Barclaycard - right, wrong or speaking in tongues and trying to confuse?

[MorganaNK]

"In our previous episode...

 

Wrote to DCA who were acting on behalf of Barclaycard for the CCA and received two photocopies of their T&C in return. Sent an In Dispute letter."

 

This morning received the following:

 

Reference: Section 78 of the Credit Consumer Act 1974

 

I write further to the letter whereby you note dissatisfaction to the documents you received in relation to a request made under Section 77/78 of the Consumer Credit Act 1974.

 

Firstly, credit cards are regulated under Section 78. Section 78 (1) of the Act states that the creditor shall give the debtor a copy of the executed agreement and a statement of account which is practicable to refer. Regarding to a statement of account which is practicable to refer, the letters that we send in response to a Section 78 (1) request includes this information. To cover the issue of an executed agreement.

 

How does the act define an "executed agreement"?

 

"Executed agreement" is defined in section 189 of the act as, "a document, signed by or on behalf of the parties, embodying the terms of a regulated agreement".

 

What do the rules say about providing a copy?

 

The Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 ("the Regulations") made under the Act deal with how we are to provide a "copy" of an agreement. These Regulations provide that any copy of the agreement supplied to a debtor should be a 'true' copy. Regulation 3(2) provides that a copy may omit certain information, which allows you to be provided with a true copy, not a complete copy.

 

What happens if the original agreement has been varied since it was originally signed?

 

THe Regulations also set out what should happen where the agreement has been varied since it as signed. Regulation 7 provides creditors with the choice of in the copy of the executed agreement either a copy of the latest notice of variation relating to each discrete term which has been varied, or an easily legible statement of the terms varied. Regulation 7 does not state that the copy of the agreement shall include a statement of the original terms as well as a statement of the varied terms. Regulation 7 allows us to provide you with a "true copy" which sets out the terms and conditions current at the time of provision of the copy.

 

Conclusions in relation to the document we have to provide

 

A "copy" of an agreement will satisfy the requirements even if the signature box and/or the signatures are not included as clarified by Regulation 3 (2) of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983.

 

The definition of "executed agreement" refers to a document embodying the terms of the regulated agreement. When this is read with Regulation 7 - for agreements that have been varied - a copy of the original agreement would not embody the terms. A copy of the agreement as varied would embody its terms.

 

The issue of what is an executed agreement has been interpreted in the High Court. It was held that an executed agreement begins as the credit agreement which is sent to the cardholder when they receive their credit card, therefore establishing what is the original executed agreement. When the agreement has been varied, Regualtion 7 mentioned above applies.

 

To summerise, if the agreement has not been varied, we must send the original executed agreement; this would be the credit agreement which is currently regulated. If the credit agreement has been varied, we must send the current credit agreement as this will contain the terms of the regulated agreement. We have sent you this and the original executed agreement for reference.

 

To address any issue about our lack of compliance with Section 60 of the Consumer Credit Act 1974. Section 60 relates to the form and content of agreements. All Barclaycard credit agreements are in compliance with this. You state that the application form that we provided you, for reference, when you made a request under Section 78 does not adhere to Section 60. This is not a complete copy of your application form, but rather an excerpt to show you signed a contract with us. When you completed your application form, the document would have been presented to you in full, in a legible form, and would have adhered to the requirements under Section 60 of the Consumer Credit Act 1974.

 

I hope this letter has helped with your concerns about the documents you have been supplied with under Section 78 of the Consumer Credit Act 1974. As our response fulfils the obligation under Section 78 of the Consumer Credit Act 1974, you should carry on paying the debt you have accrued on your account. We do not class this account as in dispute, you have been supplied with the relevant documentation under Section 78 of the Consumer Credit Act 1974, and we will carry on with collection services. If you send us further correspondence questioning compliance with these areas of law, we are not obliged to respond beyond the statutory response we have already given you. We would require you to provide comprehensive legal and documentary evidence to support your claim to ascertain whether response is necessary.

[citizenB]

Ah well, it keeps another body off the dole queue.

 

Here is what the OFT have to say.....

 

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/196114-miss-muppet-mbna-costs-4.html

 

 

The original document can be located on posts 35 and 37 in the link above.

 

 

 

 

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 (Typo, she means Creditor I think) ‘...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 (Not sure this is correct, "if any" was inserted to cover Verbal Agreements).

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

 

[UnmoderatetheNet]

I've yet to see a original CCA agreement from Barclaycard.

 

Probably written on paper pressed with unicorn hoofs.

 

Moorcroft will take up the baton on this with there pre-school division....

 

...before handing it global or some other pond life

 

Don't you think it's funny that nobody has bought pre 2004 barclaycard debt?

 

I wonder why....hahahahaha

[MorganaNK]

Does that mean that I should send them the OFT definition of a CCA and then blow a giant raspberry at them?

 

Not really sure where to go from here - doing this on behalf of my mum...

 

Thanks

[42man]

This could be the next option - http://www.consumeractiongroup.co.uk/forum/legal-issues/173201-why-you-shouldnt-use.html This cagger did against Barclays - http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/165349-smt37-morgan-stanley-goldfish-3.html#post2119750

[MorganaNK]

Okay, excuse me for being a pain but I want to be sure here:

 

Send them an amended request as listed in the first link even though there is no court action planned as yet... Mum thinks that she got her Barclaycard via the Woolwich... heaven knows how long ago that was...

 

Thanks

[UnmoderatetheNet]

or just send this and let them pass to a lap dog like Moorcock to pursue.

 

Further to your recent communication dated xxxx in which you demand payment towards the above alleged account.

 

You must realise the agreement you hold does not conform to sections 60(1) and 61(1) of the Consumer Credit Act 1974 and would therefore only be enforceable by a court under s65. However, the absence of any prescribed terms/signature means that a court would be prevented from enforcing it under s127(3).

 

If this went to court and you produced this document I would win. This is backed by case law from the Lords of Appeal in Ordinary (House of Lords) the highest court in the land. Your attention is drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the consumer credit act 1974 the agreement cannot be enforced.

 

You are currently in default of my request and I am therefore advising that the matter is now in dispute. Whilst the matter is in dispute, you are not permitted to ask for any payment, nor am I obliged to offer any payment to you. Furthermore, whilst the dispute remains, you are not entitled to charge any interest on the account, make any further charges to the account or pass the account to anybody else.

 

Please note you may also consider this letter a statutory notice under Section 10 of the Data Protection Act to cease processing any data in relation to this account with immediate effect. This means you must remove all information regarding this account from your own internal records and from my records with any credit reference agencies including any defaults.

 

Should you refuse to comply, you must within 21 days provide me with a detailed breakdown of your reasoning behind continuing to process my data. It is not sufficient to simply state that you have a 'legal right', you must outline your reasoning in this matter and state upon which legislation this reasoning depends.

 

I am granting to you a further 21 days to produce a copy of an executable agreement. After that I will consider that the above account is closed and that you will no longer pursue the alleged debt.

 

After this period you should close the file and cease processing any personal data relating to me on this matter.

 

Yours faithfully,

[MorganaNK]

I am being a complete idiot here, so please forgive me, but I just want to make sure that I don't make things worse for my 70 year old mum...

 

We requested the CCA for the Barclaycard and they sent two photocopied Terms and Conditions. We then sent the Account in Dispute letter and they sent the letter in the opening post of this thread.

 

My next move, if I am reading the replies right, could be one of three things... I fully understand that you cannot tell me what I should or shouldn't do, but I am confused as to which I should think about doing myself...

 

Sorry... and help!

[Huff&Puff]

To be honest, it doesn't matter very much what course of action you pursue, they will ignore whatever you say usually. The point is that they don't have a valid agreement, and so you don't really need to worry. You could just ignore them from now on, on the "in dispute" letter has been sent you are covered until such time as they send a valid CCA, which they cannot. Playing letter ping-pong is an excercise in futility in my opinion. But if you feel that you must write, the letter that Unmoderatethenet composed is excellent.

[MorganaNK]

Thanks for clarifying things Huff&Puff, and thanks for the draft letter Unmoderatethenet - I may put things on hold as I have enough on my plate trying to move home at the moment... x

[Deb T]

Subbing to this, excellent info contained within..

[MorganaNK]

Barclayshark have now moved the debt on to Calder Financial. I sent them the "in dispute" letter, but as I have been running around like a headless chicken I didn't get to send the letter that Unmoderatethenet drafted...

 

Calder have issued a formal demand for payment (as opposed to an informal demand ) - what should I throw at them... and should I add a complaint to various people? Do you mention the complaints in the letters to Barclayshark and Calder?

 

Sorry to ask so many questions... and thanks in advance

[citizenB]

Barclayshark have now moved the debt on to Calder Financial. I sent them the "in dispute" letter, but as I have been running around like a headless chicken I didn't get to send the letter that Unmoderatethenet drafted...

 

Calder have issued a formal demand for payment (as opposed to an informal demand ) - what should I throw at them... and should I add a complaint to various people? Do you mention the complaints in the letters to Barclayshark and Calder?

 

Sorry to ask so many questions... and thanks in advance

 

Bricks, rocks, rotten eggs, squishy tomatoes

 

However, IMHO a short note that just advises them that you are surprised the account has been passed on to them as it is in dispute with the original creditor. Suggest they return it for resolution of your dispute.

 

It has become a bit lengthy now, but you might want to read the debate on the Manchester Test Case in the following link. It would appear a Judge has decided to allow the creditor to supply next to nothing in response to a s78 request. However, acknowledges that if the creditor wants to take court action then they will require the original.

 

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

 

 

HTH

[MorganaNK]

Thank you... they just sent the (what appears to be from reading here) usual T&C - nothing remotely looking like a CCA... not on my planet anyhow - which I will be the first to admit isn't this one!

[Huff&Puff]

BTW, Calder is Sharkleycard, in one of their many guises. Personally I'd just ignore them for the moment.

[MorganaNK]

Thanks Huff&Puff - the way the weather is I probably won't have any option but to ignore them - can't get to a post office!

[MorganaNK]

Well Barclayshark have written back and said that they have fulfilled their legal obligation with regard to the CCA request (by sending T&Cs!) and it appears that they have sold the debt to Risk Management Alternatives who have sent two communications in the space of a few days:

 

"Please accept this letter as notification that, due to non-payment, your above Barclaycard account has been passed to RMA, a third party debt collection agency who are authorised to act as agents for Barclays Bank plc trading as Barclaycard to recover monies outstanding.

 

As stated to you in the Formal Demand recently issued to you by Barclaycard, the balance stated above is now due in full and Barclaycard requests that you pay the amount immediately. Barclaycard will no longer accept any further communication from you therefore you should redirect all communication and payment to RMA..."

 

The letter then goes on saying we will receive no more statements, interest will be reduced to 1% per month, and the PPP has been cancelled. They go on about Credit Reference agencies and all the usual jazz, and finish with the old "If you do not make this payment or phone us to reach an agreement within 7 days, a County Court Judgment may be registered against you."

 

The letter is dated the 13th, but the envelope isn't franked. We are in the process of flitting between two addresses, so all I know is that it was delivered sometime since last Sunday.

 

Yesterday there was a further communication from RMA, this time a postcard, again unfranked... it says:

 

"I CONFIRM THAT I WILL BE CONTACTING YOU ON FRIDAY BETWEEN 8am - 8pm

If inconvenient please telephone 08707 591175 quoting the reference number on the address side of the card. Regards, C RUSSELL"

 

What delightful missive shall I hurl in their general direction? As I have said before, this is my Mum's debt and I am dealing with it for her.

 

Thanks

[lickthewallfatboy]

mine would consist of 2 words

 

the second word being "off"

[lickthewallfatboy]

I am becoming a right grumpy git in my middle age!!

[MorganaNK]

I was thinking along the lines of Foxtrot Oscar myself Hon so don't worry!

[lickthewallfatboy]

so it isn't just me then?

 

this DCA lark doesn't half make a body crabbit!!

[MorganaNK]

No, not just you. DCAs are enough to try the patience of the heavenly host and all the saints that ever were!

 

I mean, it's not rocket science is it - if you say I owe you money, first of all prove I owe you money and then, if you can prove it, work with me to come to an agreement... it's the old vinegar and honey thing again!

[oilyrag]

removed

Edited January 27, 2010 by oilyrag
advice

[MorganaNK]

Hi Oilyrag (love the name - it's what my other half called me when we worked together!)

 

I was thinking the same... but I want to hurl something at them (besides what was wonderfully suggested a few posts back) ...

[citizenB]

Hi Guys,

 

If the debt has been sold, Where is the Notice of Assignment, the default notices, the Notice of Termination all in the prescribed form etc??

If any of these is not in prescribed form----unlawful recission ??

 

Game over mr RMA unless you have it ALL. Perhaps members of the site team could advise in detail as this smells of the heady aroma of stale fish to me.

 

Go to court if you dare dca or p*** off.

 

regards

 

oilyrag.

 

 

I doubt the account has been "sold" or "assigned" to RMA. I think they are part of the B/shark crowd.

 

Morgan, have you been issued with a default notice or termination notice ?

 

The card they have sent to you is probably against OFT guidelines. Notice they are going to be " contacting you on Friday".. Which Friday ?

 

OFT guidelines say they are to communicate in a clear manner. That is hardly clear methinks.

 

IMHO, I would ignore it. They are not supposed to turn up on the doorstep without an appointment and I suspect you wont be making one.

 

If they do turn up on the doorstep, then just ask them politely to go away.