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No agreement for a current account

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Please could some kind person advise me as to the effect of HSBC not having the current account agreement that I signed when I first opened the account ?

 

How would this affect their ability to enforce repayment of an overdraft attached to this account ?

 

 

Many thanks.

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Hi,

 

Current Accounts are not covered by the CCA, Overdrafts have part V exemptions (form and content) from the Act. This does not mean that they are exempt from the Act. The credit agreement would be in the form of a letter from the bank stating the amount of credit, the APR, charges and cancellation rights. This type of agreement would not be signed by the debtor.

 

Overdrafts come under section 10 of the Consumer Credit Act.

 

10.—(1) For the purposes of this Act—

(a) running-account credit is a facility under a personal credit agreement whereby the debtor is enabled to receive from time to time (whether in his own person, or by another person) from the creditor or a third party cash, goods and services (or any of them) to an amount or value such that, taking into account payments made by or to the credit of the debtor, the credit limit (if any) is not at any time exceeded; and

(b) fixed-sum credit is any other facility under a personal credit agreement whereby the debtor is enabled to receive credit (whether in one amount or by

instalments).

(2) In relation to running-account credit, " credit limit" means, as respects any period, the maximum debit balance which, under the credit agreement, is allowed to stand on the account during that period, disregarding any term of the agreement allowing that maximum to be exceeded merely temporarily.

(3) For the purposes of section 8(2), running-account credit shall be taken not to exceed the amount specified in that subsection (" the specified amount") if—

(a) the credit limit does not exceed the specified amount; or

(b) whether or not there is a credit limit, and if there is, notwithstanding that it

exceeds the specified amount,—

(i) the debtor is not enabled to draw at any one time an amount which, so far as

(having regard to section 9(4)) it represents credit, exceeds the specified

amount, or

(ii) the agreement provides that, if the debit balance rises above a given

amount (not exceeding the specified amount), the rate of the total charge for credit increases or any other condition favouring the creditor or his associate comes into operation, or

(iii) at the time the agreement is made it is probable, having regard to the

terms of the agreement and any other relevant considerations, that the debit balance will not at any time rise above the specified amount.

 

Regards.

 

Scott.


 
 

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