Default Notice or Termination?

[tpedge]

Hi,

 

I discovered this site today while researching a debt collection agency that had been bothering me. After reading through several of the threads here regarding Default Notices I was hoping someone could shed some light on the one I recieved last week.

 

The DN requests a payment for the total outstanding loan rather than just the arrears. There is also an * next to the amount which is not explained anywhere.

 

I don't have access to a scanner at the moment so I have typed it word for word below.

 

------

 

IMPORTANT - YOU SHOULD READ THIS CAREFULLY

DEFAULT NOTICE

Served under Section 87(1) of the Consumer Credit Act 1974.

 

Dated: [DATE]

 

To: [NAME]

 

From: [bANK NAME & ADDRESS]

 

We hereby give you notice of default in respect of [bANK]'s agreement with you, details of which are shown below.

 

Type of Agreement: Personal Loan

Account Number: [A/C NUMBER]

 

Provision Breached: Under the above Agreement you undertook to pay monthly payments of £XXX.XX.

Nature of Breach: You have failed to maintain these payments and are therefore in breach of the Payments clause of the agreement.

 

Action required by you: Earlier payment of the total balance of £XXXXX.XX.*

Date by which action is requires: Payment must be received by us on or before [14 days after date of letter sent].

 

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN THEN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH.

 

IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE DATE SHOWN THE FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU.

 

Further action: We may commence legal proceedings to recover the total balance.

 

The total balance is made up of the amount borrowed plus interest less any payments made. This is not a settlement letter as no allowance has been made for interest calculated to the end of the current month. If you require an up to date settlement figure please contact us.

 

You should be aware that if we take you to court and get a judgement against you requiring you to pay us the money you owe us under the agreement, you may have to pay us both the amount of the judgement and interest under the agreement on all sums owed by you at the date of the judgement until you have paid these in full. This means that even if you pay off the whole amount of the judgement, you may still have a further sum to pay.

 

IF YOU HAVE DIFFICULTY IN PAYING ANY SUM OWING UNDER THE AGREEMENT OR TAKING ANY OTHER ACTION REQUIRED BY THIS NOTICE, YOU CAN APPLY TO THE COURT WHICH MAY MAKE AN ORDER ALLOWING YOU MORE TIME TO PAY.

 

IF YOU ARE NOT SURE WHAT TO DO, YOU SHOULD GET HELP AS SOON AS POSSIBLE. FOR EXAMPLE YOU SHOULD CONTACT A SOLICITOR, YOUR LOCAL TRADING STANDARDS DEPARTMENT OR YOUR NEAREST CITIZENS' ADVICE BUREAU.

This notice should include a copy of the current Office of Fair Trading information sheet on default. This contains important information about your rights and where to go for support and advice. If it is not included, you should contact us to get one.

 

------

 

Any advice would be greatly appreciated. As I understand it if this DN is invalid and I do not contact the bank they will eventually send me a termination and at that point all they are entitled to is the £1072 arrears?

Edited November 29, 2009 by tpedge

[Bazooka Boo]

What date did you receive it?

 

Have a read through this thread aswell.http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/200901-anatomy-default-notice.html

[postggj]

fracked up again

 

they have allowed 14 days to rectify the default but not for service

 

dn is crap

 

tell the bank nothing

 

only works in court

[hungrybear]

Well isnt that brilliant. Completely useless DN as posty says.

 

DO NOT TELL THEM. YOU MUST LET THEM TERMINATE AND EVEN ISSUE COURT PAPERS

 

- without termination they can replace the DN

 

- with trolls in mind please do the following - change all the amounts and the dates in the DN in your post, you do not want to tip anyone off.

 

- the sit back and enjoy the ride

[tpedge]

What date did you receive it?

 

It arrived on the 24th November. I immediately panicked and called the bank they told me if I could make a payment in the next week it would be okay. I haven't yet made the payment as I'm still broke.

 

Would it be sensible to cancel the direct debit to save being charged by my bank and then just wait for a Termination or summons from the Loan provider? They call me fairly regularly but I've stopped answering since every address I give them is apparently not the one on my account despite me receiving their post just fine.

 

Thanks for your prompt replies.

[welshperson3]

hi tepedge

 

I'm in the same situation as you with a dodgy DN.

i have been getting advice on mine and doing research on here and in my opinion you are right, they should only be claiming the areas on the DN so that makes it dodgy.

 

there is also one other point on there to look at.

the date on the top is 21/11/2009 the remedy date is 05/12/2009 which is 14 days they have not allowed for posting,so check the envelope for proof of when it was posted.

 

so don't tell then and wait for a termination letter or for them to start court proceedings which is also terminating.

it could also be argued that as they are claiming the full amount in the dn that this is already terminated as they can only claim full amount after terminating the agreement.

 

so now you have to wait to see what they do next it will give you time to do more research, there is plenty on here about dodgy DN.

 

DO NOT TELL THEM ABOUT THIS DN YET

 

wp3

[tpedge]

Excellent. Thanks for your help.

 

I shall keep this thread up-to-date as this unfolds.

[hungrybear]

It arrived on the 24th November. I immediately panicked and called the bank they told me if I could make a payment in the next week it would be okay. I haven't yet made the payment as I'm still broke.

 

 

 

I now think I understand the 'psychology of idiocy'. I do not think that they actually intend this to be a DN, it is designed as a threat to get you to contact them and pay something. It is possible that if you dont pay they will issue another DN, just guessing but I'm trying to figure out the psychology behind sending such an totally inadequate DN.

 

In this notice they have asked for the full amount by a specific date and given you no form of remedy that will not end the agreement. Therefore this must be a DN and TN rolled into one. This is why I think it must be a 'pay up' bluff.

 

If it were me I would write to them and accept their termination of the account, together with a cheque for x pounds and a repayment plan for the entire arrears to 'bring your contractual relationship to a close in as timely a manner as possible'.

 

What does everyone else think?

[postggj]

IMPORTANT - YOU SHOULD READ THIS CAREFULLY

DEFAULT NOTICE

Served under Section 87(1) of the Consumer Credit Act 1974.

 

says it all

it is a default notice

i would do nothing

[diddydicky]

I assume that you are/were in arrears at the time the notice was issued

 

If so they CANNOT replace this DN because the DN is in fact an unlawful rescission

 

The creditor has demanded payment of sums not yet due (he has even compounded his folly by stating in the notice "earlier payment"

 

The creditor is not entitled to claim the benefits of s87 (sums not yet due) unless and until he first serves a valid default notice giving you 14 clear days to remedy any alleged default in the agreement

 

You should write and point out that they have unlawfully rescinded the agreement and you accept the unlawful rescission and that the agreement is now terminated

[hungrybear]

I assume that you are/were in arrears at the time the notice was issued

 

If so they CANNOT replace this DN because the DN is in fact an unlawful rescission

 

The creditor has demanded payment of sums not yet due (he has even compounded his folly by stating in the notice "earlier payment"

 

The creditor is not entitled to claim the benefits of s87 (sums not yet due) unless and until he first serves a valid default notice giving you 14 clear days to remedy any alleged default in the agreement

 

You should write and point out that they have unlawfully rescinded the agreement and you accept the unlawful rescission and that the agreement is now terminated

 

 

100% on the button dicky. Still think the idiots thought it would work as a 'throw away' threatogram through:lol:.

[tpedge]

I think I may hold fire until the 14 days are up but I knocked this together by cutting chunks out of some of Diddy's letters. (thank you for you eloquence!)

 

-----

 

Dear Sirs,

 

Your Ref:

 

As you are no doubt aware a Default Notice must conform to prescribed regulations for the manner in which it is set out and the information that it contains.

 

In particular and of paramount importance it must give the debtor an opportunity to remedy any alleged breach and give the debtor 14 days from the date of service of the Default Notice in which to do so. The act also states that if the alleged breach is remedied then it will be as if the breach never occurred (the agreement endures).

 

The document I received from you on the [DATE] purported to be a valid and effective Default Notice (attached) which, notwithstanding that it did not in any event allow sufficient time after service for any alleged breach to be rectified, but crucially also demanded that in order to rectify the breach I must pay the full balance of the account, in other words it gave no opportunity to remedy the alleged breach. The faults in this alleged default notice cannot either singly or together be defined as de minimus.

 

The Consumer Credit Act gives the creditor no room for error and demands that with the financial and legal knowledge at his disposal, that they either get the documents right or suffer the consequences.

 

The effect of the alleged default notice above amounts to an unlawful rescission of the alleged agreement which I am writing to you to accept.

 

You will also be aware that having unlawfully rescinded the agreement by failing to comply with the requirements of the consumer credit act by first issuing a valid default notice under sect 87(1) of the act, the amount owing to you will consist only of the outstanding arrears at the time of the termination.

 

I am of course entitled to counter claim compensation as a result of your unlawful rescission of contract which I believe would be greater that the arrears outstanding.

 

I am however prepared to offer to waive my counterclaim in order to dispense of this matter quickly on the terms as follows:-

 

Within 21 days of the date of this letter you will remove any and all adverse information you may have supplied to any credit reference agencies. You will undertake not to pass any details of this terminated account to any debt collection agency and will mark the account satisfied in full.

 

Your Sincerely,

 

tpedge

 

 

---------

 

Does that seem appropriate?

[Deb T]

Obviously it's 'copy attached' you'll not be sending the original back to them and the pedant on me pulls up that it should singularly as opposed to singly (I'm the worlds worst for bad grammar etc but I couldn't let that oozing spelling mistake go)

 

As for the rest of the letter, I'd probably send it as it says what it should and gets the point across but I'm convinced that creditors do the same with debtors letters as what we do with their threatograms/dross as in read them, usually laugh at them, always file them and then promptly forget about them.

[diddydicky]

I think I may hold fire until the 14 days are up but I knocked this together by cutting chunks out of some of Diddy's letters. (thank you for you eloquence!)

 

-----

 

Dear Sirs,

 

Your Ref:

 

As you are no doubt aware a Default Notice must conform to prescribed regulations for the manner in which it is set out and the information that it contains.

 

In particular and of paramount importance it must give the debtor an opportunity to remedy any alleged breach and give the debtor 14 days from the date of service of the Default Notice in which to do so. The act also states that if the alleged breach is remedied then it will be as if the breach never occurred (the agreement endures).

 

The document I received from you on the [DATE] purported to be a valid and effective Default Notice (attached) which, notwithstanding that it did not in any event allow sufficient time after service for any alleged breach to be rectified, but crucially also demanded that in order to rectify the breach I must pay the full balance of the account, in other words it gave no opportunity to remedy the alleged breach. The faults in this alleged default notice cannot either singly or together be defined as de minimus.

 

The Consumer Credit Act gives the creditor no room for error and demands that with the financial and legal knowledge at his disposal, that they either get the documents right or suffer the consequences.

 

The effect of the alleged default notice above amounts to an unlawful rescission of the alleged agreement which I am writing to you to accept.

 

You will also be aware that having unlawfully rescinded the agreement by failing to comply with the requirements of the consumer credit act by first issuing a valid default notice under sect 87(1) of the act, the amount owing to you will consist only of the outstanding arrears at the time of the termination.

 

I am of course entitled to counter claim compensation as a result of your unlawful rescission of contract which I believe would be greater that the arrears outstanding.

 

I am however prepared to offer to waive my counterclaim in order to dispense of this matter quickly on the terms as follows:-

 

Within 21 days of the date of this letter you will remove any and all adverse information you may have supplied to any credit reference agencies. You will undertake not to pass any details of this terminated account to any debt collection agency and will mark the account satisfied in full.

 

Your Sincerely,

 

tpedge

 

 

---------

 

Does that seem appropriate?

 

at this stage i would be inclined to ditch the last two paras regarding settlement-let them ponder on it for a while-

[tpedge]

Today is two days after the settlement date indicated on the alleged Default Notice. I recieved a call from a manager at the Loan Company on his mobile phone. He asked me how much I was wiling to pay them and I explained that I would be willing to pay them the arrears to bring the matter to a close as they have terminated the account.

 

I'm a little rattled I was expecting to hear from them in writing not on the phone and he took me completely by surprised. I will put the letter in the post tomorrow minus the last two paragraphs.

 

Any other advice? My girlfriend and my financial situations are pretty terrible right now and I'm just hoping I'm not doing something that's going to make it worse.

[Deb T]

Yep, sit back and wait to see what their next move is...but importantly any CALL they make to you should be met simply with ' I am not prepared to communicate with you except in writing' and put the phone down and don't answer to them again.

 

They'll tie you up in knots if you engage them in conversation, see the first line of my signature as to why.

[hungrybear]

Yep, sit back and wait to see what their next move is...but importantly any CALL they make to you should be met simply with ' I am not prepared to communicate with you except in writing' and put the phone down and don't answer to them again.

 

They'll tie you up in knots if you engage them in conversation, see the first line of my signature as to why.

 

 

because you live in dawlish warren but you are not a rabbit?.

 

Good point though Deb, these slimy toads will say anything on the phone but in writing, as the Americans say, there is no 'operational deniablity'

[tpedge]

A friend of mine showed my alleged Default Notice to two friends of his who are Solicitors. They both seemed to think that the bank were acting legally and fairly, although they stressed that it is not their area of law. They have recommended I contact my local CAB which I plan to do tomorrow.

[diddydicky]

A friend of mine showed my alleged Default Notice to two friends of his who are Solicitors. They both seemed to think that the bank were acting legally and fairly, although they stressed that it is not their area of law. They have recommended I contact my local CAB which I plan to do tomorrow.

 

youll get far better and more knowledgeable advise on here than from any cab or high street solicitor

[applecart]

Tpledge,

 

You have notified the lender of thier error over the phone...I truely hope this does not alert them to look too c(losely at the DN they have sent you and simply send you another one.

 

Because as pointed out in earlier replies, they could do this....in a court of law, they could simply argue that 'we employed a temp at the time, and she mistakenly sent out the wrong paperwork - if you look sir at the one sent after..... you will see that as soon as this was noticed, we took appropriate action to ensure we served within the law - you'll see this one meets our obligation to the letter.....(as they smile knowingly at the Judge).

 

I wouldn't send any letter at all -Your letter gives them far too much information as to how they can put it right.

 

Never assume anything - by this I mean, do not make any asumption that they have unwittingly 'terminated' the agreement in serving that DN. Wait for them to send the termination notice - then compile your letter, (If you feel the need to put something in writing - but only say that you accept that they have terminated the agreement NOT that you are terminating the agreement - this is very important)

 

The beauty about consumer credit is that it continues to evolve - what was the case last year - could be completely different in a years time....

 

They may at that point, refer your case to a DCA or take the matter to court.

 

I would refuse to deal with any DCA where a agreement has been terminated unlawfully and wait (even insist) that the lender take court action.. Once I got the letter from the DCA I would write to the lender advising that I dispute the decision made to involve a DCA due to the FACT that the agreement has been ended unlawfully, and I would at this time, put all the facts in front of them as to why they cannot get any money from me without the order of a court.

 

Apple : )

[tpedge]

Many thanks to all the responses. I will take the advice of Apple and Deb T and wait to see what happens next.

 

I think I panicked as both the phone call from the bank and the response from my friends solicitor caught me off guard, it's been a trying few months. Thanks for all the support.

[NGEddie]

Just to clarify a couple of notes on this thread please.

 

So once the DN is sent, it can only claim for the arrears at that time, as lower down the page they have the full amount owed dont they?

 

If nothing is done, no Termination letter is sent and they go for a CCJ, am I correct in thinking by going for a CCJ for the whole amount, this terminates the agreement?

 

Thanks

 

E

[postggj]

if a court claim is issued on a defective default notice,

all the defendant would have to pay are the arrears up to the default notice date

 

kiss the rest goodby

 

only works if a court claim has been issued

 

never tip off a creditor on a lousy dn prior to a claim or the creditor will just issue a new dn

[NGEddie]

Really? thats actually making my heart miss beats, lol,

 

Court claim has been issued yes, and as I understand its too late for them to send another DN

 

Do you happen to know which section of CCA says this? as I may need to quote it!

 

Many thanks!

[postggj]

its under the default and terminations regs

 

Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561)

 

 

Quote:

SCHEDULE 2

FORM OF DEFAULT NOTICE BEFORE A CREDITOR OR OWNER CAN BECOME ENTITLED, BY REASON OF ANY BREACH BY THE

DEBTOR OR HIRER OF A REGULATED AGREEEMENT, TO TERMINATE THE AGREEMENT, DEMAND EARLIER PAYMENT OF ANY

SUM, RECOVER POSSESSION OF ANY GOODS OR LAND, TREAT ANY RIGHT CONFERRED ON THE DEBTOR OR HIRER BY THE

AGREEMENT AS TERMINATED, RESTRICTED OR DEFERRED OR ENFORCE ANY SECURITY

Regulation 2(2)

Details of agreement

 

1

A description of the agreement sufficient to identify it.

 

Parties to agreement

2

(1) The name and a postal address of the creditor or owner.

(2) The name and postal address of the debtor or hirer.

 

Details of breach of agreement and action required to remedy, or pay compensation for, the breach

3

A specification of:--

(a) the provision of the agreement alleged to have been breached; and

(b) the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

© if the breach is capable of remedy, what action is required to remedy it and the date, being a date [not less than

fourteen days] after the date of service of the notice, before which that action is to be taken; or

(d) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and

the date, being a date [not less than fourteen days] after the date of service of the notice, before which it is to be paid.

 

relevant case law is this too...