DCA since you don't have any agreement with them on which to have defaulted.

 

Au contraire -

 

ICO Version 3 Defaults: A guidance note 02.08. 2007

The ‘sale’ or assignment of debts on defaulted accounts

52 When the rights to a debt are sold to a third party, the lender has to make sure the records with the credit reference agency are accurate, up to date and adequate. If they want information about the debts to continue on the credit reference file they will need to come to an agreement with the purchaser about who is to be responsible for this.

 

53 If the purchaser agrees to take control of the record, the customer should be informed that the debt has been sold or assigned and to whom. The credit reference agency file should be changed to show the name of the purchaser and that the rights to the debt have been sold or assigned. The purchaser should then make sure the record is kept up to date including changes to the amount still owed. The purchase should not affect how long the record is kept. It should be removed six years after the default.

 

54 Where the purchaser of the debt does not agree to take control of the record, the original lender, and at least in part the credit reference agency, will remain responsible if the original record is kept on the file. When the debt is sold or assigned, the customer will no longer owe any money to the original lender. If the record is not removed, the sale or assignment should be recorded and the balance should be shown as zero. The customer should still be told who the debt has been sold or assigned to.

The full document is here - http://www.ico.gov.uk/what_we_cover/data_protection/guidance/technical_guidance_notes.aspx

Edited January 22, 2010 by Bill Shidding

[Bill Shidding]

Hi nks22, I wasn't having a dig at you:D

 

Your quote above is from x20's original post.

If I remember correctly, x20's opinion was that any reasonable judge shouldn't require a lip to accept unlawful termination, this can be read in x20's later posts, in the further discussion thread.

[Bill Shidding]

Can any experienced CAGGERs comment on whether there is a time limit to send this letter by Diddydicky following a termination letter?

 

I'm not quite sure what you mean by experienced, but if you mean "been to court on this subject" then -

 

So long as you are 100% positive of an irregularity with the notices -

 

There is no time limit, but the sooner after receiving the TN, the better. Arrears are accruing up to the date of the acceptance deed/letter.

[Bill Shidding]

What do you mean by arrears are accruing up to the date of the acceptance deed/letter?

 

When you argue that the DN/TN amount to unlawful rescission (because the notices are ineffective) legally the agreement endures until you "accept". Therefore, you would be liable for any arrears accrued until the acceptance is received by/brought to the attention of the creditor. Unless you get very lucky on the judge lottery.

 

The case law usually relied on (to pay the sum legitimately owing on the date of the DN) is Woodchester vs Swayne. Where a DN that mis-stated arrears left the debtor only liable for the actual arrears accrued up to the date of the DN.

Woodchester vs Swayne was a hire purchase agreement for a photocopier, I suspect that the photocopier was repossessed after Woodchester served Swayne with the DN or TN. As such (upon repossession of the photocopier) there were no further arrears to accrue.

In any case, Swayne was/is a firm of solicitors, so I would expect them to know all about rescission or repudiation. However, the appeal judgment does not mention whether or not Swayne even counterclaimed for unlawful rescission or, if they "accepted" the rescission.

 

I would still be very appreciative if anybody has the original (pre-appeal) judgment to share.

 

Bill

Edited January 22, 2010 by Bill Shidding

[Bill Shidding]

Would I be right in thinking that if an agreement is still "alive" the borrower needs to agree to the assignment?

If that is the case, then could it be extrapolated from that, that if the borrower is not "invited" to agree to the assignment, then the agreement is terminated?

[Bill Shidding]

Hi DD,

 

doesn't it say in most T & C's that they can assign the debt without your permission?

 

I would imagine it does say that. As emandcole said -

 

As they can't provide them (t&c's) that would surely put into question any contractual 'right' to assign or transfer anything?

 

I am fairly confident I read "somewhere" that whilst an account/agreement is "live" the creditor needs to ask. Maybe perhaps to give the borrower the opportunity to settle before the assignment? I will have another look.

 

Bear in mind that what a creditor says in the T&C's, isn't necessarily legal!

[Bill Shidding]

He would get 7 days notice if it was an amex "charge card". No need for any DN if there is no breach of contract, just cancelling the agreement for some reason.

 

Is cca74, sec 98A in force?, as I think that is directly attributable to a charge card (but not O/D'S).

 

I look forward to seeing the full judgment.

[Bill Shidding]

AFAIK -

 

A section 98 notice would only be served when the account is repayable "on demand" (such as an overdraft or charge card).

 

The creditor is entitled to demand the repayment of the account immediately (it will give the borrower xxdays to pay).

 

If the borrower fails to repay on/by that date, he is in default (of the contractual requirement to repay the account "on demand")

 

A default notice is served because the borrower is in default of the demand to repay the whole balance.

 

After (7) days the creditor can issue LBA/proceedings.

 

Section 98 A will/does allow the borrower 2 months to repay the balance.

 

IMHO, this case does not relate to a "credit card account"

[Bill Shidding]

Hi Diddy, good to see you too.

 

On reading the pdf file, did anyone else notice this?

Maybe this was the case referred to?

 

30.

"I have already indicated the dates of the default notice, but in deference to the argument advanced by Mr Rankin the section 87 default notice is dated 19 june 2007:"

 

I hope that is not THE Mr Rankin.

[Bill Shidding]

parliament decreed (not all that long ago) that the creditor could not take "the next step"

 

I don't think that was parliament dd, I think it was Mr Gryffd (Woodchester v Swayne).

 

the DN (horse) comes before the entitlement to the benefits of s87 (the cart)- and the debtors actions in response to the DN are irrelevant

 

Precisely, DD .

 

A knowledgeable defendant may retort "I knew that the DN was not in accordance with sec88 and therefore the claimant was not (and is still not) "legally" entitled to terminate under cca74 or demand earlier payment of any sum. Furthermore, as the claimant is claiming sums he is not entitled to in the PoC, why are we here (Sir)?

 

Of course, the reply would depend on the judge lottery.

 

As far as terminating the account under the agreement t&c's, creditors have always been able to do that. Usually only where the borrower has outright lied to get the facility, or has been a very naughty borrower.

Whipping the facility from under the borrowers feet (because he is struggling) is/will be allowed under cca74 (98A), but they must give 2 months grace. I'm not sure if 98A is enacted (yet) but it is on legislation(dot)gov.

 

It will be interesting to see where a workaround materialises from. As I read somewhere "God shuts a door, but leaves open a window"

 

From what PT was saying on one thread the case has been referred to the Court of Appeal

 

God works in mysterious ways. Smiley face x2.

 

Bill.

[Bill Shidding]

Hi bustthematrix,

 

Hi Bill, do you mind clarifying your comments here please? Section 98 (1-6) already exists under the CCA1974. What are you referring to under '98A' and how would this change was is already in place?

 

This amendment is/will be introduced on S.I. 2010/1010 reg 38.

May help if I give you the link to the amendment -

 

http://www.legislation.gov.uk/uksi/2010/1010/regulation/38/made

 

IMHO, In "non default cases" with open ended agreements (except personal and business o/d's), the creditor, upon enactment of this amendment can terminate an "included agreement" without any breach, so long as the agreement allows termination by either party. In fact, if the creditor has a look at your credit file, and discovers you are upto your neck, he can use that as a reason to terminate the account. Therefore, putting the poor borrower into deeper doodoo.

 

Hope that explains my previous comments.

[Bill Shidding]

In the light of the recent judgments given against the borrowers (as the claimant), I feel that the courts are no longer sitting on the fence, but are sun-lounging on the creditors patio drinking pimms.

 

An adverse CRA file is generally only a problem if "the person" is/or will be seeking further credit. Speaking from an entirely personal perspective, I couldn't care less how the creditors molest a file that will be erased after 6 years. After all, I don't plan on being a slave to a bank again.

 

Wilma, ICO guidance states that a default "should" be registered within 6 months of the actual default date. Unless there is a good reason for a delay.

Edited August 16, 2010 by Bill Shidding

[Bill Shidding]

Hi,

 

but the judges in these cases don't always seem to have good legal judgement let alone morals!

 

Reminds me of the saying "Don't Judge in my Church, and I won't Preach in your Court"

IMHO, if a judge wishes to make decisions on moral grounds he should have become a man of the cloth, not of silk.

I don't think we should criticise our judges, they are the best money can buy.

 

 

I seems they were purporting to say that hypothetically they COULD have, so the dn is of no relevance.

 

In the trial I had, it was apparent that the claimant can/will try any avenue to secure a "win" if their initial argument fails.

Our job as defendants is to counter these "new" avenues as they occur (and squash them) but we need a sound knowledge of every possible route the claimant may take first. That is the hardest part to predict and research and exactly why LIPs should do all their own research for their own cases.

Whether or not the judge allows them to continue on grounds that are not mentioned in the POC will show where the judge morally stands. If you successfully counter the POC then the judge should legally dismiss the existing case, and/or allow the (lip) defendant to re-defend or admit the claim in its new particulars. However, that would mean more expense for the claimant (tough, they should've issued on firm ground).

 

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.

Edited September 5, 2010 by Bill Shidding

[Bill Shidding]

You then get an erosion of accuracy - if its ok to be only 95% accurate, then it must be ok to be only 94.5% accurate

 

In the same vein, I have it directly from the mouth of a Judge that his decision is based on the "balance of probabilities" (as we already knew) and "the ratio only needs to be 51/49".

 

 

Hi Shadow,

 

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.

 

My mootings were in an attempt to reason why the Judge allowed Amex to win the case with a notice served under section 98(1) of the CCA74. I was trying to find way(s) in which Amex could argue that the Brandon account (being a credit card) was eligible under section 98? (When does a credit card account specify an end date?) As such, this pleading should have failed under sec98, 2 (a).

There can only be 2 possibilities that I can think of;

1) The judge favoured Amex, and was going to award judgement whatever the outcome of the pleadings.

2) There is something not mentioned in the judgment, that the agreement did specify an "end date" in some way.

If the answer lies within No2, then where/how could an end date be conjured up from a credit card account?

My possibilities;

1) Membership fee renewal date.

2) Card expiry date (I know!).

 

This was in an attempt to enter the mind of the Amex counsel because in order to beat them, we have to think like them. Once we can think like them, they've lost.

Bill

[Bill Shidding]

Hi DD

 

although i believe there is in the CPR a mechanism for a party in a case to apply to the court not to allow the other side to withdraw

 

CPR 38.4(1) Though that is in regards to discontinuance.

[Bill Shidding]

Hi Bobbielee,

 

LJ Kennedy, Woodchester v Swayne.

 

"Here we are dealing with a statute which, for good and obvious reasons, requires a lender or owner to set out precisely what needs to be done to put right the alleged breach of contract. If a sum of money has to be paid it needs to be "specified". And if the figure given is more than the sum which the giver of the notice is entitled to demand, the notice, in my judgment, must be invalid."

 

Woodchesters actual arrears were £643.30. The sum demanded on the DN was £879.90, which I calculate at 37% too much. But from the statement above, it would appear that 1 penny over would be enough to invalidate the DN. Convincing a judge that 1p over invalidates a DN is the hard part.

 

 

Hi DD, just wanted to pick this up-

 

there is NO relief in the CCA s88/87 for the creditor to terminate on the back of an invalid DN

 

In my experience, the court will rule that the termination did not occur (unless the termination has been accepted).

There is no sanction (in the CCA74) if the creditor terminates on the back of an invalid DN.

[Bill Shidding]

Hi bobbielee,

 

Did you file any acknowlegement of service or admittance/defence?

 

If not, I would consider applying for the judgment to be "set aside".

You should begin your own thread to get the most appropriate help.

 

The thrust of your argument being that,

You have recently received legal assistance and, discovered the DN was invalid.

 

Out of interest, was your "judgment" made at Northampton?

 

Bill

[Bill Shidding]

Good luck with the CAB bobbielee.

 

Try opening a thread here if they cant help.

 

Bill

[Bill Shidding]

absolutely, hence my preference to ensure that one has made the election clear

 

Hi DD, more than an preference I think. A necessity to ensure an unequivocal notice is brought to the creditors attention, words or deeds and such, but we don't need to go over all that again!