Dissecting the Manchester Test Case....

[bustthematrix]

Clear as day, methinks!

 

However, most DCA's/Bank's are choosing to ignore this, preferring rather to send out meaningless waffling correspondence in attempts to mislead the; General Consumer...

This is part of the problem. The OFT/TS needs to come down hard on a few of the perennial offenders, both Lenders and DCAs and restore a sense of order and decency to some of these exchanges.

 

When was the last time any lender had their lending license pulled? If that happened a few times, certain people would sit up and take notice.

[babybear39]

The OFT 'pull' a licence? The way they act they'd have more success pullin' a dog in a nightclub

[bustthematrix]

...pullin' a dog in a nightclub

Not that hard to do, knowing some of these night clubs!

[dp77]

The creditor or owner should make it clear in communications to the debtor that the debt is in fact unenforceable. Failure to do so, where the creditor or owner is aware of unenforceability, would in the OFT’s view unfairly mislead the debtor by omission.

.

 

You might think there is more chance of a Howard Cohen winning Britain's Got Talent than of a creditor admitting a debt is unenforecable but in fact this did happen to me once.

 

I was on the phone to Barclaycard, my policy was always to be polite and friendly, even if the opposition were not. Anyway, this operator I was on the phone to had clearly had a very bad day indeed, I suspect he had just been told he was losing his job.

 

I sympathised then asked him, very politely, why I hadn't yet been sent a copy of my agreement, which I had asked for in writing. He went away to look up a file, came back after a few minutes and said "I can tell you why, because they've destroyed your agreement and have no longer have a record of it". I nearly fell off my chair.

 

Absolutely true story.

[angry cat]

Quote by dp77:

"I can tell you why, because they've destroyed your agreement and have no longer have a record of it".

 

No doubt "they" have also destroyed or, misplaced the inception Terms & Conditions also...Oh Dear.

 

Remember, an agreement can be reconstituted.

But, not without ALL the necessary information upon which to base same!

Edited April 22, 2010 by angry cat

[UnmoderatetheNet]

You might think there is more chance of a Howard Cohen winning Britain's Got Talent than of a creditor admitting a debt is unenforecable but in fact this did happen to me once.

 

I was on the phone to Barclaycard, my policy was always to be polite and friendly, even if the opposition were not. Anyway, this operator I was on the phone to had clearly had a very bad day indeed, I suspect he had just been told he was losing his job.

 

I sympathised then asked him, very politely, why I hadn't yet been sent a copy of my agreement, which I had asked for in writing. He went away to look up a file, came back after a few minutes and said "I can tell you why, because they've destroyed your agreement and have no longer have a record of it". I nearly fell off my chair.

 

Absolutely true story.

 

You'd be shocked how true this statement is, especially with pre 2004 agreements. Why do think so much effort is being put into changing the law with regards to true copy, its a collective effort by banks as I know for a fact what was HBOS are in the same boat as they shared the same policy on storage costs as apposed to scanned copies.

 

The loophole will get changed this year I expect most banks are in the same position they cannot afford to write off this amount of debt, (DCA's that bought debts have an interest as well) its just not going to happen all we can wish for is a few DCA's go under before that happens. A little bird tells me Cattles are within months of doing so

[seriously fed up]

All true, but they still face two problems

 

1. a recon is ok for s78, but not for s61
   
2. they still have to produce something that is s61 compliant. OK if its a recon, I am sure they have the idea by now, which is why point 1 is so important.
   

Would they ever be allowed to produce a recon for s61? Well there is a clear motivation for banks to be allowed to do this, but if they did the scope for fraud would be ginormous (as we can all attest), and - so that I dont get moderated - probity and banks arent two words often found together without a linking word such as "lacking".

In any event, if a government did try to push a coach and horses of that size through the fundamental laws of evidence there would be a Human Rights case about that, which would end up in Europe. How long would that take to sort out?

[bustthematrix]

The loophole will get changed this year I expect most banks are in the same position they cannot afford to write off this amount of debt, (DCA's that bought debts have an interest as well) its just not going to happen all we can wish for is a few DCA's go under before that happens. A little bird tells me Cattles are within months of doing so

UMTN, it's not a loophole. It's a fundamental legal right.

 

In this day of loan book sales, assignment of debts, lenders buying each other, securitisation etc there's absolutely no excuse. Besides with the ease of cut and paste, document forgery and ID theft, the risk to which the borrower is put is VERY significant where a creditor cannot properly verify and validate a debt.

 

Without that signed original, there's too much room for error, manipulation and misrepresentation. The often mentioned 'cost of storage' argument which lender's raise is pure nonsense. That cost is a fundamental and basic cost to lending businesses in particular and should be be factored into the product interest rates and other terms and conditions. There's absolutely no excuse if they go 'losing' originals. It's all their fault. And besides we have it on good authority that 'losing' such agreements is done on purpose for their own reasons (not just storage costs!).

 

We the people must never agree to allow this fundamental right to be denied to us. A photocopy or computer printout of what I am alleged to have signed is NOT necessarily the same as what I did sign. It may be, but who's to say it has not been tampered with in some way? This is the dilemma a creditor faces when they cannot or refuse to provide originals!

 

This principle is being powerfully upheld in the US and many are exercising it to bring the much criminalised lending industry to account.

Edited April 23, 2010 by bustthematrix

[brooooooooooce]

UMTN, it's not a loophole. It's a fundamental legal right.

 

In this day of loan book sales, assignment of debts, lenders buying each other, securitisation etc there's absolutely no excuse. Besides with the ease of cut and paste, document forgery and ID theft, the risk to which the borrower is put is VERY significant where a creditor cannot properly verify and validate a debt.

 

Without that signed original, there's too much room for error, manipulation and misrepresentation. The often mentioned 'cost of storage' argument which lender's raise is pure nonsense. That cost is a fundamental and basic cost to lending businesses in particular and should be be factored into the product interest rates and other terms and conditions. There's absolutely no excuse if they go 'losing' originals. It's all their fault. And besides we have it on good authority that 'losing' such agreements is done on purpose for their own reasons (not just storage costs!).

 

We the people must never agree to allow this fundamental right to be denied to us. A photocopy or computer printout of what I am alleged to have signed is NOT necessarily the same as what I did sign. It may be, but who's to say it has not been tampered with in some way? This is the dilemma a creditor faces when they cannot or refuse to provide originals!

 

This principle is being powerfully upheld in the US and many are excercising it to bring the much criminalised lending industry to account.

 

Good post

[angry cat]

:

 

... And besides we have it on good authority that 'losing' such agreements is done on purpose for their own reasons (not just storage costs!)."

 

Irresponsible lending amongst other issues comes to mind!

[means2anend]

Hi BTM...I am interested in this principle ''being powerfully upheld in the US''.

 

As you know when the US sneezes we all soon catch the cold.i and most if not all of us would like a little more info on this or if u can point to some authority or materials I should luv 2 read up on it.

 

AC-could you tell me on which good authority you got the '' losing'' such agreements is done on purpose for their own reasons (not for storage coasts!).'' quote from

 

m2ae:cool:

[UnmoderatetheNet]

:

 

... And besides we have it on good authority that 'losing' such agreements is done on purpose for their own reasons (not just storage costs!)."

 

I do toatally agree with all arguments against, hell thats why i'm here and just a small point, the storage costs i'm refering to are really relating to the dumb ****e in Barclays Mr. D, who decided to destroy archieved agreements rather than pay for storage costs just because they had them scanned. You know who you are but I doubt he reads this because he's no doubt an alcoholic the amount he drank, anyway i'm off the point.

 

The point is is there is billions of debt out there all subject to true document, do you really think banks will allow that to continue? You only have to look at bank charges, now the OFT are involved i'm only seeing a repeat performance.

 

As for huge law changes and human rights well there are far more subtle ways of turning the tide.

 

I hate to say this but I really think Manchester was the crack in the dam, I feel that before the year is out changes will be in place that will not assist the consumer and see them drowned.

[seriously fed up]

"As for huge law changes and human rights well there are far more subtle ways of turning the tide."

yes there are and the banks are at it already - for instance spinning the notion that because they can issue a reconstruction (true copy) and that gets them over the enforceable issue in s78, is allowing them to spin the idea that this makes the account enforceable in law when in fact it does no such thing. Whether its enforceable in law doesnt depend on s78 unless the agreement is forever lost. What matters is s61 (and then to s65 and then to s127). If they can find a more subtle way of getting over the problem that if they lack the original they cant fulfil the requirements of s61 and so court is ruled out as a means of enforcement, I dont know what it is. They can of course argue that they can show lending took place etc etc. But that's not the requirement in law - it is to fulfil s61 and I suppose its possible that the banks could push for this to be amended/ neutered in some way - but that would be retrospective and generally retrospective legislation is a big no/no, as you are not just changing the rules of the game, but changing them after the game has been played.

The banks - for I would assume it was them - got 127(3) repealed for all agreements post 2007, and tbh going any further than that (eg retrospectively repealing it for all agreements since 1977 for instance) would pose enormous legal problems, which would certainly be capable of appeal all the way to the European Court of Human Rights, which as the guardian to the Convention, would almost certainly kick it into touch. At worst for a government this could mean the government being ordered by the court to compensate anyone who had suffered as a result of such a legal change - ie put the debt on to the government books rather than the banks. I rather think the government (of whichever hue) have gone as far on that as they are likely to go.

[diddydicky]

Quote by dp77:

"I can tell you why, because they've destroyed your agreement and have no longer have a record of it".

 

No doubt "they" have also destroyed or, misplaced the inception Terms & Conditions also...Oh Dear.

 

Remember, an agreement can be reconstituted.

But, not without ALL the necessary information upon which to base same!

 

i agree- they can get the information from wherever they like- but id like to see how they would overcome the not insignificant omission of your SIGNATURE on any reconstruction- without which it would be as much use as a ham sandwich at a jewish wedding

[bustthematrix]

Hi BTM...I am interested in this principle ''being powerfully upheld in the US''.

 

m2ae:cool:

 

Have a look at Web of Debt - LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS. This is one of a number of cases where this principle has been successfully applied to prevent repos for example. It's that powerful, fundamentally speaking.

 

There's even a movement around it called "produce the note". Here are more references I think you'll REALLY enjoy reading/viewing.

 

Produce The Note - "How-To" | The Consumer Warning Network

Produce The Note | Foreclosure Industry

 

Prove Existence of the Note

 

Lender must prove existence of the note Foreclosure Combatant

Do be careful as you read through though as you'll probably encounter shark like types offering to get rid of your mortgage for a hefty up front fee or something like that!

 

I hope this is all still in topic???

[satnewbie]

Again, here is the full response from the OFT. A similar response was issued by the Director of OFT, in reply to a letter from the Chancellor.

 

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

@vint 1954

 

Re your post 2412 can you please give me the link where to download it from?

 

TIA

[means2anend]

Have a look at Web of Debt - LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS. This is one of a number of cases where this principle has been successfully applied to prevent repos for example. It's that powerful, fundamentally speaking.

 

There's even a movement around it called "produce the note". Here are more references I think you'll REALLY enjoy reading/viewing.

 

Produce The Note - "How-To" | The Consumer Warning Network

Produce The Note | Foreclosure Industry

 

Prove Existence of the Note

 

Lender must prove existence of the note Foreclosure Combatant

Do be careful as you read through though as you'll probably encounter shark like types offering to get rid of your mortgage for a hefty up front fee or something like that!

 

I hope this is all still in topic???

 

many thanks!

 

m2ae

[bustthematrix]

many thanks!

m2ae

You're welcome, should be enjoyable reading going into the weekend!!

[charley2212]

sorry to be off topic

but why does the statute barred exist when things like this below happen , so why cant we also claim back further in time The MoD, the arms deal and a 30-year-old bill for £400m - Home News, UK - The Independent

[seriously fed up]

its international law between states so I suppose different rules apply. Also, it appears that the case has been in court for some time (30 years?) and I believe that if a creditor gets takes the case to court before statute barred kicks in then even if the case takes the debt beyond 6 years (or 5 in Scotland) it doesnt matter. The "clock stops" when the legal claim is made

[Rhia]

It might be worthwhile having a dig into this case as it says in the report it was heard at the High Court so must be under UK jurisdiction and ultimately EU law.

Also if a debt has been secured on land you have 12 years before it is SB.

 

When anyone reads the foreclosure stuff posted by Bus the Matrix do bear in mind it is US law.

[vint1954]

i agree- they can get the information from wherever they like- but id like to see how they would overcome the not insignificant omission of your SIGNATURE on any reconstruction- without which it would be as much use as a ham sandwich at a jewish wedding

Oi-ve

[vint1954]

@vint 1954

 

Re your post 2412 can you please give me the link where to download it from?

 

TIA

Not realy, it's on my hard drive. You can copy and paste the text from the post, or google it.

[angry cat]

I have said it once but will say again...

 

The "Creditor" cannot reconstruct a credit agreement (as per the 1983 Regs) without ALL Terms upon which to base same;

inception T&C's together with the Terms as varied!

 

In any event if the original document was minus the prescribed terms and one has proof, the "Creditor" would have egg on their face if such a deceitful course is followed.

[vint1954]

I have said it once but will say again...

 

The "Creditor" cannot reconstruct a credit agreement (as per the 1983 Regs) without ALL Terms upon which to base same;

inception T&C's together with the Terms as varied!

 

In any event if the original document was minus the prescribed terms and one has proof, the "Creditor" would have egg on their face if such a deceitful course is followed.

Quite so. The letter from the OFt also states that they need the original to copy from and if they do not have it ( shredded or lost) it would be difficult to prove it was a true copy.

 

In this letter at least, their view was that a true copy was just that. A copy taken from the original.