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OFT - Lenders must not mislead borrowers that their debts are enforceable, when in fact they are not

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BBC News - Lenders warned not to mislead customers over debts

 

Lenders warned over debt recovery

 

Lenders must not mislead borrowers that their debts are enforceable, when in fact they are not, the Office of Fair Trading (OFT) says.

The regulator also says many debtors have, in turn, been misled about their ability to escape their debts.

 

The OFT's comments are part of an intervention in a series of High Court test cases about the enforceability of debts under the Consumer Credit Act.

 

The outcome could affect thousands of potential courts cases.

 

The OFT has supplied its draft guidance on part of the Consumer Credit Act (CCA) to Judge Waksman, who is hearing the cases in Manchester.

 

"The OFT's decision to prepare guidance at this time has primarily resulted from our concern that debtors are being misled as to the meaning and interpretation of sections 77-79 [of the Act] in particular," the OFT said in a letter to the judge.

 

"And on the other hand concern that some creditors appear not to understand the nature and extent of their obligations under these sections," it added.

Edited by cerberusalert
Edited for copyright reasons

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Hmmm a reconstituted copy can be used to satisfy a s78 request where the lender has "mislaid" / "lost" then according to the OFT...

 

S.


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Deal with your debts:

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'It is important to remember that the purpose of these sections is to provide information to consumers, not to provide a method for consumers to avoid paying their debts '

 

quite right

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Hmmm a reconstituted copy can be used to satisfy a s78 request where the lender has "mislaid" / "lost" then according to the OFT...

 

S.

 

 

Yes but only to satisfy the request NOT to enforce the debt. For that they must have a signed true copy something the OFT seems to have forgotten in it's attempts to bend over backwards to placate the lenders

 

Incidentally they haven't 'mislaid or lost' the agreement They destroyed them ages ago in the interests of greater profits why store costly documents when you can rely either on microfiche or computers to store the info for much less cost. Now their greed is coming back to bite them

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Yes but only to satisfy the request NOT to enforce the debt. For that they must have a signed true copy something the OFT seems to have forgotten in it's attempts to bend over backwards to placate the lenders

 

Incidentally they haven't 'mislaid or lost' the agreement They destroyed them ages ago in the interests of greater profits why store costly documents when you can rely either on microfiche or computers to store the info for much less cost. Now their greed is coming back to bite them

 

Absolutely agree both points, was just picking something out of the bbc newsitem for discussion :-)

 

I was tempted to put in after the "mislaid / lost" Translation:Shredded :-)


Are You as Anonymous on CAG as You Think You Are? *Link*

 

The CAG is a free help site,should you be offered help that requires payment,please report it to site team.

 

Deal with your debts:

STEP ONE - Dont Panic! | STEP TWO - Priority & Non Priority Debts | STEP THREE - Personal Budget Sheet | STEP FOUR - A SAFE bank Account | STEP FIVE - Dealing with Priority Debts | STEP SIX - Non-priority Debts | STEP SEVEN - Non-Priority Debt-Repayment Opt1 | STEP EIGHT - Non-Priority Debt-Repayment Opt2 | STEP NINE - Perils of Consolidation | STEP TEN - RE-Evaluate Frequently

 

***** SERIOUSLY IN DEBT, DONT KNOW WHAT TO DO, TRY NationalDebtLine's MoneySteps *****

 

 

IMPORTANT: Please take my advice in the spirit it is given and on the basis that I am expressing my opinion, These opinions are not endorsed by CAG in anyway and are offered informally without prejudice or warranty of any kind. These opinions are solely based upon the knowledge I've gained from this fantastic site and life in general. I have NO legal training.

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Hmmm a reconstituted copy can be used to satisfy a s78 request where the lender has "mislaid" / "lost" then according to the OFT...

 

S.

 

Yes but they also say a set of the latest T&Cs is not such. Also they (the creditors) are not allowed to mislead the customer into thinking they have the original if they don't.

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No its the OFT who don't understand THEIR obligations. As for giving guidance to the court don't make me larf

 

Must admit, did make me splutter when I read that!

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Well Cabots licence should be revoked immediately in my opinion !!!


The Grand essentials of happiness are: something to do, something to love, and something to hope for.

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The thing is, and I know people here agree from reading various threads, none of us want to avoid paying our debts. We want to pay those that are enforceable, we want to cooperate and pay as much we can afford, we want to work with the person we owe the money to in a calm, rational and understanding way. What we don't want is to be bullied, abused, ridiculed and generally treated as if we are a plague of filth.


"I am prepared to meet my Maker. Whether my Maker is prepared for the great ordeal of meeting me is another matter" - Sir Winston Churchill

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The thing is, and I know people here agree from reading various threads, none of us want to avoid paying our debts. We want to pay those that are enforceable, we want to cooperate and pay as much we can afford, we want to work with the person we owe the money to in a calm, rational and understanding way. What we don't want is to be bullied, abused, ridiculed and generally treated as if we are a plague of filth.

 

Yes, but treating people like filth makes for bigger and quicker profits. :rolleyes:

 

The biggest problem is that law and regulation should be stopping that; but it fails miserably. :(

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Yes, but treating people like filth makes for bigger and quicker profits. :rolleyes:

 

The biggest problem is that law and regulation should be stopping that; but it fails miserably. :(

 

It actually amazes me that, across the board, these DCAs think that their behaviour is the acceptable way to go. Haven't they ever heard the saying that you catch more flies with honey than with vinegar???


"I am prepared to meet my Maker. Whether my Maker is prepared for the great ordeal of meeting me is another matter" - Sir Winston Churchill

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'It is important to remember that the purpose of these sections is to provide information to consumers, not to provide a method for consumers to avoid paying their debts '

 

quite right

 

Not sure who you mean but rollocks! if you mean debtors

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Yes but they also say a set of the latest T&Cs is not such. Also they (the creditors) are not allowed to mislead the customer into thinking they have the original if they don't.

 

err... no it doesnt.

 

It states (on the beeb report) that in a letter to the judge the OFT state:-

 

And on the other hand concern that some creditors appear not to understand the nature and extent of their obligations under these sections

and what is that obligation?, well further down in the report it states:-

 

In particular, the regulator points out that it is perfectly legal and properfor a bank that has lost the original loan agreement, or whose copy is illegible, to supply an accurate "reconstituted" version instead, to show that the agreement did in fact include the information specified by the Act

So they can send a reconstituted agreement and no they dont have to admit they dont have the agreement, they will require it in court hopefully tho.

 

just my thoughts...

 

S.


Are You as Anonymous on CAG as You Think You Are? *Link*

 

The CAG is a free help site,should you be offered help that requires payment,please report it to site team.

 

Deal with your debts:

STEP ONE - Dont Panic! | STEP TWO - Priority & Non Priority Debts | STEP THREE - Personal Budget Sheet | STEP FOUR - A SAFE bank Account | STEP FIVE - Dealing with Priority Debts | STEP SIX - Non-priority Debts | STEP SEVEN - Non-Priority Debt-Repayment Opt1 | STEP EIGHT - Non-Priority Debt-Repayment Opt2 | STEP NINE - Perils of Consolidation | STEP TEN - RE-Evaluate Frequently

 

***** SERIOUSLY IN DEBT, DONT KNOW WHAT TO DO, TRY NationalDebtLine's MoneySteps *****

 

 

IMPORTANT: Please take my advice in the spirit it is given and on the basis that I am expressing my opinion, These opinions are not endorsed by CAG in anyway and are offered informally without prejudice or warranty of any kind. These opinions are solely based upon the knowledge I've gained from this fantastic site and life in general. I have NO legal training.

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The way I read it they are saying that a case brought based on a failure to comply with sec78 will fail as the creditor can reconstruct an agreement & provided it's NOT conjectured...............In other words it must be a TRUE copy............ That does NOT mean (nor should it) that the creditor can use it to enforce the debt ........... the problem will be getting the courts to understand that

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The report claims that:

 

But the OFT goes on to advise that lenders would be acting unfairly, and potentially in breach of their consumer credit licenses, if they misled borrowers by:

hiding or disguising the fact that there was never a proper signed agreement in the first place

• providing only a copy of the current terms and conditions, not the original ones

• confusing the borrower as to who they should send an information request after selling the debt to a debt collection company

• failing to preserve data so the borrower cannot be given an up to date statement of account.

 

Now whether that opinion can be extended to include cases where it did once exist but has now been destroyed is unclear. :???: Or for cases where an agreement is not a properly executed one?

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Not sure who you mean but rollocks! if you mean debtors

 

 

Sorry it seemed obvious to me. I put their in red to indicate fully documented legally enforceable debts that can be proven in Law to be their debt.

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The OFT's draft guidance says: "No communications or requests for payment should in any way threaten court action or other enforcement of the debt where the creditor or owner is aware that it cannot and will not be entitled so to enforce the agreement."

"The creditor or owner should make it clear in communications to the debtor that the debt is in fact unenforceable," it adds.

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Has anyone seen an actual draft copy of these guidelines?

 

I know CAB must have seen them, since they published a consultation response on their site.

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The OFT's draft guidance says: "No communications or requests for payment should in any way threaten court action or other enforcement of the debt where the creditor or owner is aware that it cannot and will not be entitled so to enforce the agreement."

"The creditor or owner should make it clear in communications to the debtor that the debt is in fact unenforceable," it adds.

 

:lol::lol::lol::lol::lol::lol::lol::lol::lol::lol:

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The lenders/DCAs ignore the current guidelines, so I presume they will just ignore any new ones as well. :(

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Sorry it seemed obvious to me. I put their in red to indicate fully documented legally enforceable debts that can be proven in Law to be their debt.

 

 

Gotcha;)

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The OFT's draft guidance says: "No communications or requests for payment should in any way threaten court action or other enforcement of the debt where the creditor or owner is aware that it cannot and will not be entitled so to enforce the agreement."

"The creditor or owner should make it clear in communications to the debtor that the debt is in fact unenforceable," it adds.

 

 

I have often said that the current business model of DCAs relies upon non-compliant behaviour, and this sort of regulation is what is needed to make them think again.

 

There are two potential effects of this: one is to make statute-barred and otherwise unenforceable debts almost worthless to debt buyers, and the other is that DCAs will have to apply proper diligence, which will increase their costs.

 

Goodbye, Mackenzie Hall et al...

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Yes - this news will be put to VERY good use! :)

 

So who is going to upset the luvvies at FOS who think a scribble on a bog roll amounts to a fair and enforcable agreement that permits a shark to hunt one to the depths of despair then?

 

These are the apathetic bank puppets who need waking up and we have also recently heard that whistlblowers in the FOS have grassed up the issue so....

 

Pressure needed where it will help most!

Edited by questioner

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