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Please help... clarifications needed

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Hi all, i am in need of clarifications, regarding running account credit agreement.


Parties me, (PS), finace company (A) and services company (B).


so the story: PS contact B for provision of services... B says yes, no problem, but it will cost ££££££. PS accept the offer.

The payments are taken by A, and when PS misses 1 payment, A sends a default notice under s.87(1) CCA 1974. So PS write to A (19/06 recorded delivery) with proposal of remedy to default and dispute default notice.

Today PS receives a letter from B (in A's envelope )saying B have arranged a Running Account (credit agreement ref: xyzt)for me to pay A for the services provided by B.



Confusing? yeah i bet i is.... now PS have not signed such Running Account Credit agreement, nor was aware of one of this needed.

as far as PS concerned, A was collecting PS payments on B behalf.


So Clarification time:

Should PS have a signed credit agreement for a running account?

If not is A allowed to issue a default notice without a contract?

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The answers are 1)Yes and 2) No. You are not bound to any agreement unless you have agreed the prescribed terms and signed an agreement drawn up in keeping with the Consumer Credit Act and you cannot be defaulted on what is a non-existent agreement.

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Thanks pinky so just to recap....


is PS right to assume that the default notice is invalid, and should A or B terminate the contract under that default notice... Both A and B have breached the contract?


Thanks again for your help.

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They haven't breached a credit agreement - there isn't one. I don't know why a finance company was collecting what was essentially a bill for services. You need to ask B for a copy of the contract for services so you know exactly what is going on with both A and B.

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