Citi & DPA 1998 don't have to send CCA

[Bosund]

Hi Enron,

 

Yes, I received one of those letters as well and could not agree with you more on your last paragraph.

 

Still, had a little win with MBNA thanks to this site, (donation on it's way when the funds are cleared), so will keep hounding the FOS & OFT.

 

Regards,

 

Bosun.

Edited February 7, 2010 by Bosund
Spelling - again

[Bosund]

Well I'll be blowed,

 

Citi, finally, via the FOS, have produced a copy of my CCA, albeit, only the front page.

 

Had a call from the FOS asking if I'd received the cca and did I agree that Citi had now complied.

 

Told the FOS adjudicator that no I didn't agree they had complied as all they have sent was a photocopy of the front page, where was the terms & conditions which were supposed to be 'overleaf' and if they did have it, why has it taken from July 2009 for them to produce it.

 

The matter is being put before an Ombudsman now but realistically think they will just back the adjudicator up.

 

A copy of what they sent is at the end of this link.

 

http://i925.photobucket.com/albums/ad92/Bosund/peoplesbankcca.jpg

[Enron]

Exactly the same as mine.

 

It looks as though they have only retained the front of the "executed agreement".

 

Therefore the creditor have not provided you with a complete copy of the "executed agreement", in as much as the reverse is missing especially as it is referenced on the front as containing the Terms & Conditions.

 

So nope they haven't discharged their obligations under the act and the s78(1) Consumer Credit Act request.

 

Whilst in this period s78(6) Consumer Credit Act is active and they can't enforce the agreement. In accordance with the Manchester Test case, and ammended OFT guidance on the act - they can't persue legal action until they have provided you with a full copy of your "executed agreement", they shouldn't even be threatening legal action as they can't legally that at present.

 

As for the Ombudsman it'll be interesting to see what happens, I was told that an adjudicator would likely not rule in my favour..... that said as your copy of the "executed agreement" has come through the FOS we'll see. They certainly haven't completed your request by any means as you have half of what you want.

 

If you previously received a copy of recent 'Terms & Conditions' which they referenced as the "executed agreement" and you now have this, I would like you to write to the Office Of Fair Trading with a complaint.

 

Citi have been doing a merry little dance, and playing shinanigans with everyone for far too long on this issue.

[Bosund]

Hi Enron,

 

Thanks for the comments, will get a complaint letter off to the OFT asap and wait to see what comes back from the Ombudsman.

 

Cheers...

[Enron]

Certainly Citi got into trouble with the OFT for sending out 'Terms & Conditions' in response to s78(1) CCA in the past, as letters were sent to all those who complained from Citi assuring them that there requests would be dealt with.

 

Citi gets it's licence renewed last year, and low and behold as par my suspicions because of the wording mentioning "agreement", rather than 'executed agreement' as listed in the legislation, people once more end up with another copy of 'Terms & Conditions' this time retitled as your 'agreement' - but essentially its the same thing with just a new title and the persons address entered.

 

Now they haven't been doing the same shinanigans with the FOS, they have produced a genuine copy, not retitled Terms & Conditions. It might be worth mentioning this with the OFT.

 

That said because of the coming new order where banks have more power, it is questionable as to whether the likes of the OFT or FOS will actively do anything to stamp out this kind of behaviour.

[Bosund]

Thanks for the extra info...

[Bosund]

Well folks,

 

No suprise ther then... Enron & The Shadow were right in their view that the Financial Ombudsman seem to be siding with the banks.

 

Just had this delivered: -

 

http://i925.photobucket.com/albums/ad92/Bosund/OmbudsmanDecision.jpg

 

No mention of Citi being in default, or lying to the FOS, or references to the Consumer Credit Act when the account was in default.

 

So what now, sit back and wait for the DCA letter I suppose but until they come up with a valid Executed Agreement they can whistle.

 

One good thing did come out of it though and that was the Ombudmans statement that the absence of the reverse of the document could be used as a defence in court.

 

Lets hope we get a judge...

 

Regards,

 

Bosun.

[ltc1607]

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[the_shadow]

Did Citicards issue a default notice prior to marking the default on the credit file?

 

S.

[Bosund]

Hi Shadow,

 

Hope all is well with you.

 

Looking back, I think I was using the term Default incorrectly. What Citi had done was marked my credit file with a late payment marker.

 

A Default Notice has now been issued, 4th March 2010, but as yet no 'Default' has appeared on my Credit File.

 

Just waiting until I confirm with the FOS that I still do not accept their findings I suppose. Unfortunately, as it is their, (the FOS's) final response there does not seem to be much milage in pointing out why I do not accept it.

 

Regards,

 

Bosun.

[Bosund]

Hi,

 

Well now I've finally got the obligatory letter from Cabot, no Notice of Assignment, not even the dodgy ones they are sending out to everyone else... did I upset someone? This arrived about the 27th Sept to which I replied that I do not acknowledge their now 'owning' the debt, as a, the alleged account is in Dispute with Citi as they have not supplied a copy of the CCA and the fact that the alleged amount of the account is wrong.

 

The fact that they have not complied with my CCA request has been acknowledged by the FOS.

 

As for the amount owed. I was relying on my PPI claim. PPI was not requested and I would not have been to claim on it anyway due to my employment status. Employed by a company I owned.

 

This may or not have been a good idea as I've just found out from the FOS that there has been some high-level, (their term not mine), discussions about Citi's responsibilities.

 

It seems that, at the time my agreement was taken out, 1999, Citi were not regulated by the FOS. That said, Peoples Bank who the card was taken out with were but, Citi have been arguing that they should not be held responsible for any PPI sold by People Bank.

 

This brings up another point. If Citi get away with not being responsible for parts of the agreement, e.g. we will buy the debt but not any obligations that go with it, what rights do Cabot have? Conversely, if the FOS rule that Citi are responsible for PPI sold by Peoples Bank and Citi have now sold the debt to Cabot, should we start submitting requests for re-payment of PPI to Cabot?

 

Would appreciate any thoughts on the last point.

 

Regards,

 

Bosun.

[Enron]

I was of the opinion that all rights and duties transfer to whoever the creditor was, which would include Citi, and maybe now Cabot.

 

That said if your complaint started when the account was with Citi, and effectively they've sold it to escape the said rights and obligations it could be a point that the FOS may highlight.

[Bosund]

Hi Enron,

 

Noticed on here that a lot of Citi 'customers' have had their 'custom' transferred to Cabot during September... wonder if this has anything to do with the discussions going on at the moment?

 

Will ring the FOS in the morning and find out their thoughts on this.

 

If Citi are prempting any problems by passing the buck to Cabot, and this could be shown as probable, what would you suggest.

 

Mind you, I would love to be around if the FOS did turn around to Cabot and say - oh by the way, you have just bought the obligations associated with the alleged debts as well.

 

Regards

 

Bosun.

[citizenB]

THE CONSUMER CREDIT ACT 1974 - Sections 77 and 78

 

Summary

 

On request and when accompanied by £1, a consumer has the right to:

 

• a copy of their executed agreement

• any other document referred to in it

• a statement showing

- the total sum paid under the agreement by the debtor

- the total sum which has become payable under the agreement by the debtor but remains unpaid, and the various amounts comprised in that total sum, with the date when each became due, and

- the total sum which is to become payable under the agreement by the debtor, and the various amounts comprised in that total sum, with the date, or mode of determining the date, when each becomes due. If the creditor is unable to give this information, he can state instead how the dates and amounts fall to be ascertained.

 

The copy of the executed agreement need not be an exact copy but it must be a ‘true copy’ and not some reconstruction of what the original might have been and it must contain the same terms as the original. Where the terms have been varied as provided for within the agreement, the copy of the original agreement must be accompanied by a document setting out the current terms, as varied. Certain details may be omitted from the original agreement eg the signature but the debtor must be in no doubt as to the true nature of his obligations under the loan.

 

Should no original agreement be in existence it is very hard to say that the copy the creditor offers to the debtor is, in fact, a true copy as there would be no original with which to compare it. In our view the onus of proof would be on the creditor to show that the copy is a true one and where none existed he may have difficulty discharging this. Neither should creditors suggest that a consumer has signed a credit agreement where they are unable to provide evidence to support this — to do so is likely to be a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) and would also constitute an unfair or improper business practice.

 

In our view a debt collector who has bought the debt is the ‘creditor’ and as such takes on the liabilities of section 77.

 

Under section 77(4), if the creditor is unable to provide this information, he is not entitled to enforce the debt while he remains in default (Decriminalised from 26 May 2008 on the coming into force of the CPRs).

 

Legal Argument

 

A copy of the executed agreement

 

Under the prescribed condition, section 77 of the Act requires the debtor to ‘...give the debtor a copy of the executed agreement (if any)....‘. The ‘if any’ most naturally refers to the exception for agreements older than 1985.

 

Where a creditor receives a request to supply a copy of the executed agreement, the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 (‘1983 regs’) apply. Regulation 3(1) sets out the basic position that ‘every copy of an executed agreement... shall be a true copy’.

 

Regulation 3(2) goes on to concede that there may be omitted from this true copy various information such as details which are not required to be in the agreement by law: the signature box, signature (it should be noted that sub-ss 3-5 of section 127 do not apply to agreements entered into after 1 April 2007.A Court may then, for example, enforce unsigned agreements if it considers it is just to do so.) and date of signature. In our view the effect of Regulation 3(2) is that the creditor is only obliged to send out a generic copy of the agreement the debtor has signed up to. The creditor is not obliged to make an actual photocopy of the agreement.

 

However, the copy does have to be a ‘true copy’. This is a technical term, which has been discussed in a number of cases, mostly relating to bills of sale and the need to register a ‘true copy’ of the bill with the High Court. These cases come from the days before typewriters, when copies were made by hand. The consequences of filing a copy which was not a true copy were severe, since the bill would then be void and the creditor deprived of his security.

 

Meaning of ‘true copy’

 

In this context, the courts decided that a ‘true copy’ need not necessarily be an ‘exact copy,’ but it must be ‘so true that nobody reading it can by any possibility misunderstand it’ or be misled by it (In re Hewer ex parte Kahen (1882) LR 21 Ch.D. 871 at 875). The copy must contain ‘every material provision which is contained in the original’ (except that if the defect is made good by reading the document as a whole, the omission will not be fatal) (Court of Appeal in Burchell v Thompson [1920] 2 KB 80 at 98-99). Further, it is not sufficient for the copy merely ‘to state with complete accuracy in a summary form the effect of the stipulations contained in the original. It is not merely a document that is to state the true legal effect of the original; it is to be a copy of the original’ (per Atkin LJ in Burchell at 105).

 

Hewer, ex parte Kahen - the filed copy of the bill omitted the precise day of the month on which payment was to be made. The court held this was trivial, and no debtor would be misled by it.

Sharp v McHenry (1888 ) LR 38 Ch.D. 427- the copy contained blanks which were not in the original. The court decided that the blanks were unimportant, since the omitted words were not required for the original bill to be valid.

Burchell v Thompson [1920] 2 KB 80 - the copy failed to include the words ‘per annum’ after the interest rate of 55%. The reader of the copy would have to guess whether the interest was per annum, per month or something else but as one could sensibly assume, correctly, that it was per annum it was a true copy.

Commercial Credit Company of Canada Ltd v Fuiton [1923] AC 798 - suggested further that where there are a raft of smaller differences in a bill of exchange copy, this could prevent it being a true copy. However where the differences were such as to make the copy contract actually different to the original, the copy will not be true. Lord Sumner, speaking of the man who may wish to refer to the copy, concluded that ‘the Act promises him ... a true copy, not a puzzle. He is to inspect it, not to recover the original by a process of conjectural emendation’ (at 807).

 

Terms and Conditions

 

Regulation 7(1) of the 1983 Regs requires that a requested copy of an agreement which has been unilaterally varied under section 82(1) of the Act, shall be accompanied either by the latest notice of variation or a copy of the terms and conditions as varied. Regulation 7(2) extends the principle to copies of varied securities supplied either to the consumer or the surety.

 

Debt collectors as creditors

 

A consumer credit debt can be assigned in two ways: in law under the Law of Property Act 1925 or in equity but in practice we need to be concerned only with statutory assignments.

 

For a debt to be assigned in law, there are three conditions:

 

• the assignment must be absolute.

 

• the assignor must make the assignment in writing.

 

• express notice of the assignment must be given in writing to the debtor (see section 136 of the Law of Property Act 1925).

 

The reason the debt is assigned is immaterial. For instance, books of loans may be sold on to be collected as an asset rather than as a discounted debt.

 

In some instances, the debt collector may have purchased a debt but not have the relevant agreement. Whilst, in general, ‘liabilities’ cannot be assigned there must be a question mark over whether ‘duties’ are the same. This is important since there is a rule, expressed in Tito v Waddell (No 2) [1977] Ch 106 at 289 to 302, that where a benefit is conditional upon some burden, the assignee must also take the burden. An example is where the contractor has the right to mine on condition that they pay compensation to those disrupted by the mining. If they assign their right to mine, the assignee takes this right subject to the duty to pay compensation.

 

Therefore, there is a strong argument that under the Act, the right to payment is never absolute. It is always subject to duties (many of which are imposed under the Act). For instance, the right to enforce the credit agreement at all is subject to the duty to comply with section 77 or 78. This duty is not a ‘liability’ as such under the credit agreement but is a condition of the right to repayment.

There has been a suggestion that debt collectors can avoid complying with section 77 and 78 by claiming that the agreement is no longer `live’ in some way as it has been ‘terminated’ based on section 103 of the Act. This talks of a ‘trader’ who was the creditor under a regulated agreement, implying that ‘trader’ is no longer a creditor once an agreement is ended. Section 103, however, deals with where the customer no longer owes any money at all and therefore it is correct to say that he is no longer a debtor and the trader is no longer his creditor. Where money is still owed, section 103 would not apply, since the consumer would not be entitled to a termination statement.

 

The first issue on when the debt collector becomes the creditor is relatively simple. Section 189(1) of the Act defines ‘creditor’ as ‘the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law.’

 

Where the debt collector is not acting as the creditor’s agent, or otherwise on his behalf, the only legal basis he can have for demanding payment from the debtor is if the creditor’s rights and duties have been assigned to him. Therefore we can be reasonably confident that a debt collector who has bought the debt is the ‘creditor’.

 

Unpalatable though section 77 and 78 may be for some creditors, if the debt collector is unable to prove the debt, they should be more careful about the debts they buy. They cannot complain that the sections are somehow unfair as it is in the Act and so must be complied with. It is up to them to ensure they purchase and maintain sufficient records to be able to prove the debt and comply with the other requirements of the Act.

 

Misleading statements to debtors

 

Sections 77 and 78 refer to supplying a copy of the ‘executed’ agreement within 12 working days of receiving a written request from the debtor. Failure to do so makes the agreement unenforceable against the debtor until a copy is provided. In addition, if the default continues for a period of 1 month the creditor is in breach of the Act.

 

Execution involves signing the agreement. If no agreement has been executed, it is impossible to supply a true copy of the agreement. Should a creditor supply a copy agreement, even though the debtor has never signed any agreement with that creditor, no indication should be given that it is a true copy or a copy of an executed agreement. To do so may contravene Regulation 5 of the CPRs and be an unfair or improper business practice.

 

The consequence of the debtor not having signed a credit agreement with the creditor is that the agreement is unenforceable except where the court orders that enforcement may take place. Where the agreement was made before 6th April 2007 the court is not able to make such an order unless the agreement was signed by the debtor.

 

Therefore it is misleading to state, when complying with a section 77 or 78 request, that the debtor has signed or would have signed (or similar) the enclosed agreement where the debtor has not done so. From 26 May 2008 such a statement will be a breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Regulation 5 of the CPRs states that a commercial practice is a misleading action if it contains false information in relation to the main characteristics of the product (amongst other matters) and is likely therefore to cause the average consumer to take a transactional decision he would not have taken otherwise. The product in question is the credit agreement and the main characteristics include the ‘execution of the product’ (Regulation 5(5)(d) of the CPRs).

 

Telling a consumer that he signed such an agreement is also a misleading statement about his rights and the risks he might face as covered by Regulation 5(4)(k) of the CPRs. It is our view that it is likely that a consumer will take a transactional decision to make a payment under the credit agreement or to refrain from exercising his rights under the agreement as a result of being misled about whether he signed it.

 

Breach of Regulation 5 of the CPRs is a criminal offence under Regulation 9 and can also be enforced under Part 8 of the Enterprise Act 2002. Under section 218A of the Enterprise Act, where an application for an Enforcement Order is made the court may require the Respondent ‘to provide evidence of the accuracy of any factual claim’ (such as a claim that a debtor has signed a credit agreement).

 

In addition, it should be noted that threats to take action that cannot be taken is listed as one of the factors that will be considered in assessing aggressive practices in Regulation 7(2) of the CPRs.

 

May 2008

 

Susan Edwards

Head of Credit Investigations and Enforcement, Office of Fair Trading

 

Is the section in blue any help

[Bosund]

Many thanks...

[Bosund]

Sorry CitizenB,

 

Missed your question at the bottom of your post, yes it is, again many thanks...

[GuitarHero]

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