Anatomy of a Default Notice

[Undercover-Elsa]

I have been avidly researching Default Notices for some time, and although there are quite a few threads ongoing I thought it might be useful to list any relevant info and links all in one place, for my own and everyone else’s easy reference on this important subject.

I must stress that I’m no expert, quite the contrary, and simply hope that this will provide newcomers with a starting point for your own research and (as I am still unclear on the minutiae) a vehicle for further discussion of finer points..so please feel free to add your own links, advice, queries or twopenneth for everyone’s benefit.

 

For those not familiar with the basics, by my understanding, in a nutshell. a precis of many expert views on here: (Please correct me if I'm wrong)

 

A Default Notice must be issued in the prescribed format, correctly state the arrears and allow 14 clear days from date of service for the default to be remedied before a Consumer Credit Account can be terminated. Unless this is done the creditor cannot demand repayment of the full balance. If the Credit Company terminates an agreement on the strength of an invalid default notice, then all the Credit Company can claim is the arrears demanded on the Notice, not the full amount. As I understand it, termination is deemed to have been effected if the full balance is demanded.

 

Informative threads/links:

 

Definitive, brilliant post by Banker_Rhymes_With which also quotes the relevant CCA regulations on Default and Termination:

http://www.consumeractiongroup.co.uk/forum/show-post/post-2166205.html

 

Tale of a Dodgy DN

http://www.consumeractiongroup.co.uk/forum/legal-issues/170345-tale-dodgy-dn.html#post1837307

 

Bank of Scotland Terminated without a Default Notice

http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/171374-bank-scotland-terminated-without.html

 

Invalid Default Notices

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/196312-invalid-default-notices.html

 

Staying Calm vs Abbey **WON** Quite a long and complex case, excellent teamwork by Caggers

http://www.consumeractiongroup.co.uk/forum/dca-legal-successes/145452-stayingcalm-abbey-no-cca.html

 

NEW! March 2010.....Another joint effort with immense credit to all and a high 5 to MandM for keeping his cool in the courtroom:

http://www.consumeractiongroup.co.uk/forum/legal-issues/224300-mandm-egg-loan-mandm.html

 

Case Law, Woodchester vs Swayne & Co:

http://www.bailii.org/ew/cases/EWCA/Civ/1998/1209.html

 

Statute Law Database: Consumer Credit Act 1974 – The full monty

http://www.statutelaw.gov.uk/LegResults.aspx?LegType=All+Legislation&title=consumer+credit+act+1974&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&activeTextDocId=436428

 

I’m sure there must be loads of other excellent references/posts so please feel free to add as we go along.

++++++++++++++

 

To start the ball rolling, my own query on the finer points is that I received a DN with a chunk of text missing from one of the prescribed paragraphs. (Account subsequently terminated-awaiting exocet missile!)

 

What it should state is:

"You should be aware that if we take you to court and get a judgment against you requiring you to pay us the money you owe us under the agreement, you may have to pay us both the amount of the judgment (and interest under the agreement on all the sums owed by you at the date of the judgment)until you have paid these in full. This means that even if you pay off the whole amount of the judgment, you may still have a further sum to pay."

 

In mine the text in red is missing. There is also no signature or name, just the Bank name and it was issued while in default of a CCA request.

How relevant is the above, does it render it invalid? Or would a judge just shrug and arch one hirsute eyebrow in scorn?

Your comments welcome.....

Elsa x

Edited March 16, 2010 by Undercover-Elsa

[hannahbtw]

Subbing.

Great idea Nurse-Elsa..will be lovely to have all relevant DN info in one post

 

Hannah x

[diamondgirl]

I will have a read of these links over the weekend as I don't have time at the moment. Thank you for these links Elsa and have a good bank holiday.

DG x

[joemay]

Subbing, great idea Elsa

Joemay:)

[summerbreeze]

This is such a good idea

 

I really would like to find any info or links to information and legislation for the situation where there is one or more penalty charges in the amount demanded on the DN

 

Can anyone help with that ?

Edited May 22, 2009 by summerbreeze
spelling

[robinredbreast]

Thanks Nursey ...

 

Just what I needed to help me....

 

Currently 1 DN recd from both Mint and M&S, so will have a look through everything and see if they fall foul ...

 

Could I ask anyone who knows - if a DN is faulty, do you let the DN expire (and I suppose have a default lodged), and then challenge them or do you challenge them before DN expires?

 

Also, are there any challenge letters on here that someone could post up, as that would be so helpful to everyone who needs to indeed challenge a faulty DN and doesn't know where to start. (poss me for one ..!!!!)

 

Thanks for strating the thread Nursey .. you're a star !!!

 

Robin xxx

[Undercover-Elsa]

Thanks for all your lovely comments!

Robin - if you're not able to pay and/or you dispute the debt then it's your call about the DN. If it's faulty I see no need to inform them:rolleyes:. They are the sophisticated financial institutions after all, and should know the law!

Elsa x

[willtheywontthey]

good idea.. there's just so many scattered posts that I find it so difficult to find out the 'real' facts.. so many opinions (for which I am grateful!) but I still do not know what is fact or opinion many a time!

 

Could you keep first post updated somehow (the edit facility used to go awol after a while unfortunately) so that the very first post of yours always has the most up-to-date and verified information.

 

What I'd also like to know would be:

 

1. whether they have to state a DATE or not.. ie they could give 21 days from date of letter BUT not give a date... where does this leave us??

 

2. When Consumer Credit Act (87 + 88?) mention something about a default notice should be given before account could be terminated or payment in full requested .. what do they actually mean - a default noted on credit files or a simple Default Notice letter sent saying 'okay us by x date or else'?? What if they do not do this - cannot see anything in Act that says what should happen if they fall foul of this 87/88 requirement?

[Undercover-Elsa]

Morning willtheywontthey,

I'll do my best to keep it all updated.

I'm not sure of the answer to question one, could anyone elaborate on that?

With regard to question 2, it refers to a statutory Default Notice letter not a default placed on CRA file.

Here's a great link courtesy of Car2403 which explains the difference:

http://www.consumeractiongroup.co.uk/forum/show-post/post-2060317.html

 

Hope this helps,

Elsa x

[GamekeeperToPoacher]

WTWT

 

I am informed that they HAVE to quote a date NOT x days

See here Courtesy 42Man (Actually it's courtesy of PT2537:))

 

 

GK

 

Apologies all round:-(

Edited May 23, 2009 by GamekeeperToPoacher

[Undercover-Elsa]

Thanks for that GTP

No apologies needed!!!!

I've been scouring the interweb since early this morning re DNs but then I got a nasty blackout (PC not me!) then a BSOD everty time I restarted with the dreaded unmountable_boot_volume message.so I've been gnashing my teeth sorting it out. All fixed now touch wood

Elsa x

[freakyleaky]

 

Apologies all round:-(

No appologies needed. Just me being picky

[meerkatsmimm]

This is a great thread Elsa,

 

Did you find anything on your travels refering to DN, Terminated accounts and Overdrafts as opposed to CC's?

 

meerkat x

[lafey]

I think a DN may have saved my day on a case that should be going to court soon . They posted it to address A and are saying that was the current address they had for me . But when i got statements they had sent a statement to address B ( correct one ) one day earlier !!! .... Good news i hope !!!

[Undercover-Elsa]

Not so far Meerkatsmimm, but I'll keep an eye open in my virtual travels!!

I'd just got really stuck in this morning, had a lightbulb moment about the whole thing and started getting it all down in Word..then crashed!!! Arghhhh. My heads spinning.

[cashins]

This has jogged my mind on an idea that came to me the other day - but promptly forgot!

 

In the case where a default notice is defective (and hopefully the CCA is terminated), what implications does this have for the defaults registered with the DCA's?

 

David

[Undercover-Elsa]

Then you can argue that without a valid agreement/DN they should stop processing your data...but you may still have a battle on your hands, from what I've read on here.

Elsa x

[Spamalot]

Hiya Nursie

 

I've read just about every link going on DNs and confused myself rotten:confused: can you see if you can make sense of this one please..

 

Dated 14.3.08 (FRI)........remedy 31.3.08..(bearing in mind Easter was early that year and slap bang in the middle of that fortnight!)

 

Nature of Breach.....failed to pay minimum monthly payments of £8973.92

Action required to remedy....payment of arrears of 8973.92 by 31.3.08.

 

The amount stated in Breach and action was actually the entire outstanding balance...which they say they will demand if I don't remedy!

 

Have they in fact accidently terminated the agreement by asking for full amount as arrears?

 

If that is the case and the agreement was terminated were they then in a position to sell the agreement to a third party?

 

What are your thoughts....I'd be interested to know

 

Thanx..Spam

[banker_rhymes_with]

Hello Spamalot!

 

Have they in fact accidently terminated the agreement by asking for full amount as arrears?

Sounds like it!

 

If that is the case and the agreement was terminated were they then in a position to sell the agreement to a third party?

Assuming they had a valid Agreement (properly executed Regulated Credit Card/Loan Agreement), then they can sell it, but they can only sell the rights they themselves had at the time of sale...

 

...having blown their rights to enjoy s87 by Terminating on the back of an invalid Default Notice, then they can only sell the rights to any sums that were due before the Agreement was Terminated.

 

In this case, that would be just the sums already due, i.e. the lawful Arrears. That would not include any Unlawful Charges and/or mis-sold PPI etc. No valid Agreement, then the DCA can bend over and kiss goodbye to them as well.

 

[Click this link to read the whole of The Consumer Credit Act 1974].

 

Cheers,

BRW

[GamekeeperToPoacher]

Hi Spam,

As far as I can see the DN was faulty on a number of counts:

 

The dates are wrong 14-31 does not allow for weekends.

 

Also when they demanded the balance of the account they were seeking future payments I assume unless this DN was issued after the agreement should have terminated when the balance would equal the arrears.

 

WRT the latter point I am sorry I am unable to reply but someone is probably answering that as I type LOL

 

 

GK

[Undercover-Elsa]

Indeed they were..thanks BRW and GK

Could I beg your comments on my own teensy query??

To start the ball rolling, my own query on the finer points is that I received a DN with a chunk of text missing from one of the prescribed paragraphs. (Account subsequently terminated-awaiting exocet missile!)

 

What it should state is:

"You should be aware that if we take you to court and get a judgment against you requiring you to pay us the money you owe us under the agreement, you may have to pay us both the amount of the judgment (and interest under the agreement on all the sums owed by you at the date of the judgment)until you have paid these in full. This means that even if you pay off the whole amount of the judgment, you may still have a further sum to pay."

 

In mine the text in red is missing. There is also no signature or name, just the Bank name and it was issued while in default of a CCA request.

How relevant is the above, does it render it invalid? Or would a judge just shrug and arch one hirsute eyebrow in scorn?

 

Thanks for looking

Elsa x

[Spamalot]

Thanks guys.

 

Bless their cotton socks. I'm actually still waiting to catch sight of the agreement...It seems to be proving rather elusive!

 

I'm just gathering as much ammo as poss to get a CCJ set aside and then a decent defence if and when.

The way things are going I may actually enjoy my day in court!!

 

Cheers. Spam x

[Spamalot]

Hi nursie,

I can't help with your query but I do have another link to add to your collection.

 

Apologies if you already have it

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/179944-default-notice-period-7-a.html#post1962004

[banker_rhymes_with]

Hello Elsa!

 

The key I think is that they were in default of your Consumer Credit Act 1974 Request at the time that they issued the s87(1) Default Notice.

 

Assuming it was a Credit Card, then you would've made a s78(1) Request.

 

If they failed to respond to that, then they would've been constrained from taking any enforcement action via s78(6) whilst they remain in default of your Request.

 

78

 

(6) If the creditor under an agreement fails to comply with subsection (1)—

 

(a) he is not entitled, while the default continues, to enforce the agreement...

The Prescribed wording for a Default Notice is set out in Statutory Instrument SI 1983/1561:

Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561)

 

CAG Link for above is:

 

http://www.consumeractiongroup.co.uk/forum/attachment.php?attachmentid=1411&d=1193876108

 

Specifically, take note of the following Prescribed wording:

 

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH

Thus, the Default Notice must be enforcement action for any additional action to be regarded as FURTHER ENFORCEMENT ACTION.

 

So, if they issued a Default Notice whilst constrained via s78(6), then you can point out to the Judge s78 and s87 of the Act, and then point out the above Prescribed wording as outlined by SI 1983/1561.

 

Any Default Notice issued whilst they were constrained via s78(6) of the Act should therefore be disregarded.

 

The key thing to remember is you must understand the issues, and be able to argue them when the time comes. Make sure you have all the documents you might need at your fingertips and, if this goes to Court, make sure you list all of the Acts and Statutory Instruments in your Disclosure by List so that you can refer to them in Court.

 

Second line of attack, is to rubbish any Default Notice they did issue, and try to show that is defective in any event. The issues there I think have been covered in the above links, but boil down to the Statutory Time allowed, the Prescribed wording, the exact nature of the terms you have breached, the exact default sum you must pay etc (no unlawful charges or mis-sold PPI etc).

 

I hope this helps.

 

Cheers,

BRW

[Undercover-Elsa]

Hey Spammie

Good one..thanks for that!

I keep coming back in from the garden..its sooo hot out there!

Am home alone till tomorrow as my OH has gone to a Christening/ family reunion and I'm dog sitting (much prefer dog sitting and noodling on computer/in garden anyway!) but it would have been nice to be beside the seaside today!