Default Removal - katenandpete v HSBC **WON**

[Lizzy]

What an interesting thread. Keep at it Kateandpete.

[ppauls150]

Finally someone has had success. Look here

Click Link Here

[kateandpete]

I've been giving all this more thought, see my comment in http://www.consumeractiongroup.co.uk/forum/legalities/27877-lenders-havent-sent-me.html.

 

In my reply to their thoroughly ridiculous letter above, i'm going to offer them a payment in full and final settlement. The amount will be what's on the latest statement - minus all interest since their default - minus all unlawful penalties and interest thereon. I'll attach conditions: 1. This does not acknowledge the agreement. 2. The unsubstantiated defaults must be removed.

If they don't agree, then surely this would be seen as unreasonable by the court. I'll deal with my chagrin that they are getting away with breaking the law by reporting them to trading standards.

 

I think this strikes the right balance between my willingness to pay the lawful part of the debt, and my ambitions to hold them to account for their multiple unlawful activities.

Tinks, SB, barracad, other knowledgeable people - i'd like to know what you think.

[pugsley]

I would take them to court personally, they haven't got the agreement and they will back out unless they are complete idiots, although from their letter above that may be the case lol

[Tinkerbelle]

I've been giving all this more thought, see my comment in http://www.consumeractiongroup.co.uk/forum/legalities/27877-lenders-havent-sent-me.html.

 

In my reply to their thoroughly ridiculous letter above, i'm going to offer them a payment in full and final settlement. The amount will be what's on the latest statement - minus all interest since their default - minus all unlawful penalties and interest thereon. I'll attach conditions: 1. This does not acknowledge the agreement. 2. The unsubstantiated defaults must be removed.

If they don't agree, then surely this would be seen as unreasonable by the court. I'll deal with my chagrin that they are getting away with breaking the law by reporting them to trading standards.

 

I think this strikes the right balance between my willingness to pay the lawful part of the debt, and my ambitions to hold them to account for their multiple unlawful activities.

Tinks, SB, barracad, other knowledgeable people - i'd like to know what you think.

 

It looks fairly reasonable to me.

[Tobes]

Would you offer directly to HSBC or through a DCA? I agree that you should take all the post-default monies off, but you seem to be not using the double whammy of 'you haven't provided default notice, default data is inaccurate, get it off, though either way contract is over so you have no right to continue to disclose data to the CRAs, get it off'...But yes, you're right a money offer might sway HSBC but would definitely look good to any court

[kateandpete]

In my case, there's no DCA involved (yet). So that makes it simpler. Here is the letter, constructive comments greatly appreciated

 

HSBC Bank Plc

365 Chartwell Square

Southend-On-Sea

SS99 2UU

 

25th September 2006

 

LETTER BEFORE ACTION

 

Dear Ms. Tucker,

 

Unenforceable Account Number: XXXX XXXX XXXX XXXX

 

I write in reply to your letter dated 18th September.

 

Thank you for confirming my suspicion that the assertion in your letter dated 30th August is incorrect. It is my view that you would be failing in your fiduciary duty to discard running-account credit agreements older than six years as a matter of course.

 

I am frankly shocked by the fact that you have been unable to locate my original agreement. Until this matter came to my attention, I regarded HSBC as a responsible financial institution that treated its customer’s documentation with due care. I will have more to say on this matter with regard to default notices later in this letter.

 

You bring to my attention Regulation 3 (2) of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983. You assert that this excuses you from providing a copy of the original signed agreement. You then enclose a copy of the terms and conditions and a copy of an unexecuted agreement form. Your assertion is utterly ridiculous.

 

I feel that I should not have to explain the consumer credit legislation to a consumer credit licence holder and will be reporting this matter to Trading Standards, nevertheless I will explain. Regulation 3 (2) of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 refers to copies of unexecuted agreements that must be supplied to the customer on commencement of the contract. Usually, this means that if a consumer successfully applies for a credit facility, you must send an agreement for signature and return and a copy for the customer to keep for his records. This is the copy referred to in the regulations. My request under Section 78(1) of the CCA 1974 obliges you to provide a true copy of the executed agreement. This includes my signature.

 

Consider the hypothetical situation where what you assert is correct. Then any unscrupulous lender could send me a copy of their current terms and conditions and a copy of an unexecuted agreement. They could then demand payment of a debt attributable to another person or even a fictitious debt. I am sure that you would agree this fits the standard definition of extortion.

 

Because of your failure to supply a true copy of the executed agreement, you have not complied with the requirements of the Consumer Credit Act and my agreement is not enforceable at law.

 

In your letter you go on to make a rather confused statement concerning existence of the debt and the matter of reporting information to the credit reference agencies. These are two separate issues and I will thus deal with them separately.

 

Reporting of information to credit reference agencies:

 

With regards to this issue, whether the debt exists or not is immaterial. The agreement is unenforceable. Therefore there is no longer permission for you to process my data. You quote the “legitimate interests of the lender” mentioned in Schedule 2 of the Data Protection Act 1998 as reason to continue processing my data. This naturally presupposes that you have written permission to disclose the data. Please remind yourself of the arguments I set out in the covering letter sent with the Data Protection Act Section 10 Statutory Notice on the 22nd August. Specifically, I remind you that any non-agreed disclosure of personal data to third parties without written permission is a criminal offence under the Data Protection Act. Section 35 only allows exemption to this clause if disclosure is necessary in the detection of crime and disclosure is so ordered by a Court. This is plainly not the case here. For this reason I must insist you ensure the entire removal of any reference to this unenforceable account kept by the credit reference agencies immediately.

 

Returning to my original request under the Consumer Credit Act 1974. The reason I made this was to give you the opportunity to substantiate a default notice placed on my credit reference files. I have no recollection of ever receiving such a notice. The fact that you are unable to supply a true copy of the executed agreement, while deplorable and unlawful, is merely an adjunct to my true intention in this matter: to remove this unsubstantiated default. Even if you were, at this late stage, to produce a true copy of my executed agreement and a Court ordered that the agreement be reinstated, I would insist that this default notice be removed as you have not complied with the procedures set out in Sections 87, 88 and 89 of the CCA. Thus you would also have violated Schedule 1, Part 1, Principle 4 of the DPA.

 

Existence of the debt:

 

In the paragraph I referred to above as ‘confused’, you remind me that the debt still exists. I agree that this is the case. Unlike yourselves, I am prepared to honour my obligations.

 

My proposals to resolve this matter:

 

I recently made a DPA Subject Access Request for all data you hold on me. I thank you for your prompt compliance with my request. I note that you have applied a number of “arrears charges” to the account. I now understand that this regime of fees is unlawful at common law, statute and recent consumer legislation. If you say that they are not, then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put by as result of my breaches, in order to reassure me that your penalties really do reflect your costs.

 

Additionally, it has now been confirmed that your particularly high level of penalties are considered to be unfair per se by the OFT who reported on the 5th April 2006 and are therefore presumed to be unlawful in the absence of specific proof to the contrary.

 

I calculate that you have taken £120.00 in unlawful penalties and £46.96 in interest charged thereon. I enclose a schedule of these charges and interest for your information. Additionally, you have added a further penalty charge and interest to the account since your default on the 13th July 2006 totalling £20.00. This is also unwarranted.

 

I am prepared to make an offer in full and final settlement of the debt. Taking the current balance and subtracting unlawful and unwarranted charges produces a figure of £408.60. I offer this amount on the following conditions.

• This offer in no way acknowledges the unenforceable agreement.
  
• You must ensure the full removal of all references to this unenforceable account kept by the credit reference agencies. This includes, but is not limited to, all default notices.

Upon confirmation that you accept these conditions I will seek further confirmation from the credit reference agencies. When I have been assured by them that my requests have been fulfilled, I will forward a cheque in payment of the above amount.

 

I am prepared to give you a further fourteen days to respond to this offer. Should I either not hear from you within this time frame, or am not satisfied with your response, I will commence Court action without further notice. Please note that if this matter proceeds to Court action, I will bring this offer to the attention of the Court. I believe this is more than reasonable, given your breaches of the law.

 

Yours sincerely,

 

 

 

kateandpete

[ppauls150]

Only one word for that WOW

[jimfishybob]

F****** brilliant.

[Lizzy]

Cannot wait to see what you get back from that.

[kateandpete]

Hmm, discovered an ambiguity in my letter folks. They've tried to use Data Protection Act Schedule 2, Paragraph 6(1) to continue processing my data. I should have been clearer here and said that Section 10 only allows exemptions specified in paragraphs 1 - 4 and definitely not 5 and 6.

They might use this to delay - ah well, let's see what they say.

[kateandpete]

I think i've hit a few panic buttons down at canary wharf.

 

Received 6 (yes six!) letters from them today. The general theme is the same but there are differing degrees of grammatical errors in all of them. One is signed personally, not pp'd.

 

The poor dear is seeking clarification from their legal department and is asking for more time.:grin:

 

I think not. Why should i have to suffer the consequences of an erroneous default on my files one day longer? I am going to say, "fine, have some more time. But remove the default while you think about my settlement offer. Otherwise i shall be toddling off to the Court right about now."

[kateandpete]

I've had a reply from HSBC to my letter - and it's a bit of a bitch slap. If what they are saying is correct then we are all misunderstanding CCA s.78 requests and the process of registering defaults. This affects a lot of people on here so I'm going to reproduce the full letter, bear with it folks.

 

Dear kateandpete,

 

Thanks you for your letter of the 25th September 2006 the contents of which are noted. Firstly I would like to stress that HSBC BANK Plc (the "Bank") does not routinely discard agreements. It is true that the original agreement in respect of your account cannot be located, but this is not in any way as a result of some set procedure for discard.

 

I have spoken to the Bank's solicitors and they advise me that that section 189(1) of the Consumer Credit Act states that a copy of an agreement shall be construed in accordance with section 180. Section 180 states that regulations may be made as to the form and contents of documents to be issued as copies of any executed agreement.

 

I enclose a copy of Regulation 3 of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983. As you can see this regulation does apply to copies of executed agreements as well as unexecuted agreements. In the circumstance the Bank has complied with section 78(1).

 

Default charges are charges payable if the customers do not make the required minimum payment by the payment due date, if they exceed their credit limit, or if a payment to their credit card account is returned unpaid. The amount of these charges, and the circumstances in which they are applied, is set out clearly in HSBC's credit card agreement. We believe that HSBC's charges to the customers are fair and reasonable.

 

The OFT has recently published the findings from its enquiry into default charges on credit cards. HSBC has carefully considered the OFT's publication and does not accept its findings. However, the OFT's investigation has led to a change in market practices and HSBC therefore decided, for commercial reasons and in the interest of customers, to reduce its credit card default charges for the future. These changes do not affect charges that have already been applied.

 

However, as a gesture of goodwill I am prepared to arrange for a goodwill payment of £186.96 to be credited to your credit card account once the remaining balence of £418.04 is paid. The payment is being made on the basis that you agree that you will not make any further claims against HSBC. This gesture of goodwill is without prejudice to our right to impose and recover default charges in the future.

 

If you agree to the above, please sign and return the attached document in our pre paid envelope.

 

I hope that out offer of a goodwill payment will settle this matter to you satisfaction.

 

I am satisfied that the default registration with the credit reference agencies was issued correct, however once the balance of the above account has been fully repaid, I will ensure the credit reference agencies are aware your account is now satisfied. The registration will not be removed.

 

Whilst I hope matters are now resolved to your satisfaction, if this is not the case please let me know, as complaints we cannot resolve can ultimately be referred to the Financial Ombudsman Service. If I do not hear from you within 8 weeks we will consider the matter resolved.

 

Yours sincerely,

 

 

3 General requirements as to form and contact of copy documents

 

(1) Subject to the following provisions of these Regulations, every copy of an executed agreement, security instrument or other document referred to in the Act and delivered or sent to a debtor, hirer or surety under any provision of the Act shall be a true copy thereof.

 

(2) There may be omitted from any such copy-

 

(a) Any information included in an executed agreement, security instrument or other document relating to the debtor, hirer or surety or included for the use of the creditor or owner only which is not required to be included therein by the Act or any Regulations thereunder as to the form and content of the document of which it is a copy;

 

(b) Any signature box, signature or date of signature (other than, in the case of a copy of a cancellable executed agreement delivered to the debtor under section 63(1) of the Act, the date of the signature by the debtor of an agreement to which section 68(b) of the Act applies);

 

© In the case of any of an unexecuted agreement delivered or sent to the debtor or hirer under section 62 of the Act, the name and address of the debtor or hirer; and

 

(d) In the case of any copy of an executed agreement given to the debtor under section 77(1) of the Act for fixed-sum credit, or under section 78(1) for running-account credit, under which a person takes any articles in pawn, any description of the article taken in pawn.

 

Naturally, I am not satisfied. I am fuming.

 

If all this is correct then making a CCA s.78 request is useless. They can merely send you a copy of their unexecuted agreement. I think this is important for everyone here.

[ppauls150]

Well first things first i would reject their offer on several reasons being that they have not met your full ammount, secondly if the account it made up of charges then the default is wrongly unenforceable in law and if this went to court they would lose on both accounts of these reasons.

 

Secondly i havent got a scooby doo on what they sent you so cant comment on that. Need someone to confirm all this who knows their stuff.

[Tobes]

read my most recent post in my hsbc thread, might give you some hope re defaults and charges, though I cannot be responsible for your interpretatiopn because I can no longer discuss the case

[jimfishybob]

This has been brought up before and i'm almost sure it's been superceded.

 

Regardless, were you to press on with your claim to have the default removed they would have to show that the agreement was properly executed and that you agreed to the processing of your data as per section 174 of the CCA. Fortunately, they've tripped themselves up and admitted this is something they cannot do as they've lost the paperwork.

[kateandpete]

This has been brought up before and i'm almost sure it's been superceded.

Ooh, if that's true then they are willfully misleading me. Can you possibly point me to where. I've trawled the OSPI website for statutory instruments, but it's incomplete.

 

It would seem stupendously nonsensical if what they are saying IS true. Where are the safeguards against extortion?

 

Regardless, were you to press on with your claim to have the default removed they would have to show that the agreement was properly executed and that you agreed to the processing of your data as per section 174 of the CCA. Fortunately, they've tripped themselves up and admitted this is something they cannot do as they've lost the paperwork.

Is this really enough though? If what they are saying is true, they don't need a signature and can just send people copies of there T&C's to satisfy a s.78 request.

In my case it took them over 12 + 40 days to do this, so an offence has been committed, but a judge may reinstate it at a hearing as they argue they have "found" it.

 

Yet they have my signature on nothing. And they haven't yet disclosed any proof of this so-called properly registered default.

[jimfishybob]

I can't point you in the right direction as I can't find it either, I have definitely seen it before on here somewhere and there was an answer but I can't bloody remember what it was now.

 

Even if they HAVE complied with your s78, (which I still don't think they have), then atack it on different level. Ask them to prove that they have your permission to process any data.Ask them for a copy of default notice...

 

I need to think more clearly about this....will have a think and update soon.

[zootscoot]

Hi KateandPete,

 

I'm not quite sure what you were expecting to achieve by sending the s.78 request. It seems that your account is in default as you are making arranged payments and have a default registered. This means that the original agreement is no longer in existence. Therefore it is pointless trying to render an agreement unenforceable if it no longer exists.

 

Even if the agreement was in effect, the failure to comply with s.78 would only render the agreement unenforceable from the time at which they are in default ie after the 12 working days. Non compliance with a s.78 request does not render an agreement void ab initio (ie from the beginning - as though it never existed). So the agreement would have been in effect at the time the default was issued so can have no bearing on the fact that a default was registered against your name.

[kateandpete]

Hi KateandPete,

 

I'm not quite sure what you were expecting to achieve by sending the s.78 request. It seems that your account is in default as you are making arranged payments and have a default registered. This means that the original agreement is no longer in existence. Therefore it is pointless trying to render an agreement unenforceable if it no longer exists.

Aah, that makes a lot of sense. Am a bit surprised that HSBC haven't told me that and have gone to so much trouble to argue that the agreement is still in effect though. I would still love to know whether this 1983 regulation has been superceeded.

Even if the agreement was in effect, the failure to comply with s.78 would only render the agreement unenforceable from the time at which they are in default ie after the 12 working days. Non compliance with a s.78 request does not render an agreement void ab initio (ie from the beginning - as though it never existed). So the agreement would have been in effect at the time the default was issued so can have no bearing on the fact that a default was registered against your name.

Yes, but one of the arguments is that they no longer have my permission to process my data in this way as any permission to do expired with the original agreement. There was no 'in perpetuity' clause in any credit agreement with regards to sharing data with third parties.

 

Furthermore, I also requested true copies of the default notice which I never recieved. The first time I was aware of this was when I tried to apply for a new current account and was refused. Then I checked my credit files.

They have not supplied me with this either, so they cannot prove complience with the default registration process laid out in sections 87, 88 and 89 of the CCA. This process is there for a reason - to give me reasonable time to respond and rectify any default situation. They did not give me that opportunity, they just defaulted me and never even told me.

 

This situation is becoming more and more intricate. Thanks for your input zootscoot I really appreciate it. I still believe in the justice of my claim, but am unsure as to what my next move should be.

[zootscoot]

Hi K & P

 

You can continue arguing the no permission point as the contract was obviously terminated. However, I'm not entirely sure of the strength of this argument or how it would stand up in court. It seems the ICO are using the legitimate purpose argument as their justification for processing data. Again I don't think their is much strength in this argument.

 

Did you not get a letter stating that they were calling the debt in if you did not bring the account up to date? If not how did you come to the payment arrangement? The difficulty with this point is they are not obliged to supply a true copy of the default notice under the CCA. However, if you proceed to court they would need to prove that they sent one.

 

You could perhaps also argue on the grounds that continuing to process the data for 6 years is excessive and therefore in breach of sch 1 para 3,5 & 6 of DPA. Particularly if you feel your finances are now in order and the defaults occured as a result of particular circumstances which are unlikely to be repeated.

 

I'm not sure if the Regulations have been superseded. Regulations are so difficult to track down! You could always make an enquiry with Trading Standards as they should have all up to date Regulations created under the CCA.

 

All the best

 

Zoot

[dayglo]

You can continue arguing the no permission point as the contract was obviously terminated. However, I'm not entirely sure of the strength of this argument or how it would stand up in court. It seems the Information Commissioners Office are using the legitimate purpose argument as their justification for processing data. Again I don't think their is much strength in this argument.

 

The only time this argument does carry weight is when the default has been settled.

 

The ICO verdict that schedule 2 section 6 part 1 applies is crying out for challenge. As I've written in my 'life back' thread there is a reasonable argument that

a) they've only considered the first part of 6(1) and not considered 'unwarranted and against the legitimate freedoms interests etc. of the data subject' I think not having adverse data being processed about you from a contract that ended some time ago could be considered against your legitimate interests.

 

It also implies that it is the Secretary of State to determine (it says 'may') whether or not Section 6 applies.

 

Either way, any data processed via the CCA as opposed to the DPA 'MUST' have the permission of the data subject. (this goes a long way to explaining why mobile phone companies are saying that they aren't covered by the CCA)

 

sorry I've not posted links or exact references... just a bit on the busy side at the mo'

[jimfishybob]

Either way, any data processed via the CCA as opposed to the Data Protection Act 'MUST' have the permission of the data subject. (this goes a long way to explaining why mobile phone companies are saying that they aren't covered by the CCA)

 

sorry I've not posted links or exact references... just a bit on the busy side at the mo'

 

 

It's section 174 of the CCA if this helps.

[zootscoot]

The only time this argument does carry weight is when the default has been settled.

 

Do you mean debt? If so I don't see why? The original contract is terminated whether the debt is clear or not. So if the consent arising from contract argument is to succeed, it would succeed irrespective of whether the debt was satisfied. It would simply be a matter of whether the contract containing the term granting permission was still valid and in existence. The debt becomes a separate issue altogether from the contract.

[dayglo]

ok you're probably right.

 

I just think we have more chance of success in removing defaults from settled accounts than from accounts that continue to have money owed.

 

It's easier to argue that the whole relationship is finished once the money is paid back and the agreement has ended.

 

I think we would struggle, and rightly so in my view, to remove legitimate defaults that relate to genuine debt.

 

You could argue that it would be better (not sure for who though!) if the lender went to a court for a judgement - that way the debtor has the chance to explain the circumstances whereas a 'default' is issued without challenge.