Unenforceability Cases on hold until further notice

[haggis1984]

Hi sorry for the delay it took me a while to dig out. here's the link. I hadn't realised it was to do with PPI but I still think it has some significance for us.

 

As a previous cagger pointed out the emotive language puts an anti cag slant on it. I look forward to the day lenders are routinely described as delinquent, toxic and sub prime.

 

BBC NEWS | Business | Court lets woman off £8,000 loan

 

Keep the faith. EiE.

 

Hi E/E,

 

Defo notice an anti-cag slant in media reporting on these issues.

 

The issue I was looking for more info on specifically was:

 

'Only yesterday in South Shields MBNA were ordered to repay a claimant their entire history of payments. .'

 

V interested to know the cicumstance in which the bank was ordered to repay payment history - not something ive come across before.

 

Thanks for all the other info you posted in response! Intersting stuff

[sams88]

Hi

 

How would this affect me? Nationwide did not comply with CCA request as I didnt sign letter so I have now put in dispute?

[car2403]

Hi

 

How would this affect me? Nationwide did not comply with CCA request as I didnt sign letter so I have now put in dispute?

 

The Judgment doesn't affect you, unless they turn up an enforceable agreement and Default you in the meantime.

 

Without an agreement, the debt is still in dispute - this changes nothing, so don't panic.

[diddydicky]

Putting the Rankine issues to one side, an irredeemably unenforceable agreement results in all the terms - including sharing of data with third parties - being voidable in law, IMHO. Therefore, a s.10 DPA Notice would actually void the agreement terms allowing sharing. Even if it didn't, it's arguably unfair under the UTCCR 1999 to allow a Creditor to report an unenforceable debt, as there is no legal obligation to repay. Even the ICO shares this view, but it seems this wasn't raised in this case, which astonishes me completely.

 

This may end up being a Rankine moment, as this case is flawed, IMHO.

 

The Banks (and every other organisation that provides CRA's with data) will latch on to this to put anyone challenging them off doing so, just as they did when the original charges hearings were lost because Claimants were unprepared.

 

The moral of the story; don't bring a claim unless you understand - and can successfully argue - the legal issues behind it. There's always the Judge lottery to be won, also, but without this as a basic, you're wasting your time and actually making the consumer issues that are being challenged elsewhere even more difficult to fight.

 

my opinion has always been that reporting to CRA's is not enforcement and is to do with protecting the interests of lenders against bad lending decisions.

 

This is what the court upheld.

 

I really do think that we all need to be honest with ourselves and ask if , as is the case in the majority IMO of cases, we have been unable to make the repayments for whatever reason, and are then fortuneately able to challenge the enforceability of the agreement by the subsequent discovery that the documentation was flawed, we really can be seen as being reasonable in demanding that our credit records are not marked accordingly

 

In fact i would say that where people have gotten into trouble with their debts, the consquence of being prevented from further credit for 6 years may have a salutory effect and serve to prevent getting into the same situation again. It will also "train" us during the 6 years of sparse credit that life in fact CAN be lived without credit cards.

 

I for one have no illusions that from the moment i set out to challenge dodgy agreements that the real reason i did so was that i was ALREADY in the **** and didn't expect to blame the creditors for that, but nevertheless, as they are quick to point out themselves, an agreement is an agreement and BOTH sides sign to accept the terms therefore whilst i have accepted that my credit file will be trashed for 6 years , on the other hand i have no qualms about not paying against an invalid contract.

 

I don't expect to be able to have my cake and eat it!

 

Obviously if a creditor terminates an account unlawfully which has hitherto been conducted satisfactorily- then that is an entirely different matter.

 

What we really need is a decision from the appeal courts which states that a creditor may not start an action unless and until they are in possession of agreement and/or any other documents upon which they intend to rely..

 

 

I appreciate my comments may not be popular but i do think some people have unrealistic expectations

Of course

[the_shadow]

 

I appreciate my comments may not be popular but i do think some people have unrealistic expectations

Of course

 

I find nothing in your comments that I can object to TD, I agree with most if not all of what you've stated there

 

S.

[angry cat]

I note that, Mr Richard Handyside QC appeared to be suggesting that RBS had been a responsible lender?

 

"Mr. Handyside submitted that the continued reporting by the bank to the CRA's of the state of the claimant's account during the period of non-compliance was not a coercive tool in the hands of the bank, but an essential aspect of Responsible Lending".

 

RBS, a responsible lender?

That has to be the joke of the century!

[diddydicky]

This is an apalling and sinister test case. Have I read it wrongly or does this now make mincemeat of in dispute template letters, in that this has decreed that enforcement only refers to actually going to court. Are we now to see our already battered members being harrassed, pursued, defaulted, terminated, and contantly threatened with court action even when no agreement is produced and the banks/DCA's KNOW they ultimately can't actually enforce it in court?

Surely, as administrators of the Consumer Credit Act it is for the OFT to define what constitutes enforcement, not some one off clearly pro bank court case. At the end of the day it is THEY who issue the Consumer Credit Licenses.Or not.

I'm fuming. Can you tell?

Elsa x

 

i don't think there is anything sinister in it- the judgement was SIMPLY that reporting to CRA's was not considered enforcement, and that the creditor was entitled to pusue thier commercial interests by sharing information between each other to their mutual protection-

 

(just as we mutually share information about the lenders to our mutual benefit)

[diddydicky]

paragraphs 13 and 14 clearly state the bank has never provided a signed copy of the agreement however the judge has accepted their assertions that they have such a document even though it has not been provided.

 

para 17 says

 

the agreement was valid and enforceable until 11 March 2009 (the date when the 12 day period for compliance with a demand under section 77(1) expired).

 

Furthermore, by virtue of section 77(4) the agreement will be valid and enforceable again once the bank has provided the claimant with a signed statement of account.

 

So it will be when and if the signed agreement is produced but as matters stand the issue of unenforceability remains at large but the judge and other parties seem to have accepted the enforceability issue as resolved.

If I was the borrower I would want to see that signed agreement.

 

that is not the courts fault- the claimant agreed not to pursue the enforeability issues of the alleged agreement in order that this case could continue

 

the judges hands were tied on this

[heliosfa]

i don't think there is anything sinister in it- the judgement was SIMPLY that reporting to CRA's was not considered enforcement, and that the creditor was entitled to pusue thier commercial interests by sharing information between each other to their mutual protection-

 

But, the "right" for them to share that information is a right granted by a term of the (currently) unenforceable agreement (it's not just the "Pay Us" term that become unenforceable, but the entire agreement).

 

 

H

[angry cat]

"Mr. Moran accepted in opening that in some respects the present case was not as approriate a test case as others might have been."

 

Therefore, why was it put forward?

 

There are many other cases involving matters relating to the the processing of data to CRA's that, would have would have been better suited:

cases involving irredeemably unenforceable agreements or, the total lack of a credit agreement.

[Artie44]

i don't think there is anything sinister in it- the judgement was SIMPLY that reporting to CRA's was not considered enforcement, and that the creditor was entitled to pusue thier commercial interests by sharing information between each other to their mutual protection-

Was it SIMPLY about reporting to CRA's not being considered enforcement?

 

Quote from the judgement:

 

"79. In contrast, the bank invited the court (as set out in the list of issues) to conclude not only that reporting to the CRAs did not amount to enforcement, but that a number of other activities did not constitute enforcement: (i) reporting to CRAs without also telling them that the agreement is currently unenforceable; (ii) disseminating or threatening to disseminate the claimant's personal data in respect of the agreement to any third party; (iii) demanding payment from the claimant; (iv) issuing a default notice to the claimant; (v) threatening legal action and (vi) instructing a third party to demand payment or otherwise to seek to procure payment.

 

80. So far as activities (iii) to (vi) are concerned, it was accepted on behalf of the claimant that these did not amount to enforcement or actions to enforce the agreement. That concession seems to me to be correct: at most these activities are steps preparatory to subsequent enforcement. Furthermore, in a recent decision, Rankine v American Express Services Europe Ltd [2009] CCLR 3, HHJ Simon Brown QC (sitting as a Deputy High Court Judge) concluded that the bringing of proceedings is only a step taken with a view to enforcement and not actually enforcement. It seems to me that that conclusion must be correct. Were it otherwise, as Mr Handyside pointed out, one would be left with the conundrum that the creditor could not apply to the court for an enforcement order under section 127(1), because to do so would amount to enforcement, not permitted by section 65(1).

 

81. Once it is recognised that the bringing of proceedings is not enforcement, it necessarily follows that activities (iii) to (vi) do not constitute enforcement, since they are all steps taken prior to the commencement of proceedings and therefore by definition, at most, steps taken with a view to enforcement."

Edited October 7, 2009 by Artie44

[diddydicky]

But, the "right" for them to share that information is a right granted by a term of the (currently) unenforceable agreement (it's not just the "Pay Us" term that become unenforceable, but the entire agreement).

 

 

H[/quote

 

I accept your point however it think it would boil down to a personal perception.

 

An agreement is an agreement- therefore if you agree with someone else to repay money that you borrowed from them - then that agreement should stand.

 

The fact that an agreement is lLegally unenforceable does not make it any less of an agreement and the debt still exists.

 

The right of the one party (being a member of a group (in this case bankers) to keep each other advised of who might or might not be a bad risk for future lending is a perfectly legitimate activity -

 

just as the caggers on this forum report information to each other (some of which is undoubtedly bound to be false ) about creditors and DCA's for their mutual benefit.

 

Indeed, where is there a term in the agreement that says the debtor may share information about creditors with other consumers on a publicy accessed website! - yet we do it!

[diddydicky]

Was a SIMPLY about reporting to CRA's not being considered enforcement?

 

Quote from the judgement:

 

"79. In contrast, the bank invited the court (as set out in the list of issues) to conclude not only that reporting to the CRAs did not amount to enforcement, but that a number of other activities did not constitute enforcement: (i) reporting to CRAs without also telling them that the agreement is currently unenforceable; (ii) disseminating or threatening to disseminate the claimant's personal data in respect of the agreement to any third party; (iii) demanding payment from the claimant; (iv) issuing a default notice to the claimant; (v) threatening legal action and (vi) instructing a third party to demand payment or otherwise to seek to procure payment.

 

80. So far as activities (iii) to (vi) are concerned, it was accepted on behalf of the claimant that these did not amount to enforcement or actions to enforce the agreement. That concession seems to me to be correct: at most these activities are steps preparatory to subsequent enforcement. Furthermore, in a recent decision, Rankine v American Express Services Europe Ltd [2009] CCLR 3, HHJ Simon Brown QC (sitting as a Deputy High Court Judge) concluded that the bringing of proceedings is only a step taken with a view to enforcement and not actually enforcement. It seems to me that that conclusion must be correct. Were it otherwise, as Mr Handyside pointed out, one would be left with the conundrum that the creditor could not apply to the court for an enforcement order under section 127(1), because to do so would amount to enforcement, not permitted by section 65(1).

 

81. Once it is recognised that the bringing of proceedings is not enforcement, it necessarily follows that activities (iii) to (vi) do not constitute enforcement, since they are all steps taken prior to the commencement of proceedings and therefore by definition, at most, steps taken with a view to enforcement."

 

 

no, and the claimant accepted this as in para 80 above that you quote

[heliosfa]

I accept your point however it think it would boil down to a personal perception.

 

An agreement is an agreement- therefore if you agree with someone else to repay money that you borrowed from them - then that agreement should stand.

 

The fact that an agreement is lLegally unenforceable does not make it any less of an agreement and the debt still exists.

 

The right of the one party (being a member of a group (in this case bankers) to keep each other advised of who might or might not be a bad risk for future lending is a perfectly legitimate activity -

 

just as the caggers on this forum report information to each other (some of which is undoubtedly bound to be false ) about creditors and DCA's for their mutual benefit.

 

Indeed, where is there a term in the agreement that says the debtor may share information about creditors with other consumers on a publicy accessed website! - yet we do it!

 

Yes, the debt still does exist. BUT they have no entitlement to take advantage of any term of the unenforceable agreement.

 

OK, if the agreement didn't say anything about sharing data, would they have the right to?

 

If the agreement gave them the following rights:

• Receive payments from you of £1000
  
  
• Charge interest at 5%
  
  
• Add Late Fees
  
  
• Share data with 3rd parties
  
  
• sell the agreement
  
  

and the agreement is unenforceable, which of those rights, granted by the agreeement, are they allowed to enforce and take advantage of?

 

If they are only not allowed to obtain payment, but are allowed to enforce every other right, then the only this not enforceable would be obtaining payment.

 

HOWEVER, what does the CCA say? does it say that one particular term becomes unenforceable or the entire agreement (a collection of terms)?

 

 

As for us "sharing" data, it is not a right granted by an unenforceable agreement. For companies to share data, they MUST have a contractual right to do so. Additionally, us sharing our experiences and knowledge are not going to stop that company obtaining a mortgage or being employed.

 

H

[angry cat]

12 registered caggers viewing and;

12 Guests.

[Artie44]

Doesn't the judge's view conflict with some of the OFT debt collection guidelines?

[angry cat]

ICO Technical Guidance:

 

Unresolved disputes

42 Lenders are faced with difficult decisions when considering recording defaults which are disputed by the customer. It is not our role to arbitrate in disputes between borrowers and lenders. However, when we consider complaints, we will conclude, where there is clear and sufficient evidence that a default has not occurred, that it is likely that the lender has not complied with the data protection principle which requires that personal data are accurate.

43 If we conclude that there is a genuine, reasonable and unresolved dispute between the borrower and lender, then we are likely to find that personal data have been processed unfairly if a default has been filed. Defaults filed in these circumstances may also be inadequate for the purpose of credit referencing in that they do not provide meaningful information about the creditworthiness of the customer.

44 These are difficult judgements to make. Although none of the following will necessarily be conclusive, we will take into account these factors.

Is the customer able to produce evidence that they disputed that a default occurred?

Did the customer dispute the default before the lender announced their intention to file a default or after?

What is the nature of the dispute? For instance, does the customer allege that the agreement has been breached, for example, because the goods supplied were faulty, or does the customer simply dispute the amount of the default?

What evidence has the customer produced to support their side of the dispute?

Has the lender simply ignored this evidence or have they produced evidence to support their version of events?

If the goods financed were supplied by a third party, has the lender taken reasonable steps to check the accuracy of the information supplied about the dispute?

Version 3 Defaults: A guidance note

02.08. 2007

16

Does the customer argue that payment is owed not by them but by a third party such as an insurance company, and, if so, is there any evidence?

Has the customer told the lender that they are exercising set- off rights?

Is the customer defending a court action by the lender to obtain a judgment, and what is the nature of their defence?

Has a court refused judgment to the lender and, if so, on what grounds?

If the dispute has not been before a court, is the lender prepared to test their claim by seeking a CCJ or decree against the customer? If not, why not?

45 We will not necessarily ask a lender to remove default records while they are carrying out their initial investigation to establish whether a dispute is genuine, reasonable or unsolved. However, there should be no unnecessary delay in this investigation. In these circumstances, defaulted accounts under investigation should be marked as ‘under query’ on the credit reference agency file.

[angry cat]

Let us look at a situation where the Bank (RBS) has not been able to provide a credit agreement and any other document referred to in it.

 

The Bank sends a letter stating such and;

also states that one should continue to meet ones obligations under the agreement, bearing in mind that it is not void but remains valid and that any continuing default will be reported to the CRA's.

 

How can an agreement remain valid, if the Bank does not hold one?

[foolishgirl]

a

 

HOWEVER, what does the CCA say? does it say that one particular term becomes unenforceable or the entire agreement (a collection of terms)?

 

 

This is the whole point H, the CCA does not make it clear & Judge Flaux said exactly that.

 

Version 3 Defaults: A guidance note

02.08. 2007

 

45 We will not necessarily ask a lender to remove default records while they are carrying out their initial investigation to establish whether a dispute is genuine, reasonable or unsolved. However, there should be no unnecessary delay in this investigation. In these circumstances, defaulted accounts under investigation should be marked as ‘under query’ on the credit reference agency file.

 

Isn't this what occurred in the McGruff case?

 

As I've said before, an odd case to take to the Commercial Court for clarification when there are so many other issues that could have been dealt with in an appropriate case

 

[angry cat]

by foolishgirl:

 

As I've said before, an odd case to take to the Commercial Court for clarification when there are so many other issues that could have been dealt with in an appropriate case"

 

Agree!

 

AC

[angry cat]

Bet RBS are laughing...for the moment.

[enoughisenough]

I have to say I find this artificially constructed distinction between preparatory to enforcement and enforcement a statutory interpretation and a creative stretch too far. Is pre enforcent a concept given clear definition in the cca? I don't think so, so it had to be ingeniously divined. Now if enforcement counts only as activities re payment all other enforcement activities as the court has identified as preparatory to enforcement cease to be in the act anymore! The court has ruled that they are pre enforcement activities. Can any one find a set of terms and conditions which stipulate pre enforcement activities as one of the rights of the lenders. I can safely state that although this does not really apply you will be hard pushed to state as it does in criminal law that such actions are anything other than more than merely preparatory. I've got a headache. I'm going home to think about this. They've obliterated bennion's carefully drafted section and played fast and loose with parliament's enactment. Any experts on the limits of statutory intrpretation?

[boiled]

Hello all, hope you don’t mind me joining in…….

 

Are we missing a trick here…………we now have it on authority that an agreement is unenforceable if s77 is not complied with, and therefore imo s78 as well.

How many lenders actually provide the agreement and all the associated stuff, in a legible copy, following a s78 request? Shouldn’t we be making more use of this?

Is our first line of defence in court now, strike out claim, agreement unenforceable as s78 not complied with. I’ve seen it in some defences but not all – or am I barking up the wrong tree……..

 

(2) In the same regulatory legislative and contractual context and to give a consistent meaning to "enforceable" in different sections of the Act, section 77(4) should be interpreted as depriving the creditor of its contractual right to repayment and, correspondingly, removing the debtor's obligation or liability to repay, subject to a means to restore the right of the creditor and the obligation of the debtor, by compliance with section 77(1).

 

(3) Accordingly the phrase "not entitled while the default continues to enforce the agreement" in section 77(4) should be interpreted as depriving the creditor of its right to take any coercive action to compel or secure performance of the removed obligation or liability of the debtor to make repayment.

 

71.In those circumstances, it seems to me that the argument that, during the period of time when the bank was not compliant with section 77(1) (in relation to which the bank accepts that for that period the agreement was unenforceable), the bank's rights had been completely extinguished or the bank had been deprived of those rights is a somewhat artificial one. The analysis which recognises that the rights continue to exist whilst being unenforceable during the period of non-compliance seems to me much more consistent with the whole concept of redeemable unenforceability.

 

103. I also consider that there is no basis for granting an injunction compelling the bank's compliance with section 77(1). The only sanction for non-compliance (now that the Regulations have repealed section 77(4)(b)) is that the agreement is not enforceable during the period of non-compliance.

[the main man]

Let us look at a situation where the Bank (RBS) has not been able to provide a credit agreement and any other document referred to in it.

 

The Bank sends a letter stating such and;

also states that one should continue to meet ones obligations under the agreement, bearing in mind that it is not void but remains valid and that any continuing default will be reported to the CRA's.

 

How can an agreement remain valid, if the Bank does not hold one?

 

Some good info in here AC

 

oft_draft_guidance_on_ss77___78_cca_74[1].pdf

 

Citizens Advice welcomes the statement in the Guidance that it is a misleading and unfair business practice for businesses to give the false impression that it could obtain a judgment by threatening legal action where it is aware that because of non-compliance it could not obtain a court order to enforce the agreement (paragraph 5.3). This is particularly helpful in situations where businesses that have not complied with ss77 – 79 tell the consumer that, although the agreement may be unenforceable under ss77 – 79, the debt is still recoverable under common law. Presumably, this would also apply where an agreement is unenforceable due to improper execution and the business says that the debt is nevertheless recoverable under common law.

[angry cat]

Let us look at a situation where the Bank (RBS) has not been able to provide a credit agreement and any other document referred to in it.

 

The Bank sends a letter stating such and;

also states that one should continue to meet ones obligations under the agreement, bearing in mind that it is not void but remains valid and that any continuing default will be reported to the CRA's.

 

How can an agreement remain valid, if the Bank does not hold one?

 

Throw another item into the mixing bowl;

mis-sold PPI...

 

RBS will still wish to record ones data with the CRA's, evn though said data must be considered incorrect.