MBNA card agreements unenforceable

[Hog29]

Hi all,

 

I have 4 MBNA cards (originally 1, but they acquired Homebase, Virgin and A&L cards as well). I had PPI for all of them and successfully claimed due to unemployment. The PPI cover has now ended, and, still being unemployed and in arrears, began to receive the usual nasty letters and phonecalls.

 

I requested to see true copies of all the agreements, and received photocopies for 3 of the accounts (except A&L) within the time limit. Although the copies are too small to read properly, it is quite clear that they do not feature all the prescribed items, as per CCA 1974.

 

I would appreciate some advice on what to write to MBNA now.

 

Thanks

 

Hog29

[silverfox1961]

HI,

If you are sure of the agreements being unenforceable then letter 9 here:

 

The Consumer Forums - Debt collectors

 

is the way to go. One for each card.

[Hog29]

Thanks, Silverfox,

 

Just to make sure: The page which I signed does not contain any information on interest rates or credit limits.

 

Is that unenforceable?

 

Thanks

 

Hog29

[maroondevo52]

Hi, Hog29.

 

Not sure if you've seen this.................

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/105315-my-agreement-enforceable-useful.html

 

Regards.

 

Scott.

[Hog29]

Hi again,

 

MBNA keep sending me the same photocopy of one my agreements with them, this time the copy is even large enough to be almost readable. But it is missing prescribed terms, such as the amount of credit and the rate of interest shown on the page which I signed.

Can I upload a copy for one of the experienced members to have a look at, so that I can be absolutely sure that I am not missing anything?

 

Best Regards

 

Hog29

[silverfox1961]

You could do, I could do with a laugh.

 

If you're not sure how to upload, just shout.

[Hog29]

Thanks. How do I upload?

[Hog29]

I think I just found the answer. The other odd thing about this form is that only my signature and initials are genuine, the other test has been filled in by somebody else. Can't explain that.

 

Regards

 

Hog29

mbna agreement 1.pdf

[silverfox1961]

I think I just found the answer. The other odd thing about this form is that only my signature and initials are genuine, the other test has been filled in by somebody else. Can't explain that.

 

Regards

 

Hog29

doesn't really matter as there are no prescribed terms on it so IMHO, unenforceable.

Does it have a back page?

[silverfox1961]

Just looked again and it says you were a homebase customer. Would this application have been filled in while you were in store. That would explain the different writing.

[Hog29]

Yes, it has a back page, containing terms and conditions. Very small print, but I can figure out with the aid of a magnifying glass, that it shows a credit limit and a range of APRs

[Hog29]

Hi Silverfox,

 

Is the back page of any significance in this matter?

 

Thanks

 

Hog29

[silverfox1961]

It may do if there was a link between the front and the "back" I put the "back" in quotes as when these agreements are printed from the computer or microfiche, the original creditor pretends the front is related to the back in the hope that the uninitiated would accept it as a true copy. Even without seeing the back of yours, I could safely say it has no relation to the front

[usaname]

Hi Hog29,

 

I've just had a look at the alleged agreement that you posted.

 

My comments on this are:

Section 1 headed "Request your card" - application

Section headed "Acknowledgement Details" - "Date of application" - application

Section 8 headed "Principal cardholder's request and declaration" - application

In section 8 "You agree to us disclosing your application..." - application.

 

Is that an application form that they've sent you? If it is an Agreement, where is the signature of "MBNA or one of its representatives"?

 

Food for thought.

[Hog29]

Hi Usaname,

 

Thanks for your comments. The whole page carries the "Credit Agreement" heading, and, as far as I am aware of, the card provider does not have to sign for an agreement to be enforceable.

 

Regards

 

Hog29

[usaname]

Hi,

 

It appears that when anyone puts an account into dispute with MBNA they respond with a stock letter and include with it an information sheet (2 pages).

Information Sheet

 

What is the "executed agreement" you have provided?

 

This is a copy of the executed agreement that the customer signed. (Depending on how the customer applied - for example if the application was by post - this might be on the same page as the application form filled out by the customer).

 

2. Does a photocopy of the original credit agreement have to be supplied in response to a request under Section 78 of the Act?

 

No, a "true copy" has to be provided; but this is not necessarily an exact copy, as certain information may be omitted from the Section 78 copy (for example, the signature of the customer) under the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983).

 

3. When might you not provide a photocopy of the original credit agreement, and why?

 

If the signed original could not be copied legibly for the purposes of Section 78 (for example if it was stored on microfiche) or it could not be retrieved in time to provide a copy in 12 working days, a copy would be reconstituted from our records, and provided instead of a photocopy.

 

As explained above, this would be a "true copy" under Section 78 of the Act.

 

4. How can I be satisfied that the original credit agreement was properly executed especially if you have not supplied a copy showing signatures?

 

The Bank takes its statutory obligations very seriously and would not conclude credit agreements with customers unless it was satisfied they were properly executed and enforceable. We make sure that our customers' credit agreements are properly executed under the Consumer Credit Act ("the Act") by having strict processes in place to ensure that each of our customer's credit agreements:

 

• is signed by both the customer and us,

• is sent to the customer in full,

• is legible when the customer signs it; and

• conforms to the Consumer Credit (Agreements) Regulations 1983 (as amended) and in particular contains the terms which are required by Schedule I and prescribed by Schedule 6 to those Regulations.

 

We comply with Schedule 6 to the Consumer Credit (Agreements) Regulations (as amended) by including the prescribed terms as follows:

 

a. A term stating the credit limit or the manner in which it will be determined

Our customers' credit agreements tell them the manner in which their credit limits will be determined; i.e. we state that the credit limit will be determined by us from time to time and that we will tell the customer what it is.

 

b. A term stating the rate of any interest

The rates of interest applicable to each of the possible transaction types are set out in full in the credit agreement. We now show these as per annum rates. However, prior to the Consumer Credit (Agreements) (Amendment) Regulations 2004 coming into force, we may have shown them as monthly rates, as well as providing an annual percentage rate ("APR") for each, calculated in accordance with the requisite statutory calculation.

 

c. A term stating how you must repay your credit

Each of our customers is required in the credit agreement to make a minimum payment each month. Each customer's credit agreement sets out how we calculate this and states that their payment due date is notified to them on their statement each month.

 

We comply with section 62(2) of the Act by sending each customer a copy of their unexecuted agreement at the same time that we sent their credit agreement for signature. We comply with section 63(4) of the Act by sending each customer with their first credit card a copy of the credit agreement that they signed.

 

If we are challenged to prove proper execution of a credit agreement, (sometimes long after the agreement was made, or without being shown evidence suggesting errors were made) we may rely on the legal presumption of correctness, formerly expressed in Latin as omnia praesumuntur rite et solemniter esse acta (all things are presumed to be correctly done). This presumption is reinforced where the customer has utilised the account in the past and has made repayments from time to time.

 

5. What f the terms of the original agreement have been altered since it was made?

 

This is very likely to have happened, and it is our practice to update an original credit agreement with a customer from time to time in accordance with its terms (legally known as a 'variation'). A copy of the customer's up to date terms and conditions was also enclosed with our response to the Section 78 Request.

 

 

Thanks for your comments. The whole page carries the "Credit Agreement" heading, and, as far as I am aware of, the card provider does not have to sign for an agreement to be enforceable.

 

The information sheet states it does. Thanks MBNA.

 

So, did they "comply with section 62(2) of the Act", as they state they do? I doubt it.

 

More food for thought.

Edited November 22, 2009 by usaname

[Hog29]

Hallo again,

 

MBNA wrote to me about a test case at the Manchester High Court towards the end of last year, which, they claim, seems to indicate that financial institutions do not have to provide any evidence of a properly executed agreement, and will render all unenforceabilty action unsuccessful. Is that true?

 

Thanks

 

Hog29

Edited January 11, 2010 by Hog29
correct error

[silverfox1961]

Bit of a long read but this should help:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/240186-dissecting-manchester-test-case-27.html