Spamheed vs Cabot **discontinued**

[PriorityOne]

It's s.189 of the Consumer Credit Act which defines Cabot as the creditor by absolute assignment.... and makes it quite clear that it's an assignment of rights and duties.

[PriorityOne]

Ok, I've read the link; written by Cabot for Credit Management.... Part of the article is below. My emphasis on their words in bold... my own words in orange:

 

There are also popular misconceptions about the rights and obligations of debt purchase companies under the Consumer Credit Act. We do not believe that debt purchasers fall within the definition of "creditor" in section 189(1) of the Consumer Credit Act, because they take assignments of the rights, but not the duties, of creditors under consumer credit agreements: they collect the debts, but they do not themselves lend money. We believe that the Government’s decision to create a new category of business for which a licence is to be required, namely debt administration, when the Act is amended in April 2008, reflects the fact that debt administration companies are not creditors for the purposes of the Act. (When explaining the new category of licence during parliamentary debate, the Under-Secretary of State for Trade and Industry said that the category was intended to cover those who "purchase portfolios of existing loans and administer them".) Buying an account by Absolute Assignment is not "administering" them... there's some confusion here..... However, the fact that in our view debt purchase companies are not creditors does not mean that they are not entitled to enforce the debts that have been assigned to them, or which, in laymen’s terms, they have bought. As a legal assignee, under section 136 of the Law of Property Act 1925, a company which has bought a creditor’s rights under a credit agreement is entitled to sue the debtor for any repayment that remains due under the agreement. Presuming that they have that Agreement (CCA, 1974; s127(3)

 

It is worth pointing out that the Citizen’s Advice Bureau is currently pursuing a series of court cases which challenge the right of the debt purchasers to enforce regulated debts through the courts. The CAB’s argument appears to be that according to the definition of "creditor" under section 189 of the CCA, a purchaser must prove he has acquired the duties as well as the rights to a consumer credit agreement. This is an interesting assertion, but misses the point entirely on the basis that a debt purchaser needs only to be a legal assignee to enforce the credit agreement, which it is as soon as written notice of the assignment is given to the debtor. In my view, the actions of the CAB in these cases are ill conceived and in many ways the outcome of the cases themselves is entirely irrelevant. That's quite arrogant, I think...

 

Cabot have been trying this idea for some time and this article seems to be riddled with their own opinions of the law, rather than a detailed rundown of aspects of law or changes within CCA law that they intend to adhere to.

[spamheed]

Right so my original stance seems to be the right one.

 

Clarify equitable or absolute assignment - if equitable why are they bringing a claim - if they claim only rights and not duties - why are they bringing a claim as they are not the creditor

concrete proof of ownership via doa/noa

then we look at the agreement

PPI included without any separate t&c or sig

no reference or account number linking it to account

No right to cancel

No condition allowing interest

[creditcardmug]

Got this from Paul re the s69 interest, if its any help

 

S69 interest is interest which is added to the principal sum under the County Courts Act 1984 S69

 

why arent they entitled to it? because its a regulated agreement regulated by the Consumer Credit Act 1974 and the County Courts (Interest on Judgment Debts) Order 1991 (No. 1184 (L. 12)) section 2(3) states they are not entitled to it!!

[spamheed]

Thanks for that CCM, it all adds to the defence. it would appear that every aspect of their claim is flawed.

 

Will start posting my defence over the next week or so

[PriorityOne]

There seems to be some reluctance to admit to Absolute Assignment on a number of threads lately.... so you have to ask yourself why that is. They don't seem to be fully committing to either explanation (IMO).... but you're right; Equitable would mean they cannot bring action in their own name and Absolute is the complete sale of the account, so they can't have it both ways.

 

IMO (again), this is Absolute.

[spamheed]

I think so too

 

Let's see what they send me in response to my 31.14 and part 18 requests

[caro]

If you get the PPI back, would that anywhere near cover the alleged debt?

[spamheed]

The loan amount on the agreement is £5k, the PPI about £1200, the outstanding balance is about £48xx incl the PPI - with costs etc the claim is for slightly over £5k

 

so one wouldn't cancel the other but it would bring it back under the £5k mark

 

I had read somewhere that the selling of PPI in this manner (up front and interest applied) had been all but outlawed, would this make the CCA completely unenforceable?

I can find no legislature, or documentary proof of this

[gh2008]

Got this from Paul re the s69 interest, if its any help

 

S69 interest is interest which is added to the principal sum under the County Courts Act 1984 S69

 

why arent they entitled to it? because its a regulated agreement regulated by the Consumer Credit Act 1974 and the County Courts (Interest on Judgment Debts) Order 1991 (No. 1184 (L. 12)) section 2(3) states they are not entitled to it!!

 

Sorry but that part of the Law only applies to Judgement debts i.e. post trial

The general rule

2.—(1) Subject to the following provisions of this Order, every judgment debt under a relevant judgment shall, to the extent that it remains unsatisfied, carry interest under this Order from the date on which the relevant judgment was given.

 

However there is a regulation that applies pre-judgement on claims where there is already a contractual rate that applies. Trying to find it.

[spamheed]

that would be helpful thx

[gh2008]

Found it.

 

It is in S69 of teh Count Courts Act itself

69 Power to award interest on debts and damages

 

(1)Subject to [F1rules of court], in proceedings (whenever instituted) before a county court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and—

(a)in the case of any sum paid before judgment, the date of the payment; and

(b)in the case of the sum for which judgment is given, the date of the judgment.

 

(2)In relation to a judgment given for damages for personal injuries or death which exceed £200 subsection (1) shall have effect—

(a)with the substitution of “shall be included” for “may be included”; and

(b)with the addition of “unless the court is satisfied that there are special reasons to the contrary” after “given”, where first occurring.

(3)Subject to [F1rules of court], where—

(a)there are proceedings (whenever instituted) before a county court for the recovery of a debt; and

(b)the defendant pays the whole debt to the plaintiff (otherwise than in pursuance of a judgment in the proceedings),

the defendant shall be liable to pay the plaintiff simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt for all or any part of the period between the date when the cause of action arose and the date of the payment.

(4)Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs.

 

Now, being a CCA debt there is already contractual interest as specified in the T&Cs.

if they haven't got the T&Cs to prove it or forge to add it then that's their problem

 

If they are claiming S69 then they *could* be saying that the account has been terminated ........

and that would open a whole new can of worms for them.

 

You have checked S86(a-c) (of the CCA) as well haven't you ...

 

They are saying the account is still 'live' as you cannot have 'arrears' on a terminated account (only arrears at termination).

 

Yes, it may be 'wordplay' but so much in litigation is ...... but they cannot have it both ways.

[caro]

The loan amount on the agreement is £5k, the PPI about £1200, the outstanding balance is about £48xx incl the PPI - with costs etc the claim is for slightly over £5k

 

so one wouldn't cancel the other but it would bring it back under the £5k mark

 

I had read somewhere that the selling of PPI in this manner (up front and interest applied) had been all but outlawed, would this make the CCA completely unenforceable?

I can find no legislature, or documentary proof of this

 

It could be argued that adding the PPI in this manner would invalidate the entire loan. http://www.consumeractiongroup.co.uk/forum/showthread.php?171037-Multiple-agreements-falling-within-section-18-CCA-1974&p=1845581&viewfull=1#post1845581

[spamheed]

It could be argued that adding the PPI in this manner would invalidate the entire loan. http://www.consumeractiongroup.co.uk/forum/showthread.php?171037-Multiple-agreements-falling-within-section-18-CCA-1974&p=1845581&viewfull=1#post1845581

 

I had seen that and I was going to use it in my defence, effectively without the separate agreement/T&C/Signature, there is no way to prove that the PPI was requested or agreed to, there is also only a single repayment amount, so no way of telling how much is ppi and how much is loan repayment

 

also the interest rate is only correct when including the PPI.

 

there is also no breakdown of how the loan got from £7k+ (loan+PPI+interest) to £44xx (with Moorcroft and Freds) then back up to £58xx with Cabot

[spamheed]

I have been looking around for examples of a good defence to base my own on and decided to take a look at Wilson v First County Trust Ltd (no1)

 

My understanding is:

 

Loan taken out for £5k - a document fee of £250 was charged and added to loan amount

Court of Appeal held that, adding this document fee to the loan amount was incorrect it should have been stated in the agreement as part of the total charge for credit

 

This single irregularity rendered the agreement unenforceable

 

If taking out a PPI policy is a condition for entering the loan agreement with the lender - the premium must be entered into the total charge for credit; not the total loan amount

 

Now look at post #23 the PPI is included in the total loan amount

 

There is no option to "opt out" of the PPI, no right to cancel either PPI or Loan, so PPI must have been a pre-condition

 

Opinions please :o)

[spamheed]

Not sure if this is 100% right but I understand this to mean

 

No statements received re S86 CCA = terminated account = no interest

[gh2008]

no statements re S86 CCA = unable to enforce S86(d) (but only whilst default continues)

 

BUT could also be used to show that 'to the common man' no statements would indicate that the account has been terminated (but how, when and by whom was the acc terminated)

therefore no current arrears ......

 

Again it comes down to them not being able to have it both ways. Maybe a CPR18 request (for further info) to clarify the status of the account, the current creditor or owner and Cabot's status ....

 

& I like your PPI argument - trying to find a reason why it won't work ..... ;-)

Was there ever an application form? or was it online? if not then a very valid argument

 

always jmho though

[spamheed]

no statements re S86 CCA = unable to enforce S86(d) (but only whilst default continues) since they have already started a claim I was hoping it would just show up their ignoring the rules and making it up as they go along

BUT could also be used to show that 'to the common man' no statements would indicate that the account has been terminated (but how, when and by whom was the acc terminated)

therefore no current arrears ...... again making it up as they go along - no regard for CPR/CCA/CPUTR etc and so on

 

Again it comes down to them not being able to have it both ways. Maybe a CPR18 request (for further info) to clarify the status of the account, the current creditor or owner and Cabot's status .... I already sent a 31.14 and a part 18 request off - don't expect much of a response other than what they have already sent me

& I like your PPI argument - trying to find a reason why it won't work ..... ;-) I can't see why it wouldn't and Wilson is a clear precedent, not just the form and content of the CCA but the adding of credit charges to the loan amount

Was there ever an application form? or was it online? if not then a very valid argument I would imagine so, but I don't have a copy and certainly not over the internet

always jmho though

 

As long as my defence covers all of the points as mentioned I cannot see (Judge lottery excepted) how they could expect to be successful.

[PriorityOne]

You may find this useful... courtesy of pt2537 (Paul)...

 

if i were formulating arguments here, i would be relying on s173 CCA which expressly prohibits and declares a term void if it is contracting out of the Consumer protections of the Act.

 

my submission would be that such a term that allows a assignment to strip away the protections of the act would simply be contracting out

 

one ponders and asks the question, if they arent the creditor then what happens if the agreement hasnt been terminated (Cabots favourite argument) and therefore you make a request to the original creditor and then they dont comply, but cabot is suing you in the mean time

 

what would happen then??

 

seems to me cabot would be able to enforce while the agreement is unenforceable?

 

if they are to be believed as right!!!

IMO, this suggests a reason for Cabot's reluctance to confirm the type of assignment it is...

[spamheed]

Well I've sent Egg my initial PPI claim letter, it would be interesting if they paid up whilst Cabot were claiming the full amount of the PPI and in effect accepted misselling the PPI = Cabot attempting to enforce an agreement that the OC have already accepted contains terms which render it unenforceable ie missold PPI

 

I have also asked in my part 18 specifically what type of assignment took place with this account (and asked for proof of same) given that in their LBA Morgan state that the creditor is still Egg, yet in their hello letter they (cabot) state that they have bought the debt

 

Since they haven't produced the application and the agreement contains no option to deselect the PPI it certainly looks like they are trying to sell the ppi as a pre-agreed part of the loan

the interest without the PPI is as high as 16% whilst the APR contained within the T&C of the agreement is 7.9% so if the PPI argument holds, it destroys the APR, Amount of credit, Total amount.

 

Seems like an embarrassed defence really won't do here

 

It would seem more logical to put forward the best defence possible and get them to drop the case, or have it set aside then follow up with wasted costs and wish you were here postcard ;o)

[spamheed]

You may find this useful... courtesy of pt2537 (Paul)...

 

if i were formulating arguments here, i would be relying on s173 CCA which expressly prohibits and declares a term void if it is contracting out of the Consumer protections of the Act.

 

my submission would be that such a term that allows a assignment to strip away the protections of the act would simply be contracting out

 

one ponders and asks the question, if they arent the creditor then what happens if the agreement hasnt been terminated (Cabots favourite argument) and therefore you make a request to the original creditor and then they dont comply, but cabot is suing you in the mean time

 

what would happen then??

 

seems to me cabot would be able to enforce while the agreement is unenforceable?

 

if they are to be believed as right!!!

IMO, this suggests a reason for Cabot's reluctance to confirm the type of assignment it is...

 

Not sure if I fully understand this, I've had a look at S173 CCA and I'm still not 100% how I could use this

[PriorityOne]

pt2537 seems to be suggesting that you can pull out s173 if Cabot try and tell you that they have the rights but not the duties of the Agreement.... as what they're saying is if they don't have an Agreement, they can sue you anyway because they have the "right" (by Absolute Assignment).... but are not bound by the "duties" of the Act.

 

If this doesn't apply to you Spamheed, please ignore... I'm working on a few Cabot threads at the moment and they're starting to blur into one!... lol

[spamheed]

pt2537 seems to be suggesting that you can pull out s173 if Cabot try and tell you that they have the rights but not the duties of the Agreement.... as what they're saying is if they don't have an Agreement, they can sue you anyway because they have the "right" (by Absolute Assignment).... but are not bound by the "duties" of the Act.

 

If this doesn't apply to you Spamheed, please ignore... I'm working on a few Cabot threads at the moment and they're starting to blur into one!... lol

 

They do have an alleged agreement of sorts, and the rights and duties argument seems to hold water, but not sure if it applies. I would love to see what they say in response to my question re what type of assignment covers the sale of this alleged account and then build my response

 

Please feel free to keep on posting, any help is more than welcome and most appreciated. I'm starting to get a feel for the content of my defence, I will most certainly require help when it comes to putting my defence down in writing

[spamheed]

It looks like we're off to a bit of a none starter with regards to the right to cancel being a missing prescribed term, there needs to be antecedent negotiations prior to entering into the agreement.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?181853-Tesco-Loan-No-right-to-cancel-on-Agreement&p=2163475&viewfull=1

 

However if they contest on the grounds of no antecedent negotiations, then this means that the PPI must have been a condition of the loan and should have been added to the charge for credit ratrher than the total amount of Loan (as per Wilson vs County Trust) I had this explained and it seems very obvious, why would anyone take out a loan for insurance which.....protects the loan

 

Comments?

[spamheed]

Is there a reliable defence which refers to unenforceability issues as well as documentation shortcomings around?

 

Cheers