MBNA - say defaulted me but send a default notice???

[nuke em]

I'm shocked to be honest, that they are allowed to flaunt the law like this. They do because no-one takes them to task over it

I've been reading this excellent forum for months now and thought I'd learned the major points but this is news to me, so I'm glad I stumbled on this thread.

Good!

So, if we are going through the CCA route, and they look like they dont have one (which appears to be the case with cards I have with Barclaycard and MBNA), chances are they will sell on to a DCA, and that should be the end of it? Obviously, its in our interests that they do sell on. Correct a mundo!

 

BF

 

please don't tell Sybil this !

[vint1954]

From x20 on termination. It can be requesting ballance in full.

 

My fellow Caggers, back to the general issue ..

 

May be it was my doing or we've just hung on to this word 'termination' like Rotweillers. The thing is, at least as I see it is, that where a creditor seeks early repayment or the return of goods following service of an ineffective DN, he is by his words and conduct expressing in clear terms that he is no longer willing to perform the essential obligations he promised to provide under the credit agreement. True, these words and conduct ride on the back of the debtor's failure to perform the debtor's essential obligations. But in this event the creditor has only to follow the procedure laid out in the Act and Regulations. And the Act says unless and until he has met the requirements of the Act and the Regulations, he acquires no such entitlement. Accordingly, to withdraw from the debtor the right to pay sums due by instalments or withdraw the right to continue with possession of the goods is to withdraw in breach of the statutory code which regulates the agreement.

 

The withdrawal of the debtor's rights may in one person's parlance be the same as the creditor's termination of the agreement. Just like 'default' in the words of one person may amount to 'breach' in the words of another. Or 'repudiatory breach' in the language of lawyer A is 'renunciation' in the language of lawyer B. Let's say though, for the purpose of the stream of thinking which follows, that strictly and legally speaking, withdrawal of these rights in default (or breach) isn't a termination of the agreement and that for termination strictly so called to have occured, the creditor miut have served a notice of termination. Does that mean therefore that the creditor's withdrawal and demand for early payment and/or return of goods is something the court can waive? Something the debtor can be expected to have understood was a mistake and unintended? That it is of no consequence?

 

I've got Chitty on Contracts General Principles (26th Edition) (1991). A bit out of date but good enough on General Principles I would have thought. And I'd thought I'd open it. Always a good idea when examining the contractual relationship of parties. Interestingly, 'termination' does not have an entry of its own in the umpteen page index at the back. It says in relation to Renunciation (and if you look up Repudiatory Breach it refers to to the same page number) that:

A renunciation of a contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligastions under the contract in some essential respect. An absolute refusal by one party to perform his side of the contract will entitle the other party to treat himself as discharged, as will also a clear and unambiguous assertion by one party that he will be unable to perform when the time for performance should arrive. Short of such an express refusal or declaration however, the test is to ascertain whether the action or actions of the party in default are such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. The renunciation is then evidenced by conduct. Also, the party in default 'may intend in fact to fulfil (the contract) but may be determined to do so only in a manner substantially inconsistent with his obligations' [Federal Commerce & Navigation Co Limited v Molena Alpha Inc (1979)] or may refuse to perform the contract unless the other party complies with certain conditions not required by its terms. In such a case, there is little difficulty in holding that the contract has been renounced.

 

If one party evinces an intention not to perform or declares his inability to perform some but not all of his obligations under the contract, then the right of the other party to treat himself as discharged depends upon whether the non-performance of those obligations will amount to a breach of a condition of the contract or deprive him of substantially the whole benefit which it was the intention of the parties that he should obtain from the obligations of the parties under the contract then remaining unperformed.

 

The renunciation must be made quite plain. In particular where there is a genuine dispute as to the construction of a contract, the courts may be unwilling to hold that an expression of intentino by one party to carry out the contract only in accordance with his own erroneous interpretation of it amounts to a repudiation and the same is truew of a genuine mistake of fact or law.

The demanding of early payment is to my way of thinking the immediate withdrawal of consent to all the remaining credit provided for under the agreement. Further, that it substantially deprives the debtor of the prime benefit he was to derive under it. Such a demand constitutes a breach of the regulated agreement save where it is demanded in compliance with the Act. If the demanding of such things is not tantamount to the creditor terminating the agreement, it is, nonetheless in my opinion, the creditor's renunciation of it. in consequence and in my opinion, the debtor may fairly regard himself as discharged from the agreement.

 

Chitty has this to say:

 

Consequences of Discharge - Effect on Contract

It has become usual to speak of the exercise by one party to treat himself as discharged as a 'recission' of the contract but as Lord Porter pointed out in Heymans v Darwin limited (1942):

'To say that the contract is rescinded or has come to an end or ceased to exist may in individual cases convey the truth with sufficient accuracy, but the fuller expresion that ther injured party is thereby absolved from future performance of his obligations under the contract is a more exact description of the position. Strictly speaking, to say that on acceptance of the renunciation of a contract the contract is rescinded is incorrect.'

This statement was unanimously approved by The House of Lords in Johnson v Agnew (1980) where Lord Wilberforce emphasised that this so-called 'recission' is quite different from recission ab initio as may arise for example in cases of mistake, fraud or lack of consent. It has also become usual to speak of the contract as having been 'terminated' or 'discharged' by the breach. Again however, these expressions may be somewhat misleading for they might suggest that the contract ceases forv all purposes to exist in that event. Such an approach was indeed adopted by the Court of Appeal in Harbutt's Plastercine Limited v Wayne Tank & Pymp Co (1970) so as to prevent the party in default from relying on an expemtion clause inserted in a contract which had been 'terminated' by breach. But this case was overruled by the House of Lords in Photo Production limited v Securicor Transport limited (1980). The true position was there stated to be, where the innocent party elects to terminate the contrsct, ie to put an end to all primary obligations of both parties remaining unperformed - that (per Lord Diplock) '(a) there is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay money compensation to the other party for the loss sustained by him in consequence of their non-performance in the future and (b) the unperformed primary obligations of that other party are discharged.'

Given Diplock's statement of the position, may be to describe the agreement as 'terminated' following the events we are describing is, to adopt the words of Lord Porter, '.. to convey the truth with sufficient accuracy.'

 

FURTER.

I am yet to be persuaded that in the context of a regulated consumer credit agreement and the receipt of an express notice or activity on the part of the creditor consistent with termination, that the agreement does not terminate unless and until the debtor signifies by word or deed that he accepts termination. The damned notice of termination says what it says.

 

For sure in those cases where the termination amounts to the anticipatory breach of the agreement by one of the parties to that agreement the law says the innocent party should elect either to accept the termination or inform the terminating party that he requires them to perform their obligations owing under the agreement. But we're not concerned with an anticipatory breach by the creditor. It's not as if the creditor having agreed to give credit has then decided not to loan after all. What the creditor is doing is calling in the loan he has already made ahead of the time when it would ordinarily have been repaid.

 

But in a regulated consumer credit agreement, what in reality can the court genuinely expect the innocent, ordinary and unsophisticated debtor to a consumer credit agreement, who is strapped for cash, do in response to the demands of the creditor? Write a letter saying 'I accept your repudiatory breach of contract'?. Of course not. Well I say of course not. That is a ludicrous expectation to hold. Was the Court of Appeal ever concerned to ascertain in Woodchester v Swayne & Co that Swayne had accepted Woodchester's termination on the back of their ineffective DN? Mais non. Swayne & Co had done nothing. Swayne & Co were a firm of solicitors in Cardiff for crissake. Yet they still were treated to the benefits of the Act as one intended for the protection of consumers. Swayne were, according to claue 9.1 of the terms of the agreement between Woodchester and Swayne, in repudiatory breach of contract, entitling Woodchester to immediately terminate the agreement. But all the same, Kennedy LJ held that the provisions of section 87 dictated what Woodchester were required to do in order for Woodchester to become entitled to claim early payment and demand the return of the photocopier let on hire under the agreement. This was regardless of what the agreement said.

 

Indeed in the context of activity, if Swayne & Co had paid some money to Woodchester they would have done themselves a favour because those payments would have been applied to the credit of the arrears.

 

I appreciate that counsel for banks are currently advancing that the absence of some clear acceptance on the part of the debtor operates to negate the meaning and intent of the creditor's express termination. The latest clever arguments seem to be that a DN is not required at all where the agreement has no fixed duration. But that's counsel pushing at the boundaries and thinking out the box in a novel way. All good lawyers do that. They invent and shape their arguments to distinguish their case from those which suggest they're on a loser so as to suit the requirements of their client. They have no idea as they're inventing and shaping that the argument they've conjured will succeed. But they sigh with relief when they appreciate their opponent is a LiP.

 

I do not buy in to the notion that unless the debtor is active or inactive in a way somewhat different to the way he was active or inactive prior to the termination, that the agreement has endured despite the delivery of an express notice of termination, or despite activity on the part of the creditor which is in keeping with the creditor having terminated the agreement. Remember this : when Woodchester v Swayne was first decided, before it got to the Court of Appeal, Assistant Recorder Higginbottom found for the creditor on the basis that

 

"A default notice served under Section 87 and Section 88 is not rendered defective merely because the action indicated as required to be taken to remedy the breach is in fact over and above the action necessary to remedy that breach."

 

The Assistant Recorder did not add 'and because the debtor had failed to serve a notice of acceptance of termination or had conducted itself in a way different to the way it had conducted itself before termination or before the creditor behaved as if the creditor had terminated.'

 

Kennedy regarded the Assistant Recorder's judgment 'as a model of clarity'. But he still found the decision was wrong. He held quite the reverse to the Assistant Recorder. He held the DN was rendered defective because the action indicated as required to be taken to remedy the breach was in fact over and above the action necessary to remedy that breach. He did not qualify that view by saying it was reached owing to the activity or inactivity of the debtor or that his view would have been different depending on what activity or inactivity there may have been on the part of Swayne & Co. As we know, because Swayne got hit with a judgment for the actual arrears, Swayne did nothing.

 

Woodchester v Swayne is still good law. Swayne & Co did the right thing. They were well placed to do the right thing. They were a firm of lawyers. The right thing they did was to appeal the decision. The result speaks for itself.

 

x20

[gezwee]

One question that arises from LJ Kennedys summing up is;

 

Can a debtor now contend that any default notice is innacurate due to the nature of financial institutions considerable application of unfair charges prior to reaching a default position?

[nuke em]

Contracts, Contracts, Contracts !. we operate in the sea of commerce, under contracts, that's the way forward!

[gezwee]

subbed

[nuke em]

Contracts, Contracts, Contracts !. we operate in the sea of commerce, under contracts, that's the way forward!

 

i mean ..challenge the Contract as in ...Show me the Contract

[alternative-answer]

A contract is entered into when you unwittingly give your name and address. When a DCA phones you, they first ask you for your name and then addresss which creates joinder. You have tacitly entered into agreement by giving both and so a contract is created between the two companies. Your name is actually a company. The basic premise is no name no contract, no contract, no ability to act upon you. It's the same for all areas of your life.

[nuke em]

A contract is entered into when you unwittingly give your name and address. When a DCA phones you, they first ask you for your name and then addresss which creates joinder. You have tacitly entered into agreement by giving both and so a contract is created between the two companies. Your name is actually a company. The basic premise is no name no contract, no contract, no ability to act upon you. It's the same for all areas of your life.

 

Correct Sir!

[willtheywontthey]

wow! So does it apply also in writing even if you state you do not acknowledge this or that, account in dispute etc?

 

Does this contract issue also apply at the end of the road when an OC / DCA has not got enforceable cca then as there'd be letters etc?

[alternative-answer]

Contracts are all about agreeing, if you dispute you are actually entering into dishonour, silence is also dishonour. You must always make offers to whoever has made a claim on you. As it says above, ask for proof of claim, you ask the questions of them, the burden of proof is always on them, not you. Turn it around to them, the way the credit [problem] is set up they probably won't be able to provide answers to the requests you make.

[nuke em]

wow! So does it apply also in writing even if you state you do not acknowledge this or that, account in dispute etc?

 

Does this contract issue also apply at the end of the road when an OC / DCA has not got enforceable cca then as there'd be letters etc?

 

You have to be careful, you could be saying you dont acknowledge 'this" but your silence on every other matter means you agree to everything else.

 

& remember silence = agreement

 

and agreement of the parties=contract

 

Always put anyone who claims anything from you to proof of that Claim , always answer/ask questions in writing or,

if anyone catches you unawares on the phone ( which you must always try and avoid)

 

Always respond with questions..

 

DCA: What is your name ?

You: what is your name?

 

DCA: What is your address ?

You: what is your address?

 

DCA: I need to confirm some security details

You: i need to confirm some security details myself

 

etc

[willtheywontthey]

thanks - I don't speak to them on phone (truecall, police complaint reference no and FOS finding scared them all OCs and all DCAs up to now away).

 

This is my first 'sold' account so am checking out as much as I can to make sure I do not mess up.

 

Not heard of DCAs and Ocs using this contract law approach though?

[nuke em]

They use it but don't tell you, in so far as they want you to contract with them, i guess even their numpty employees dont understand it.

 

That's why they want to to agree to pay any amount per month 'cos then they got you.

[alternative-answer]

OK; when you were born and your name was registered it created a person which is a legal fiction. Your name normaly in ALL CAPITAL LETTERS is a person. Only persons can be acted upon and the very moment you identify yourself to anyone as that person you have entered into agreement. Learn the difference between a person and a natural person here (edit\) Check this template for rebutting a DCA (edit) it is excellent...

Edited November 11, 2009 by freakyleaky
Unauthorized links removed

[nuke em]

also learn from

 

(edit)

 

Now you are cooking on gas.....

Edited November 11, 2009 by freakyleaky
Unauthorised link removed

[alternative-answer]

also learn from

 

(edit)

 

Now you are cooking on gas.....

Go slowly make sure you fully understand before attempting to apply.

Edited November 11, 2009 by freakyleaky
Unauthorized link removed from quote

[nuke em]

Go slowly make sure you fully understand before attempting to apply.

 

True, major learning curve ahead WTWT

[nuke em]

Here are today's important phrases to look for in google

 

Mary Elizebeth croft of (edit)

 

winston shrout

 

nouicor

 

 

learn, learn & then learn some more

Edited November 11, 2009 by freakyleaky
Unauthorized link removed

[willtheywontthey]

am lost already! Came across that site before and thought it was a BNP site!

[nuke em]

am lost already! Came across that site before and thought it was a BNP site!

 

 

which site?

[Winged Piglet]

Hi - have read with interest this thread as my OH has recieved a DN dated 12th August with remedy of breach 29th August demanding the whole amount. The DN is a joke as it states that they have already registered a default with credit reference agencies on the actual default notice (which they had on the 31st July!!) and no other DN had been sent which MBNA admit too. My opinion is that they have terminated the credit card agreement by demanding the whole amount and not just asking to remedy the breach by paying the arrears or missed monthly payments per agreement (which I have to say they don't have and have not produced). This DN was the only response to a request for a CCA. They even tried to tell me that they sent a charge off letter which they said is a DN - it is just a threatogram.

 

I have reported their activities to the Credit Fitness Team at the OFT and they have repsonded by wanting further info to investigate. I would urge anyone with these faulty DN's to contact OFT Credit Fitness team - you can e-mail as the more people making them aware, the more they will have to take note of their ridiculous underhand methods. I have been lied to by their staff telling me that the debt has been sold on (before they issued the DN) after many conversations, even the dca they told me they sold it to said it wasn' true!Finally they had to admit that they made a 'mistake' and that it hadn't. Do not take their word for anything being true MBNA are ruthless!

 

I personally take the view and will pursue this that if they are stupid enough to send an invalid DN and ask for the whole debt, then they have terminated the agreement therefore nothing is owed as it is an unlawful recission of contract. It says in my OH's one that they will terminate on or after the date which has now expired (which I may point out did not even give the 'not less than 14 days' required).

 

Written to eveyone in MBNA to complain as well as OFT above, and have finally got a repsonse saying that their complaints team is looking in to it. Meanwhile MBNA account disappeared without trace from credit files. Will update when get response but won't hold my breath!

 

Keep fighting them - I am not stopping until they get what they deserve!

[gezwee]

Having given this some further thought I am now of the opinion that MBNA have responded to previous defences to dodgy DN's.

 

They are not entitled to anything but arrears notified pre incorrectly applied DN. By applying DN at full balance they are hedging their bets for a compliant/flexible DJ at litigation awarding them full DN balance.

 

Just my opinion, but given thats its usually an assigned party that proceeds to court for MBNA accounts I'd rest more heavily on agreement, NOA and termination in instances such as this.

 

Any DCA in the meantime will be royally ignored if they try corresponding with an invalid agreement number.

 

Gez

[Winged Piglet]

If MBNA or a DCA took to court they would have to produce a compliant Default Notice plus compliant agreement (and NOA if a DCA) which without an agreement would be illegal as no proof of entitlement of third party rights to assign. So in the case of my OH it is going no where as they know we are on to them and have not sold it on but it remains 'inhouse' with their collection DCA who will not admit to any link to MBNA until the office junior pipes up to me that yes we are part of MBNA when manager had directly refuted suggestion earlier - ha ha!IF a court claim was brought this is seen in law as a definite termination of the agreement as the creditor is asking for the whole amount formally now. Using a defective DN and no agreement would go nowhere even with an unsympathetic DJ.

[gezwee]

Hi WP

 

I refer you to my comment above regarding compliant DJ, don't assume that every DJ is up to date with consumer law.

 

I know its wrong, you know its wrong ........ but you'd still need to convince the DJ on the day of the direction he/she should be taking.

 

If the Claimant provides a valid agreement and you argue that they have no recourse to claim any more than the arrears stated on the DN ...what then? Its a constant battle of wills and argument and can be very intimidating in chambers........ not disagreeing with you at all just making sure you have all of your argument in place and can hold your nerve on the day.

 

Gez

[willtheywontthey]

somehow got googled to the tpuc forum a few weeks back - ddn't read rest of site. Anyhow am sending off the contract 'prove it' letter to these Credite Experto lot. Am now wondering rationale ehind MBNA selling some to Link and some to Credite Expertos... ?