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Are overdrafts covered by cca's

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“Duty to supply copy of overdraft agreement

 

61B.—(1) Where an authorised business overdraft agreement or an authorised non-business overdraft agreement has been made, a document containing the terms of the agreement must be given to the debtor.

(2) The creditor must provide the document referred to in subsection (1) to the debtor before or at the time the agreement is made unless—

(a) the creditor has provided the debtor with the information referred to in regulation 10(3) of the Consumer Credit (Disclosure of Information) Regulations 2010, in which case it must be provided after the agreement is made,

(b) the creditor has provided the debtor with the information referred to in regulation 10(3)©, (e), (f), (h) and (k) of those Regulations, in which case it must be provided immediately after the agreement is made, or

© the agreement is an agreement of a description referred to in regulation 10(4)(b) of those Regulations, in which case it must be provided immediately after the agreement is made.

(3) If the requirements of this section are not observed, the agreement is enforceable against the debtor on an order of the court only (and for these purposes a retaking of goods or land to which the agreement relates is an enforcement of the agreement).”.

10. In section 62 (duty to supply copy of unexecuted agreement)—

(a) in the heading, after “unexecuted agreement” insert “: excluded agreements”;

(b) in subsection (1) after “If” insert “in the case of a regulated agreement which is an excluded agreement”;

© in subsection (3), after the words “regulated agreement”, insert “which is an excluded agreement”;

(d) after subsection (3) insert—

“(4) In this section, “excluded agreement” has the same meaning as in section 61A.”.

11. In section 63 (duty to supply copy of executed agreement)—

(a) in the heading, after “executed agreement” insert “: excluded agreements”;

(b) in subsection (1) after “If” insert “in the case of a regulated agreement which is an excluded agreement”;

© in subsection (5), after the words “regulated agreement”, insert “which is an excluded agreement”;

(d) after subsection (5) insert—

“(6) In this section, “excluded agreement” has the same meaning as in section 61A.”.

12. In section 127 (enforcement orders in cases of infringement)(5) in subsection (1) after paragraph (za), as inserted by regulation 18, insert—

“(zb) section 61B(3) (duty to supply copy of overdraft agreement), or”.

Withdrawal from consumer credit agreement

 

13. After section 66 (acceptance of credit-tokens), insert—

 

“Withdrawal from certain agreements

 

Withdrawal from consumer credit agreement

 

66A.—(1) The debtor under a regulated consumer credit agreement, other than an excluded agreement, may withdraw from the agreement, without giving any reason, in accordance with this section.

(2) To withdraw from an agreement under this section the debtor must give oral or written notice of the withdrawal to the creditor before the end of the period of 14 days beginning with the relevant day.

(3) For the purposes of subsection (2) the relevant day is whichever is the latest of the following—

(a) the day on which the agreement is made;

(b) where the creditor is required to inform the debtor of the credit limit under the agreement, the day on which the creditor first does so;

© in the case of an agreement to which section 61A (duty to supply copy of executed consumer credit agreement) applies, the day on which the debtor receives a copy of the agreement under that section or on which the debtor is informed as specified in subsection (3) of that section;

(d) in the case of an agreement to which section 63 (duty to supply copy of executed agreement: excluded agreements) applies, the day on which the debtor receives a copy of the agreement under that section.

(4) Where oral notice under this section is given to the creditor it must be given in a manner specified in the agreement.

(5) Where written notice under this section is given by facsimile transmission or electronically—

(a) it must be sent to the number or electronic address specified for the purpose in the agreement, and

(b) where it is so sent, it is to be regarded as having been received by the creditor at the time it is sent (and section 176A does not apply).

(6) Where written notice under this section is given in any other form—

(a) it must be sent by post to, or left at, the postal address specified for the purpose in the agreement, and

(b) where it is sent by post to that address, it is to be regarded as having been received by the creditor at the time of posting (and section 176 does not apply).

(7) Subject as follows, where the debtor withdraws from a regulated consumer credit agreement under this section—

(a) the agreement shall be treated as if it had never been entered into, and

(b) where an ancillary service relating to the agreement is or is to be provided by the creditor, or by a third party on the basis of an agreement between the third party and the creditor, the ancillary service contract shall be treated as if it had never been entered into.

(8) In the case referred to in subsection (7)(b) the creditor must without delay notify any third party of the fact that the debtor has withdrawn from the agreement.

(9) Where the debtor withdraws from an agreement under this section—

(a) the debtor must repay to the creditor any credit provided and the interest accrued on it (at the rate provided for under the agreement), but

(b) the debtor is not liable to pay to the creditor any compensation, fees or charges except any non-returnable charges paid by the creditor to a public administrative body.

(10) An amount payable under subsection (9) must be paid without undue delay and no later than the end of the period of 30 days beginning with the day after the day on which the notice of withdrawal was given (and if not paid by the end of that period may be recovered by the creditor as a debt).

(11) Where a regulated consumer credit agreement is a conditional sale, hire-purchase or credit-sale agreement and—

(a) the debtor withdraws from the agreement under this section after the credit has been provided, and

(b) the sum payable under subsection (9)(a) is paid in full by the debtor,

title to the goods purchased or supplied under the agreement is to pass to the debtor on the same terms as would have applied had the debtor not withdrawn from the agreement.

(12) In subsections (2), (4), (5), (6) and (9)(a) references to the creditor include a person specified by the creditor in the agreement.

(13) In subsection (7)(b) the reference to an ancillary service means a service that relates to the provision of credit under the agreement and includes in particular an insurance or payment protection policy.

(14) For the purposes of this section, an agreement is an excluded agreement if it is—

(a) an agreement for credit exceeding £60, 260,

(b) an agreement secured on land,

© a restricted-use credit agreement to finance the purchase of land, or

(d) an agreement for a bridging loan in connection with the purchase of land.”.

14. In section 67 (cancellable agreements)—

(a) at the beginning insert “(1) Subject to subsection (2)”;

(b) at the end insert “(2) This section does not apply where section 66A applies.”.

15. In section 82 (variation of agreements), after subsection (6) insert—

“(6A) If—

(a) the earlier agreement is an agreement to which section 66A (right of withdrawal) applies, and

(b) the modifying agreement is made within the period during which the debtor may give notice of withdrawal from the earlier agreement (see section 66A(2)),

then, whether or not the modifying agreement would, apart from this subsection, be an agreement to which section 66A applies, it shall be treated as such an agreement in respect of which notice may be given under subsection (2) of that section within the period referred to in paragraph (b) above.

(6B) Except as provided for under subsection (6A) section 66A does not apply to a modifying agreement.”.

Overdrafts etc

 

16. In section 55 (disclosure of information) for subsection (2) substitute—

“(2) If regulations under subsection (1) are not complied with, the agreement is enforceable against the debtor or hirer on an order of the court only (and for these purposes a retaking of goods or land to which the agreement relates is an enforcement of the agreement).”.

17.—(1) Section 74 (exclusion of certain agreements from Part V) is amended as follows.

(2) For subsections (1) and (2) substitute—

“(1) Except as provided in subsections (1A) to (2), this Part does not apply to—

(a) a non-commercial agreement,

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account,

© a debtor-creditor agreement to finance the making of such payments arising on, or connected with, the death of a person as may be prescribed, or

(d) a small debtor-creditor-supplier agreement for restricted-use credit.

(1A) Section 56 (antecedent negotiations) applies to a non-commercial agreement.

(1B) Where an agreement that falls within subsection (1)(b) is an authorised business overdraft agreement the following provisions apply—

(a) section 55B (assessment of creditworthiness);

(b) section 56 (antecedent negotiations);

© section 60 (regulations on form and content of agreements);

(d) section 61B (duty to supply copy of overdraft agreement).

(1C) Where an agreement that falls within subsection (1)(b) is an authorised non-business overdraft agreement the following provisions apply—

(a) section 55 (regulations on disclosure of information);

(b) section 55B (assessment of creditworthiness);

© section 55C (copy of draft consumer credit agreement);

(d) section 56 (antecedent negotiations);

(e) section 60 (regulations on form and content of agreements);

(f) section 61B (duty to supply copy of overdraft agreement).

(1D) Where an agreement that falls within subsection (1)(b) would be an authorised non-business overdraft agreement but for the fact that the credit is not repayable on demand or within three months the following provisions apply—

(a) section 55 (regulations on disclosure of information);

(b) section 55A (adequate explanations);

© section 55B (credit assessment);

(d) section 55C (copy of draft consumer credit agreement);

(e) section 56 (antecedent negotiations);

(f) section 60 (regulations on form and content of agreements);

(g) section 61 (signing of agreement);

(h) section 61A (duty to supply copy of executed agreement);

(i) section 66A (withdrawal from consumer credit agreement).

(1E) In the case of an agreement that falls within subsection (1)(b) but does not fall within subsection (1B), (1C) or (1D), section 56 (antecedent negotiations) applies.

(1F) The following provisions apply to a debtor-creditor agreement to finance the making of such payments arising on, or connected with, the death of a person as may be prescribed—

(a) section 55 (regulations on disclosure of information);

(b) section 55A (adequate explanations);

© section 55B (assessment of creditworthiness);

(d) section 55C (copy of draft consumer credit agreement);

(e) section 56 (antecedent negotiations);

(f) section 60 (regulations on form and content of agreements);

(g) section 61 (signing of agreement);

(h) section 61A (duty to supply copy of executed agreement);

(i) section 66A (withdrawal from consumer credit agreement).

(2) The following provisions apply to a small debtor-creditor-supplier agreement for restricted-use credit—

(a) section 55 (regulations on disclosure of information);

(b) section 56 (antecedent negotiations);

© section 66A (withdrawal from consumer credit agreement).”.

(3) In subsection (3) for “Subsection (1)(b) or © applies” substitute “Subsection (1)© applies”.

(4) Omit subsection (3A).

(5) In subsection (4) for “(1)© or (2)”, in both places, substitute “(1)(d)”.

18. In section 127 (enforcement orders in cases of infringement)(6) in subsection (1) before paragraph (a) insert—

“(za) section 55(2) (disclosure of information), or”

19.—(1) Section 189 (definitions)(7), is amended as follows.

(2) In subsection (1) after the definition of “associate” insert—

““authorised business overdraft agreement” means a debtor-creditor agreement which provides authorisation in advance for the debtor to overdraw on a current account, where the agreement is entered into by the debtor wholly or predominantly for the purposes of the debtor’s business (see subsection (2A));

“authorised non-business overdraft agreement” means a debtor-creditor agreement which provides authorisation in advance for the debtor to overdraw on a current account where—

(a)

the credit must be repaid on demand or within three months, and

 

(b)

the agreement is not entered into by the debtor wholly or predominantly for the purposes of the debtor’s business (see subsection (2A));”.

 

 

 

(3) After subsection (2) insert—

“(2A) For the purpose of the definitions of “authorised business overdraft agreement” and “authorised non-business overdraft agreement” subsections (2) to (5) of section 16B (declaration by the debtor as to the purposes of the agreement) apply.”.

20.—(1) Schedule 2, Part II (examples) is amended as follows.

(2) In Example 17 omit “if covered by a determination under section 74(3)”.

(3) In Example 18 omit “if covered by a direction under section 74(3)”.

Current account overdrafts

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DNs on overdrafts.

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/237096-overdrafts-covered-ccas-2.html

 

If you go over your limit say by a bank charge being applied, or the bank choosing to pay a direct debit even though insufficient overdraft was left to service the payment, the bank have given a 'tacit' agreement to provide the overdraft.

 

In these circumstances, they would write to you and ask you to pay enough in to bring your overdraft back within it's limit.

 

If you don't do this, what usually happens is that you are issued with a default notice under Section 87(1) of the CCA 1974, where they require you to pay enough in or else.......

 

If this situation remains as it is, then within a period of three months and one week the bank is supposed to write to you informing you of the annual rate of interst for the debt.

 

If they don't do this, then they lose the right of protection of Part V of the CCA and now need a credit agreement, which of course they have not got, cos you never signed one!!!!

 

No credit agreement=potentially not enforcible.

 

If you read the lengthy post above which goes on about The Determination, it's all in there.


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thanks cerb..................

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Am I right in thinking if you have an overdraft and disputed charges and the bank decides to call in the overdraft, then DONT pursue reclaiming the charges in court - what you want is the bank/DCA to take you to court for the full amount then rely on the burden of proof (assuming no arrangement is reached)?

 

cheers

 

FTD

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Been reading this thread with interest and am am slowly understanding it.

 

I did a CCA S78 request to my bank and got this reply "A ****account is a current account and these are not regulated by the CCA. Where a current account has an overdraft, then the overdraft element is partially regulated by the CCA. In the case of an overdraft, we must comply with the CCA requirements in relation to taking action for the recovery for the debt, so any notice we serve on a customer must comply with the CCA. However the original agreement to grant an overdraft does not have to meet the formal agreement requirements of the CCA, therefore your request to provide a copy of the credit agreement is not applicable. We therefore return your £1 postal order".

 

However when we opened this account we asked for no overdraft, they just gave us it about a year afterwards and then due to a change in circumstances and lots of bank charges later it stands at over £5k. Went down Hardship route, got nowhere with them or FOS, went down F&F route and they are refusing to accept my payment, so want to get them good and proper on this now, How should I reply to them, I know alot of jdes26 post above will apply, but there doesnt seem to be a template letter anywhere which raises these points? Or could someone point me in the right direction please?

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Thanks for the useful info jdes:)

 

My bank (Lloyds) sent out an 'Enforcement Notice' for my current account/ overdraft - which said it was served under Section 76 (1) of the Consumer Credit Act 1974.........shouldn't it have referred to Section 78?

 

Landy x


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To me, it looks like playing the 'account in dispute' ping pong game with them and whichever DCA they pass the account onto and take it from there!

As far as I can make out, them taking us to court seems better to defend rather than trying to claim back charges, I could be completely wrong but this is how it looks to me, looks like i'll be doing this shortly too.

 

Unless an arrangement is made then the credit files going to start getting trashed by them (if not already) - if it goes to court there's a couple of avenues open to defend - am I right (anyone)?

 

If we've already disputed charges with the bank without starting court action then that in itself puts the account in dispute.

 

FTD

 

Been reading this thread with interest and am am slowly understanding it.

 

I did a CCA S78 request to my bank and got this reply "A ****account is a current account and these are not regulated by the CCA. Where a current account has an overdraft, then the overdraft element is partially regulated by the CCA. In the case of an overdraft, we must comply with the CCA requirements in relation to taking action for the recovery for the debt, so any notice we serve on a customer must comply with the CCA. However the original agreement to grant an overdraft does not have to meet the formal agreement requirements of the CCA, therefore your request to provide a copy of the credit agreement is not applicable. We therefore return your £1 postal order".

 

However when we opened this account we asked for no overdraft, they just gave us it about a year afterwards and then due to a change in circumstances and lots of bank charges later it stands at over £5k. Went down Hardship route, got nowhere with them or FOS, went down F&F route and they are refusing to accept my payment, so want to get them good and proper on this now, How should I reply to them, I know alot of jdes26 post above will apply, but there doesnt seem to be a template letter anywhere which raises these points? Or could someone point me in the right direction please?

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This thread is interesting http://www.consumeractiongroup.co.uk/forum/hsbc-bank/265817-hsbc-help-desperatley-needed.html

HSBC have written to the op baldly stating that the ods are NOT covered by the CCA 1974 and further they have not claimed part V exemption in correspondence to the customer


Advice and comments posted by The Debt Star reflect only my personal opinion and it is up to you alone to decide what action you should take. You should always seek independent legal advice from your own qualified legal advisor.

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Hi sorry for pm ing you some people dont like it this is in response to a cca request for overdrafts and if you get the reply saying they anrt covered by a cca, you had the perfect reply have you put this on a thread if not any chance you could? or pm it to me?

 

Thanks in advance

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ive sent afew letters to barclays and getting nowhere , should i state that the account was over the limit for over 3 months and i never recieved a letter stating the annual rate of interest so there right to protection of part v of the cca is invalid and now requires a credit agreement ? cheers

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David ...

 

I don't know if I would alert them to this fact until/if they issue court papers ...

 

IMHO you are giving them advanced notice of their boob, and giving them every chance of trying to conjure something up ...

 

I would just keep quite, just keep sending the "in dispute" letter asking for a copy of your CCA, by all means quote what sections of the Act covers it, let them keep coming back saying "oh not it isn't" ... its stalemate ... IF they issue court papers, you check what papers they are using in their defence .... ITS THEN that I would reveal as part of MY defence what their failings are ... its too late for them to do anything about it at that point...

 

If you alert them before this, you never know what they may conjure up and will appear in your "file", just to try and "prove" that they did send the letter to you ... but you simply didn't receive .... its a stunt that has been known to happen ..... just keep this ace up your sleeve ... for now ..

 

Robin .. x

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listen guys, i am seriously confused by this determination thing, i have read it like 3 times, am i correct to say that the banks comply with "determination" simply by contacting OFT only once and they do not have to contact OFT every time they apply overdraft
link3.gif
individually and by notifying the debtor with all the infor (ex. APR) ?

it seems that all the banks would have normally complied with such simple stuff. or am i missing something?

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listen guys, i am seriously confused by this determination thing, i have read it like 3 times, am i correct to say that the banks comply with "determination" simply by contacting OFT only once and they do not have to contact OFT every time they apply overdraft
link3.gif
individually and by notifying the debtor with all the infor (ex. APR) ?

it seems that all the banks would have normally complied with such simple stuff. or am i missing something?

 

yes that seems to be right and they also claim to be able to comply simply by declaring compliance with the detremination in leaflets and on their wbsites


Mozzone

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Taking on the bloodsuckers

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