Halifax Current Account- Is this a defective Default Notice? Help please!

[car2403]

I agree with Andy, in this instance.

 

Lets see if this helps explain why;

 

To help clarify these matters, this is an extract from a Court case (Coutts & Co v Gabriel Oscar Alan Sebestyen [2005] EWCA Civ 473.) and is part of the summing up by the Judge in relation to the effect on overdrafts and the function of the CCA in such circumstances;

 

“The Defendant provided an overdraft on the account;

 

 

The agreement was a regulated debtor-creditor agreement within the meaning of s.8 and s.13© of the Consumer Credit Act 1974, providing for 'running-account credit' within the meaning of s.10(1)(a) of the Act (in effect, a revolving credit within an agreed credit limit); and

That, as such, it was subject to the requirements of Part V of the Act (including the requirements as to documentation set out in sections 57 to 63 of the Act) save and in so far as it was excluded or exempted from such requirements.

 

Section 65 in Part V of the Act provides that an "improperly executed" regulated agreement is unenforceable by the creditor without a court order. It is common ground that a regulated agreement is "improperly executed" for this purpose if the requirements of sections 57 to 63 have not been complied with.

 

Section 74 of the Act provides for the exclusion of certain agreements from Part V. It provides as follows (so far as material):

"74. – (1) This part …. does not apply to –

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, …

(3) Subsection 1(b) … applies only where the OFT so determines, and such a determination –

(a) may be made subject to such conditions as the OFT thinks fit …

(3A) …. in relation to a debtor-creditor agreement under which the creditor is …. a bank …. the OFT shall make a determination that subsection 1(b) above applies unless it considers that it would be against the public interest to do so.

 

THE DETERMINATION:

 

The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:

 

"1. Under the powers conferred upon me by s.74(3) and (3A) and s.133 of the Consumer Credit Act 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.

 

2. This Determination is made subject to the following conditions:-

(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;

(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded:

- of the credit limit, if any,

- of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,

- of the procedure for terminating the agreement;

and this information shall be confirmed in writing.

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing not later than 7 days after the end of that 3 month period of the annual rate of interest and charges applicable.

 

3. In this Determination the terms 'creditor' and 'debtor' shall have the meanings assigned to them respectively by Section 189 of [the Act]. The term 'bank' includes the Bank of England and banks within the meaning of the Bankers' Books Evidence Act 1879 as amended."

 

The Claimant avers that the OFT Determination applies in the current proceedings and that the Defendant has failed to satisfy the conditions laid down to benefit from such Determination, the effect of which is that the Defendant must be able to show that the agreement complies with the form and content requirement of Part V of the CCA 1974, specifically s.60 and s.61 of the Act.

 

The important bit here is highlighted in red

So, we know that Overdrafts are exempt from Part V of the Act, but they are also, by virtue of Coutts interpretation of the s.74 Determination exempt from the requirement to comply with s.87 (and therefore s.88) by the fact that the parties agree how the agreement will be terminated as a pre-contractrual negotiation, or at least one that takes place shortly after the agreement (overdraft) is entered in to.

 

If the parties agree that the Bank will send the Customer a packet of Marlboro Lights (other brands available!) then the Bank must sent them a packet of those to terminate the agreement.

 

In essence, Default Notices would only be required under the agreement, if they agreement says that one is needed for the Bank to terminate. A Default Notice compliant with s.87/s.88 (i.e., needed under the Act to terminate) is not required to terminate an overdraft agreement.

 

Usually, the overdraft agreement will require a termination notice to be issued, giving the customer a specified period of time to repay the debt in full before termination.

 

I can see why people are confused, but you need to put the requirements of the CCA that overdrafts are exempt from out of your mind to get your head around this one...

 

HTH

[car2403]

Yes, but in both scenarios the Bank doesn't need an overdraft if one isn't required by the agreement itself.

 

In short, the Banks hold all the cards with overdrafts and you should stay away from them if at all possible. (Like with a Basic Bank Account, or one with limited credit facilities available)

 

Easy for me to say when we all know that credit (and overdrafts!) make the World go around!

 

The good news? There's a very good chance your overdraft is completely unenforceable!

 

http://www.consumeractiongroup.co.uk/forum/barclays-bank/110184-car2403-barclays-bank-default.html

[car2403]

If they can't show they complied with the OFT Determination, (i.e., they didn't send you the right documentation when you entered in to the agreement) the debt could be unenforceable. (Just as mine arguably was, although my dispute was resolved before we actually got a Judgment )

[car2403]

Car, which of your threads relates to the above? Be interesting to have a look as Nwest are now taking us to court, with a similar scenario to 3tea's.

 

thanks,

 

Magda

 

The one linked in post #39

[car2403]

If the above is correct and there is no signed agreement in place, surely they cannot register anything with CRA's due to the sheer fact that YOU didn't agree to them processing your data?

 

Is this correct?

 

Thanks

Scrapper Coco:cool:

 

If only!

 

Consent to process data is more than just having a signed, enforceable agreement, I'm afraid.

 

There's a leaflet and technical guidance on how the DPA applies to these principles from the ICO, if you're interested.