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Effect of Setting Aside a Statutory Demand


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Default page break (1) I am posting this in a Consumer thread about Mobile Phone charges and one about Credit References as well as here, as the issues are quite wide ranging. Any views/advice welcomed.

 

My partner and I have been disputing liability since 2004 with Orange for mobile phone charges of £1000 incurred when my phone was stolen.

 

We maintain that the express term on which Orange relies does not in fact allow them to recover charges from us, alternatively that if the term has that effect it is is an unfair term within the meaning of Regulation 5 Unfair Terms in Consumer Contracts Regulations 1999. As such it is not binding on us as consumers pursuant to Regulation 8 of those Regulations.

 

We await the final outcome of the Banks case on the UTCCR with interest but in the meantime there is a jolly helpful case of Foxtons which gives us some comfort too. (See link to summary of case at OFT website The Office of Fair Trading: OFT welcomes high court ruling on Foxtons' use of unfair terms)

 

We are quite content to litigate out our issue in the county court and have put our opponent and the various DCAs they have engaged as their agents, or assignees of the debt fully on notice of the basis on which we dispute the debt. We have no problem financial or otherwise about paying the sum claimed if we suffer a CCJ against us (if, say, we decide to accept it rather than appeal…)

 

However neither Orange nor any of their agents or assignees have engaged. One of them has however now personally served a statutory demand on my OH for bankruptcy, so we have applied to the High Court to set it aside on grounds that the debt is disputed.

 

I’ll check back into the forum when the set aside application has been dealt with and let people know the outcome.

 

MEANWHILE….

 

I would really appreciate some advice on the following.

 

1. Effect of a set aside

 

If our application to set aside the statutory demand is successful does that operate to prevent the DCA or any other assignee of the debt from issuing another one in respect of the same matter (short of getting an unsatisfied CCJ…)

 

If they purport to withdraw the SD what is the effect of that on their ability to come at us again by another SD. And is the best course of action faced with a withdrawal to press ahead to get the SD formally set aside?

 

Does a set aside of a SD raise any kind of issue estoppel against them starting county court proceedings against us in respect of the debt? (My guess is that it does not).

 

2. Abuse of process/unfair debt collection when the debt is disputed

 

We would like some effective strategies for dealing with what we regard as the DCA’s abuse of process in issuing a statutory demand when they know full well that the debt is disputed.

 

They claim in the statutory demand that to the best of their knowledge the debt is not disputed. However Orange, 3 DCAs and one of the DCAs solicitors (all of whom acted as Orange’s agents) were all put fully on notice of the basis on which we disputed the debt. We had countless threats of legal action and etc, to which we responded “Please sue us then we will defend”. But none of them did…

 

After the assignment the Assignee-DCA instructed another DCA as its agent to chase us and we cheerfully sent the whole dispute file to them. And we can see that the Assignee-DCA has done CRA checks as well as re-registering the “default” and can presumably be expected to be on notice of the notice of correction stating that the debt is disputed.

 

If we seek our costs on the set aside is it legitimate to ask them to pay our costs of dealing with such enquiries as they made prior to going for the SD. I would like to recover costs in relation to our earlier correspondence with the current DCA-Assignee and their agents as they maintain in their SD without good cause that we have not notified them of our dispute!

 

I have had a careful look at the OFT’s guidance on good practice in the collection of debts, and its frankly weak on the question of chasing people for debts which are genuinely disputed. I set out the relevant guidance below but the question I want help with is

 

Is it worth a complaint to the OFT of an unfair business practice of serving us with an SD when they know the demand is disputed? Does anyone know if they would venture into territory of issuing guidance that an SD should not be served if there is a genuine dispute notified?

The OFT helpful guidance was this…:-

Deceptive and/or unfair methods

2.7 Dealings with debtors are not to be deceitful and/or unfair.

2.8 Examples of unfair practices are as follows:

k. not ceasing collection activity whilst investigating a reasonably queried or disputed debt.

Note that our original telephone service agreement was probably not a CCA agreement – we haven’t managed to see it yet! But all of the actions of the DCAs and the current Assignee-DCA would appear to be covered as they operate under CCA licences.

This is the remit of the OFT as per the Guidance on Debt collecting..

1 INTRODUCTION

1.1 The Office of Fair Trading (OFT) has a duty under the Consumer Credit Act 1974

to ensure that licences are only given to and retained by those who are fit to hold

them. The Act provides that the OFT take into account any circumstances which appear to be relevant and in particular any evidence that an applicant, licensee, or their employees, agents or business associates, past or present, have:

• committed offences involving fraud, or other dishonesty or violence

• failed to comply with the requirements of credit or other consumer legislation

• practised discrimination in connection with their business

• engaged in business practices appearing to us to be deceitful, oppressive or otherwise unfair or improper (whether unlawful or not).

1.2 Where the OFT has evidence we can take action to refuse or revoke the credit licences of those concerned. This includes evidence that a creditor or debt collector, or any tracing agency engaged on their behalf, has contravened section 55 of the Data Protection Act 1998 by knowingly or recklessly obtaining, disclosing or procuring the unlawful disclosure of personal data without the informed consent of the organisation holding the data.

1.3 The OFT issued general consumer credit licence guidance to holders and applicants in February 2001. This included guidance on debt collection practices. At the time we indicated our aim to issue further guidance for specific market sectors where problems have been identified or where a more detailed consideration of particular market circumstances would be helpful.

1.4 This guidance expands, clarifies and incorporates past OFT guidance and reflects as appropriate responses to our November 2002 consultation paper entitled Debt collection guidance for consumer credit licence holders and applicants. This version of the guidance updates the guidance issued by the OFT in July 2003.

What is the purpose of the guidance?

1.5 This guidance is intended to set out the type of behaviour the OFT considers to fall

within the category of unfair business practices which will call into question fitness to retain or be given a licence. It is expected that applicants and licence holders will abide by the spirit as well as the letter of this guidance. Publication of this guidance will also enable the OFT to take speedier action against behaviour that clearly falls into the type of categories of unfair practices shown.

1.6 This guidance is not designed to be a comprehensive checklist of behaviour. Nor are we advising on best practice or a code of practice. The guidance outlines unfair practices with illustrative examples. The examples given are based on OFT complaint information and issues brought to our attention by organisations representing consumers, business and other regulators.

Who does this guidance apply to?

1.7 This guidance applies to all consumer credit licence holders and applicants.

3. Cleaning up the CRA listing

 

The final issue is the default notice sitting on the records held by all the CRAs. My OH has exercised his right to place a notice of correction there but was not allowed to file it in the form he would wish to. It means that every application for credit gets queried and this puts us to a lot of time and effort to overcome.

 

He attempted a dispute with one of the CRAs over this, but then let it go. However the Assignee-DCA have re-registered a “default” and I think they have ****ed us off enough by serving a SD for us to not let it rest this time.

 

I have now found on this site (thanks!) the Information Commissioners Data Protection Technical Guidance on filing defaults with credit reference agencies.

 

In connection with this I wonder if anyone has any words of wisdom about the relevance of our failure to pay a disputed debt not being a “default” within the meaning of the CCA as this does not apply to an ordinary service agreement. Does anyone know if the IC’s technical guidance applies here as well as to CCA defaults, or whether there is other guidance of relevance.

 

I wanted to have a look at the scope of the consent to processing our data (if any) which we gave to Orange when (and if) we signed to their contract. We don’t have a copy and who knows what will be revealed by the SARS enquiries made about this. I have no idea also if any original contract allowed them to vary the terms of contract or only certain terms. I have noted that terms and conditions on Orange’s website on the scope of DP consent has varied between different versions of the TCs posted there, but no version is available there for our venerable agreement which apparently dates back to 2001. I also wondered if, while it may be permissible for an institution to vary terms as to payment, service levels and etc assuming a suitably drafted variation clause, it would be reasonable for them to purport to vary the terms of a consent to processing personal data as this is governed by DPA considerations.

 

Still I very much doubt that the Assignee-DCA can produce any evidence at all about what consent we gave, let alone what it means, so we can tie them up in knots for a while over this.

 

So my plan is to follow through procedures with all of the CRFs and with the Assignee-DCA and see what happens and we will also notify the Assignee-DCA that we do not accept that any consent given to data processing covers the registration they have made as well as withdrawing such consent as was given.

 

Any input gratefully received on any of this!

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