Fluffystuff's OH & MBNA

[seriously fed up]

the bit about credit limit - "we will chose this and advise" - is, as I understand it, ok, as while it doesnt tell you what it is, it does tell you how it will be determined and that is satisfactory. I think the interest rate can be shown annually, though they can get themselves in a knot over cash withdrawel interest. There will be a "commission" fee (2% in this case), which is basically just another charge. Egg have got themselves in a bit of a knot about this, as the APR should be the cost, but the apr is what they will charge you interest, and then the commission goes on top - and of course if you dont pay it back, they charge interest on the commission. But no, I wouldnt like to explain that one in Court.

What is more interesting to me is the lack of any signature on their part. If this was the outcome of a S77 request then they can get away with sending you "another document with the main terms"| (hence the argument that is often put by them that what they send doenst have to have the debtor's sig), so an application form at that stage may well be ok. But if they are going to take this as far as court, them my understanding is that "another document" is not satisfactory. They (the creditor) have to come up with the real thing - ie the original agreement (ie they have to show what the original agreement was) - and it seems to me that they face two problems here:

 

1. the creditor hasnt signed it. For there to be an agreement, I would have thought that there needed to be two sides and thus two sigs. Many lenders do this - though I have at least two examples where the lender couldnt be arsed to put a mark in their box.
   
2. more contentiously, there is the problem of s59 of the CCA. This says "59.—(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.". Now what I take from this is that to present an application form as an executed agreement is just not on - or to use the phrase in the above it is VOID. There is an interesting discussion about this in another place - Moneysupermarket.com - Making a Claim. And as they say there, what does an application form prove except that I applied for a credit card. Of course not every lender behaves in this way (though many of them do/did). I think that what the CCA intended was that "prospective" debtor puts in application to be considered by lender. At this stage the lender offers up the T&Cs that will apply should the legal relationship be consummated. If the lender goes ahead with the loan then there should be an agreement signed by both that includes the terms and conditions as set out in the 1983 regulations. One of the few who have done this is Egg, though they arguably made a bit of a Horlicks of the document signed at the second stage. What MBNA have sent you is clearly an appliction, though it doesnt helpfully say this at the top of the page (though many do). It does though, to take one example, say "APPLICANTS must be UK residents and over 18"
   

Would anyone with more knowledge than I care to comment on this one. There does seem to be some debate over this. I have seen this view denied by pt2537 somewhere on this sitek, but it doesnt seem to be the view elsewhere.

It is clear that in reply to a s77 request they can send out another document with the relevant T&Cs, but if they proceed to court they should produce the real thing. An application form wont do as its (by definition, I would have thought) pre-contractual and thus void under s59. And if they have anything other than the application form, why wouldnt they send it?

Edited August 22, 2009 by seriously fed up

[seriously fed up]

So they havent done a DN or a TN. Interestingly I am having this with Vanquis (well Cabot really because not only no DN or TN but they have sold it as well), but someone I have been trying to help with a case involving RBS has had the same thing with them - no DN or TN but straight off to court.

There is loads of stuff on this site about what to do about dodgy notices (or either type) but I am really struggling to find anything about the legal consequences of NO default or termination notice. Does any one out there have any ideas - or even direct me at where to look?

Thanks

SFU

[seriously fed up]

Maybe MBNA usually do - but can they prove it? They usually send them ordinary post for instance

[seriously fed up]

I dont think much has changed that from what you say in today's post you are likely to rely on. I suppose the main area would be the application form aspect. On the one hand Carey v HSBC allows creditors to send a reconstruction - but ONLY for the purpose of s77 - for enforcement (ie s61 1a) they should still produce the original, and from having had a quick look through this thread it seems unlikely that they will be able to do this. google Harrison v Link to see the problems that MBNA can cause those they sell their accounts to. The fact that what they have presented is clearly a mock up remains a strong and valid point for you and unless they can find a way round/past it, I would have thought they are sunk. The manner in which they defaulted - and in particular sold the account before the default notice had expired - is a killer point as well for you as far as I can see.

The only other major thing that I can think of that has been mentioned in your thread is that the s59 argument has been knocked on the head by the courts. Other than that, since you are able to rely on the 1974 Act, things are much as they were, I think.

[seriously fed up]

Starting at the end, absolute assignment, I think, sells the whole thing - lock, stock and barrel - to the dca. Equitable is somewhat less, but I am not entirely sure.

I would certainly go after them for the DN, and the fact they sold before you had time to remedy. Notice of assignment is a bit vague. Creditors argue that its enough for them to write to you and tell you your debt has been transferred to them - Cabot's hello letter for instance. But, if I wrote to you to say your debt has been sold to me, why should I believe you. But if they have screwed the DN by not giving enough time to remedy AND sold before the (overly short) time they have given you to remedy, then those are strong points.

I would though still go after them about the application form/ agreement with all the points that you and Vint raised about it being a reconstruction. They may not attempt to defend that, but if they came up with such a duff reconstruction it might be that they have a problem finding an enforceable version of the agreement. This is why you need to read Harrison v Link, because he tied MBNA in knots about what type of agreement he is supposed to have signed (in fact, if you are an optimist, if they see you refer to the Harrison case, it might just be enough to get them to go away and leave you alone). Remember that what they sent you three years or so ago was in response to a s77 request (what Waksman called "the information purpose" in Carey). But now they are seeking to enforce in court, its s61 1a that they have to worry about and the onus of proof here in on them to show that your OH did sign an enforceable agreement. Read Harrison (you can get it here http://www.bailii.org/ew/cases/EWHC/Mercantile/2011/B3.html) but when you do, remember since Harrison brought the case the onus of proof was on him to prove he didnt sign an enforceable agreement. In your case the onus of proof is on them to show that your OH did sign an enforceable agreement, and in this respect HHJ Chambers statement that "Entirely understandably, the Defendant's evidence given through MBNA is of the "would have" variety. "We would have sent the terms & conditions because that is what we were required to do and our systems would have been designed to do". But there was evidence neither of the system nor its implementation." is telling.

Were I you, my defence would be based on both heads - unenforceable agreement and defective DN.