Invalid Default Notices

[bradfordlad]

Well it's here:

 

 

87

.—(1) Service of a notice on the debtor or hirer in accordance with section 88 (a "

default notice ") is necessary before the creditor or owner can become entitled, by

reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum, or

© to recover possession of any goods or land, or

(d) to treat any right conferred on the debtor or hirer by the agreement as

terminated, restricted or deferred, or

 

(e) to enforce any security.

 

If the DN is not in the prescribed form, they cannot legally go on to do any of the above.

 

Hi Vint, Is a person having a current account overdraft, a debtor or hirer of a regulated agreement as far as 87:1 is concerned? If so, then a dodgy DN may still be a valuable document as it would appear that , even though the bank can withdraw the overdraft facility at any time, (they can do so because its written in the agreement). therefore having removed the facility they ask for the balance to be repaid, failing which, they issue a DN. They havent terminated the account, they have just removed the overdraft facility. Asking for the money back by issueing a dodgy DN.

 

Its confusing where overdrafts are concerned, easy when its hire purchase. Any chance of examining the position regarding overdrafts?

 

I couldn't agree more! There doesn't appear to be a definitive answer on CAG re dodgy DN's on OD's - I've got one at the moment, and I'm having to keep quiet as I haven't got any evidence to use to catagorically state "it's dodgy". The problem comes that they could possibly just reissue another, as they haven't terminated?

[Undercover-Elsa]

The main advantage to be gained from a faulty DN is that the bank can only claim the arrears up to the point of termination. Obviously with loans and cards there will be an amount not yet due under the agreement, and only by issuing a valid dn do they have the right to demand this in advance. An overdraft, however, is payable IN FULL, on demand, subject to notice. Therefore, as far as I am aware, the only benefit of a faulty DN on an overdraft is the possibility of making a counterclaim for damages on the basis of unlawful rescission of contract. The full amount of the od would still be owed (less any amount awarded in a counterclaim) as there are no arrears as such or future instalments..... in contrast to the case of a running or fixed term credit account, where they would lose the right to claim sums not yet due if the dn is faulty.

Just my opinion..see what others think.

Elsa x

Edited April 22, 2010 by Undercover-Elsa

[vint1954]

I know it's been raised before but please enlighten me.

 

If a DN is issued for an account, can the OC at a latter date issue another DN with larger arrears say a year latter?

I would have said no as the first DN notice is basically saying if you do not pay us £ by we are entitled to do the following. Now providing the DN is valid they are perfectly in their right to do what they say they want to. In issuing another DN haven't they just gone back on their first? The only time I would imagine 2 DN's getting issued are if the first was satisfied and the creditor then defaults again.

 

Thanks

 

Pumpytums

It will depend Pummpytums, if the account is closed or terminated following a DN, then no they cannot reissue.

[vint1954]

Thanks Vint, this is a real help.

 

So, under s87(1)(b), a dodgy DN excludes the right to claim the full amount, leaving just the amount claimed as arrears on the DN? That makes sense - the arrears being "late payment" and not "early payment".

 

Once the agreement is terminated or the ballance claimed in full.

 

So, to then get the default de-registered, that would mean an action of some description, assuming the CCC isn't interested in helping. I guess that could be either a counter claim in defence of an action started by the creditor, or an action started by the debtor.

 

You could try arguing with the CRA's that the DN is faulty and inaccurate information, therefore they are not allowed to process and have a duty of care to check.

 

You don't sound too enthusiastic about the latter, but what might the pitfalls be? Is part of the problem (or in fact all of the problem) trying to argue that there has been no default, when clearly there has been?

 

It is far better to negotiate than to litigate. If the CRA's are made aware of the possible fimne involved.

 

Is the only real way to do it to use the defective/unlawful agreement argument and not a flaw in the DN?

 

Using the agreement will be a long track. Search for a thread started by surleybonds recarding CRA's and data removal. There has also been discussion here: http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/222663-cras-ocs-credit-ref.html

 

Or is there something else I could do or argue?

 

Hope you've got time for this - your opinions are v. helpful and I'm sure not just for me !!

 

Cheers

LA

Vint

[vint1954]

Well it's here:

 

 

87

.—(1) Service of a notice on the debtor or hirer in accordance with section 88 (a "

default notice ") is necessary before the creditor or owner can become entitled, by

reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum, or

© to recover possession of any goods or land, or

(d) to treat any right conferred on the debtor or hirer by the agreement as

terminated, restricted or deferred, or

 

(e) to enforce any security.

 

If the DN is not in the prescribed form, they cannot legally go on to do any of the above.

 

Hi Vint, Is a person having a current account overdraft, a debtor or hirer of a regulated agreement as far as 87:1 is concerned? If so, then a dodgy DN may still be a valuable document as it would appear that , even though the bank can withdraw the overdraft facility at any time, (they can do so because its written in the agreement). therefore having removed the facility they ask for the balance to be repaid, failing which, they issue a DN. They havent terminated the account, they have just removed the overdraft facility. Asking for the money back by issueing a dodgy DN.

 

Its confusing where overdrafts are concerned, easy when its hire purchase. Any chance of examining the position regarding overdrafts?

It depends on the overdraft. Most are not covered fully by the CCA, but some are where they may be linked to a Mortgage or other type of Loan, such as a One Acount.

[vint1954]

I couldn't agree more! There doesn't appear to be a definitive answer on CAG re dodgy DN's on OD's - I've got one at the moment, and I'm having to keep quiet as I haven't got any evidence to use to catagorically state "it's dodgy". The problem comes that they could possibly just reissue another, as they haven't terminated?

If they have issued the DN under s87(1) of the CCA, then they obviously think that it comes under the act, so it must comply.

[tedney]

I have a DN served under sections 76(1) and 98(1) of the CCA 1974 for an overdraft on a current account demanding payment of the total amount oustanding. DN was issued in December 07 with, I think, incorrect complaince dates, issued 17/12/2007 [monday], received 20/12/2007[thursday](no envelope retained!) and "pay by date" of 07/01/2008 [monday], so effectual "pay by date" would be friday 04/01/2008? {christmas and boxing days were Tuesday/Wednesday, and new years day tuesday}

Could some one check these dates please?

Are the sections quoted correct?

When is account deemed to be closed or terminated?

I have not received any statement or notice in compliance of CCA 1974 in respect of failure to make required payments.

Any thoughts 0r advice would be welcome.

[Worsteve]

Hi vint1954

 

just a quick one this. I have recently been to court and stopped a charging order in its tracks by citing a dodgy DN. The lender took the case to court and effectively terminated the agreement. I have always paid to my various loans using a third party management company, but they still took me to court. I have 2 questions;

 

1. Should I still be paying the loans I am disputing?

2. Should I send a letter of Unlawful recission of contract to the lender who recently took me to court?

 

Many Thanks for your help!

[vint1954]

Hi vint1954

 

just a quick one this. I have recently been to court and stopped a charging order in its tracks by citing a dodgy DN. The lender took the case to court and effectively terminated the agreement. I have always paid to my various loans using a third party management company, but they still took me to court. I have 2 questions;

 

1. Should I still be paying the loans I am disputing?

 

That depends on the judgement that the court made. You must pay if they have said so.

 

2. Should I send a letter of Unlawful recission of contract to the lender who recently took me to court?

 

May be too late now, but more details are required.

 

Many Thanks for your help!

Vint

[Yog sothoth]

In small claims, it's even more difficult as the judges can rule on 'probability", whatever that is!

 

They do so in Fast Track as well, as my wife found to her (and my!) cost last year.

[Yog sothoth]

Could someone help me with a letter on this specific issue?

 

It's to a well known DCA (rhymes with carrot) who are demanding a response by tomorrow or else their claim becomes a trial:

 

Thank you for your letters dated xx/04/10.

In response, I would point out that, as this matter relates to a Consumer Credit Agreement, made under the Consumer Credit Act 1974, that Act ('The Act') and regulations made under it are the primary legislation pertaining to the case, and not the Law of Property Act, which you have previously cited..

Under s.189 of The Act, it is clearly stated that you are The Creditor, as the person or persons to whom the rights and duties of the agreement have passed by assignment.

As previously stated, the Original Creditor issued a Default Notice which was not compliant with s.88(2) of The Act, in that it did not allow sufficient time to remedy the alleged Breach of the agreement. The subsequent termination of the agreement, by means of its assignment to a third party (ie. yourselves) thus represented an unlawful rescission of the agreement, as made clear by s.87 of The Act.

The original creditor had no lawful right to claim any sums other than the arrears stated on the Default Notice.

 

It's at this point I get a bit stuck for eloquence.[/font]

Edited April 22, 2010 by Yog sothoth

[Lord_Alcohol]

Vint

 

Many thanks for your help with all this - truly useful advice.

 

Did anyone else notice that no-one raised the question of invalid default notices at last night's leadership debate? We had foreign affairs, Trident and the Pope instead - what a waste!

 

 

:grin::grin::grin:

 

LA

[underdog13]

How about a company that terminates your agreement BEFORE it issues a default notice?!

[tedney]

Any thoughts on post #2189 please:)

t

[ltc1607]

I have a DN from the co-op dated 11/02/09 giving me until the 25/02/09 to rectify also a letter dated 11/02/09 terminating the account.I have had the account with a solicitor since july 09 regarding the cca as all I had was a screen print of the front of the doc.The co-op have now sent the solicitor a copy of the terms and conditions that they say are on the back of the doc the solicitor has now dropped the case as he says they dont have to produce the original in court. a copy will do, so it will be enforceable.I am now left with the DN and dont know what to do next I have a DCA keep phoning me and up to now I have told them to deal with my solicitor.Anybody any idea what I should do next regarding the DN as it seems its the only leg I have left to stand on should I write to the DCA or co-op.Anybody.Thanks

[lookinforinfo]

Could someone help me with a letter on this specific issue?

 

It's to a well known DCA (rhymes with carrot) who are demanding a response by tomorrow or else their claim becomes a trial:

 

Thank you for your letters dated xx/04/10.

In response, I would point out that, as this matter relates to a Consumer Credit Agreement, made under the Consumer Credit Act 1974, that Act ('The Act') and regulations made under it are the primary legislation pertaining to the case, and not the Law of Property Act, which you have previously cited..

Under s.189 of The Act, it is clearly stated that you are The Creditor, as the person or persons to whom the rights and duties of the agreement have passed by assignment.

As previously stated, the Original Creditor issued a Default Notice which was not compliant with s.88(2) of The Act, in that it did not allow sufficient time to remedy the alleged Breach of the agreement. The subsequent termination of the agreement, by means of its assignment to a third party (ie. yourselves) thus represented an unlawful rescission of the agreement, as made clear by s.87 of The Act.

[/font]

 

Any good?

 

"Obviously, I cannot stop you instituting legal proceedings against me, but I am sure there are other cases where you will have a much better chance of winning."

[lookinforinfo]

Could someone help me with a letter on this specific issue?

 

It's to a well known DCA (rhymes with carrot) who are demanding a response by tomorrow or else their claim becomes a trial:

 

Thank you for your letters dated xx/04/10.

In response, I would point out that, as this matter relates to a Consumer Credit Agreement, made under the Consumer Credit Act 1974, that Act ('The Act') and regulations made under it are the primary legislation pertaining to the case, and not the Law of Property Act, which you have previously cited..

Under s.189 of The Act, it is clearly stated that you are The Creditor, as the person or persons to whom the rights and duties of the agreement have passed by assignment.

As previously stated, the Original Creditor issued a Default Notice which was not compliant with s.88(2) of The Act, in that it did not allow sufficient time to remedy the alleged Breach of the agreement. The subsequent termination of the agreement, by means of its assignment to a third party (ie. yourselves) thus represented an unlawful rescission of the agreement, as made clear by s.87 of The Act.

[/font]

 

"Obviously, I cannot stop you instituting legal proceedings against me, but I am sure there are other cases where you will have a much better chance of winning."

 

Any good?

[nks22]

Anybody any idea what I should do next regarding the DN as it seems its the only leg I have left to stand on should I write to the DCA or co-op.

It's a good leg (and one many of us are standing on). If they've terminated you should write to accept unlawful recission.

 

How about a company that terminates your agreement BEFORE it issues a default notice?!

The same as after an invalid DN. The absence of a DN is no different to an invalid one. The only problem is that if they claim to have issued a valid DN you won't have the evidence to prove otherwise.

[DonkeyB]

... unless they have a clause in the T&Cs that allows them to terminate at any time. Egg have done this most famously, with people whose accounts were being run perfectly well. However, they are usually obliged to give notice of termination, all the same. But technically you CAN have termination without a DN - what matters is whether the issues surrounding the termination were related to non-payment or arrears, and there was correspondence regarding this.

 

Complicated, ain't it? I need a drink...

[subam]

Does a termination have to be set out in a certain way the same as a DN? I have what I think is a termination letter which was sent out in 2009 when the actual debt was sold on in 2005. No DN, DCA threatening Statutory Demand.

 

Need a drink... going to get one now before I go blind reading this fab website.

[lexis200]

I have a DN from the co-op dated 11/02/09 giving me until the 25/02/09 to rectify also a letter dated 11/02/09 terminating the account.I have had the account with a solicitor since july 09 regarding the cca as all I had was a screen print of the front of the doc.The co-op have now sent the solicitor a copy of the terms and conditions that they say are on the back of the doc the solicitor has now dropped the case as he says they dont have to produce the original in court. a copy will do, so it will be enforceable.I am now left with the DN and dont know what to do next I have a DCA keep phoning me and up to now I have told them to deal with my solicitor.Anybody any idea what I should do next regarding the DN as it seems its the only leg I have left to stand on should I write to the DCA or co-op.Anybody.Thanks

 

Spookily similar to my co-op debacle.

 

If I ignore the fact they terminated the account without a DN a couple of years ago, more recently they sent a DN, gave exactly 14 days from the date on the letter (if you don't count the fact it was payable before the stated date), then terminated. After that they sent another DN along with a termination dated the same day, then if memory serves they sent another termination which would have been fine if it wasn't for the 2nd DN being a pile of toot.

 

Going on personal experience, you will get absolutely nowhere with them when you argue this. I have sent them proof of the original termination. They say it has not happened as it's not in the notes. I HAVE THE LETTER IN MY FILES!!!! I have sent them proof of the 2 cocked up DN's and subsequent terminations, but apparently I am mistaken and they comply fully. They will not be budged on it regardless of evidence showing they are utterly and completely screwed.

 

Do attempt it with them, but unless you manage to get your letter to the desk of someone with a brain (I've written to the CEO twice - apparently he's 'too busy' to bother reading the letters of his customers though) be prepared to get hugely annoyed with their evasive and downright false replies.

[lexis200]

... unless they have a clause in the T&Cs that allows them to terminate at any time. Egg have done this most famously, with people whose accounts were being run perfectly well. However, they are usually obliged to give notice of termination, all the same. But technically you CAN have termination without a DN - what matters is whether the issues surrounding the termination were related to non-payment or arrears, and there was correspondence regarding this.

 

Complicated, ain't it? I need a drink...

 

No, they can't. They can write it in their t's and c's, but afaik a company's terms do not yet overrule the Consumer Credit Act (although they might like to think they do) which most definitely requires a creditor to give notice!

[DonkeyB]

The right to terminate is standard - banks can withdraw the card with notice, and the customer can hand it back if they pay off the balance. Without a right to termination, nothing would ever happen! The CCA does not deny those rights - it just clarifies how they should be used, as stated, ie. by giving notice.

 

Wish I'd never given up drugs.

[nks22]

unless they have a clause in the T&Cs that allows them to terminate at any time

If it's an agreement regulated by the CCA then it's an agreement regulated by the CCA and that requires a valid DN and termination before a court can enforce payment. There's no provision in the Act for lenders to opt out of that even if the debtor was to agree to it.

 

(My understanding, anyway, but I could have misunderstood somewhere!)

[cosalt]

The right to terminate is standard - banks can withdraw the card with notice, and the customer can hand it back if they pay off the balance. Without a right to termination, nothing would ever happen! The CCA does not deny those rights - it just clarifies how they should be used, as stated, ie. by giving notice.

 

Wish I'd never given up drugs.

 

Hi, could you point out where in the CCA 1974 it allows creditors to terminate a running account ( credit card ) without it being in default ?