Dissecting the Manchester Test Case....

[angry cat]

by P1:

"The crux of my argument (under some Act or another) was that an account cannot be defaulted twice.

 

It will be interesting to read your argument. However, I do not agree.

 

p.s. unless you are referring to the DPA

Edited July 2, 2010 by angry cat
post script

[PriorityOne]

P1, I would be very interested in seeing your argument. My understanding has been that as long as they don't terminate (either specifically in writing, or by their actions) on the back of a deficient DN, that they could then issue another.

 

Take the scenario where the debtor enters a default situation, gets a DN (all nice and neat and compliant), rectifies the default within the prescribed timescale. The agreement then continues as if nothing had happened. But then circumstances mean the debtor enters a default situation again, DN, rectification. Surely that could happen a number of times in the lifetime of an agreement?

 

I won't be able to dig it out tonight as I'm off out shortly, but will dig it out tomorrow....

 

The 1st DN was issued while I was making token payments (interest frozen). They took no enforcement action and the default certainly wasn't rectified.... Token payments carried on for a number of years, they then got sh*tty and made threats and at that point issued a 2nd DN.

 

I pulled them up on it (previous post)... they tried to back-track by saying it wasn't a real DN .... merely a Default "letter" and then flogged it by Absolute Assignment.

 

[PriorityOne]

 

p.s. unless you are referring to the DPA

 

It might have been.... but they dropped it like a concrete block nevertheless....

 

I'll dig it out when I've got more time...

[diddydicky]

 

Yes, I think both were caught out.

 

This is the problem with DJs - I would greatly appreciate an unassailable argument that can be launched in a county court that would stop this sort of caper in its tracks.

 

LA

 

 

the argument is that the unsophisticated debtor upon receiving the DN which is n a prescribed form..is entitled to take the creditor at his word

 

therefore if the creditor says that at or after expiry of the time to remedy he WILL terminate or demand payment in full

 

furthermore the word "may" instead of "will" is NOT an indication that he "may" terminate if he "feels like it"

 

rather he is merely expressing the fact to the debtor that the law "allows" him at this time to take this action

 

the word is permissive

 

thus the default notice itself can be taken by the debtor to be a termination/demand for payment if full that is simple pre dated

 

The debtor- who clearly was unable to make the first missed payment- is hardly likely to be able to come up with several missed payments as detailed in the DN (else he would not have been in default anyway)

 

he can therefore succesfully argue (IMO) that he simply "gave up" trying to raise the money to remedy the DN after the date of exiry as he expected that as it was clearly an "official" document under s87(1) of the CCA - the creditor has done what he said he would do

 

but if the debtor does not advance the argument- the court cannot accept it

 

i would personally, if the creditor has not made a formal termination/demand for payment in full in a reasonable amount of time after the DN- accept the DN as UR anyway

 

IMO

[diddydicky]

I addition to what M2AE has said, IS the scanned original in fact a signed scanned original? Does it have all the prescribed terms on it and properly formatted such that you can verify it was properly executed?

 

THEY are taking you to court, not the other way round so ensure they are put to utmost proof by asking as many relevant questions as possible. The witness should be ready to come to court for a thorough cross-examination.

 

Also, have you served the CCA, CPR and SARN letters? What's the situation with Default Notices and the Termination of the account?

 

Best practice is to start your own thread and post a link here so we can help you through it.

 

 

do not forget that there is no need to wait for the trial - such a witness could be called to give evidence as to their witness statement ahead of the main trial and if discredited could well cause the claimant to discontinue whilst at the same time limiting costs

[applecart]

Hi All

 

Just seen this thread - and thought I'd add my two penneth worth for good measure. (ok maybe a bit more than two penneth: )

 

CCA 1974 s.87 is not ambiguous - it clearly states that the lender must serve a valid DN in the prescribed form BEFORE he can take action under s.87. (incidentally, the prescribed form is found in a variety of regulations that have been updated again and again - so a lender needs to have his wits about him to make sure he has definately complied with the latest applicable regulations)

 

If the lender has served a defective DN and becomes aware of this - prior to terminating - he should serve another and as many as he likes until they get it right........ HOWEVER..... any consumer who finds that the lender has not acted to correct the error BEFORE termination...... then, my thoughts are that .... the consumer has every right within the Law to interpret the lenders TN as his election to end the agreement; interpreted as: neither the debtor or the lender is obliged to perform the agreement (i.e: consumer not obliged to make any further payments or lender to demand any further payments after that point). The consumer need only write to the lender accepting the termination or simply stop paying. (best to put it in writing though)

 

Without a doubt there is process and protocol involved when a TN follows a defective DN.....

 

In such an instant - The lenders only recourse of action is to apply to court for an order requesting the Judge to re-instate the agreement; I have not seen anywhere in the CCA 1974; that gives a lender recourse to an order for re-instatment after such time as they have followed a defective DN with a TN...... I interpret that it is only in the following circumstances that a lender can apply for enforcement orders:

 

"CCA 1974 - 127 (1) In the case of an application for an enforcement order under-

 

(a) s.65(1) (Improperly executed agreements), or

(b) s 105 (7)(a) or (b) (improperly executed security instruments), or

© s 111 (2) (failure to serve copy of notice on surety;) or

(d) s 124(1) or (2) (taking of negotiable instrument in contravention of section 123)"

 

The question begs .... if the lender is not allowed to terminate the agreement after having served a defective DN... but goes ahead and terminates..... (in breach of s.87)... then does this mean the lender has not truly terminated the agreement?? Can the lender argue that because the DN was faulty; that the TN does not count????? so that they can serve another DN after the TN???

 

The answer is........whether he has terminated or not is not the issue - the issue will be - what was/is the lenders 'intention' at the time he served the TN - as one cagger pointed out - so long as the termination notice makes the lenders intention clear - then the average consumer will/can interpret this to mean that the lender no longer wishes to perform the agreement - (ie.. you can no longer take advantage of the weekly payments or monthly payments) - effectively the lender breaks the terms of the agreement - and by seving the TN he is effectively insisting that you pay the outstanding balance in a lump sum...... The TN is for a purpose - it 'terminates an agreement' - It is only where an agreement is in force; that the CCA assists the lender and affords him recourse to Court - clearly, this would not be the case.

 

Lets say; the consumer has been trying to negotiate solutions to repay the debt at the time the defective DN is/has been served... and the lender still goes ahead and serves a TN....... Then it is Game, Set and Match to the consumer ....... WHY? .... because you will be able to show that whilst you were in default; you did not repudiate (i.e you would not have given the lender any indication of an election not to perform your part of the contract on the contrary - you are showing your willingness to meet the terms to the best of your ability/circumstance - so long as you are offering to pay something - you are performing the agreement albeit not to 'agreed' terms; but signs of willingness to perform can be shown)....

 

If this happens then as a consumer you have every right to claim damages against the lender for what will be his unlawful repudiation; a consequence of which gives an automatic right to recission - recission being that - the injured party (consumer in this instance) can potentially claim against the lender for unjust enrichment.

 

so, my take on all this is ..... Yes... a lender can serve as many DN's as he elects to..... BUT.... he cannot twist process and protocol to continue to do so after he has served a TN.

 

Just my interpretation - there may be others....

 

Apple : )

[PriorityOne]

Ok.... God knows what I'm doing up so early on a SATURDAY.... .... lol

 

Following the 2nd DN (several years after the 1st, which incl. a credit file entry)... a formal complaint was made under The Data Protection Act (as Angry Cat thought in an earlier post)... as a Notice to correct data under The Data Protection Act 1998.

 

The basis of my argument was that:

 

"Default is defined by the credit reference agencies as the termination of an account for cause. It is not possible to default an account twice, since by definition the account has already been closed. Attempting to register a default more than X years after already registering one is against the guidelines issued by the Information Commissioner and regarded as an unfair practice".

 

It was sent by rec. delivery (like everything else).... they were told to amend the data.... and it was also pointed out that they remained in breach of a CCA request....

 

Their letter back stated that they had not in fact entered a further default, they were aware that one was issued some time earlier and basically... because they intended to take further legal action, a business decision was reached to send a Default "letter" before proceedings began "as we are legally obliged to do"..... followed by a load of customer service blah.

 

8 days after that letter was sent, I was notified (by Cabot) that the account had been sold by Absolute Assignment (in the absence of any enforceable docs. anyway)..... suggesting that the decision to flog it had already been made following my complaint.... which took them nearly 2 months to address.

 

Happy days...

[paulwlton]

It is only where an agreement is in force; that the CCA assists the lender and affords him recourse to Court - clearly, this would not be the case.

 

 

Apple : )

 

Deleted

[paulwlton]

Ok.... God knows what I'm doing up so early on a SATURDAY.... .... lol

 

Following the 2nd DN (several years after the 1st, which incl. a credit file entry)... a formal complaint was made under The Data Protection Act (as Angry Cat thought in an earlier post)... as a Notice to correct data under The Data Protection Act 1998.

 

The basis of my argument was that:

 

"Default is defined by the credit reference agencies as the termination of an account for cause. It is not possible to default an account twice, since by definition the account has already been closed. Attempting to register a default more than X years after already registering one is against the guidelines issued by the Information Commissioner and regarded as an unfair practice".

 

It was sent by rec. delivery (like everything else).... they were told to amend the data.... and it was also pointed out that they remained in breach of a CCA request....

 

Their letter back stated that they had not in fact entered a further default, they were aware that one was issued some time earlier and basically... because they intended to take further legal action, a business decision was reached to send a Default "letter" before proceedings began "as we are legally obliged to do"..... followed by a load of customer service blah.

 

8 days after that letter was sent, I was notified (by Cabot) that the account had been sold by Absolute Assignment (in the absence of any enforceable docs. anyway)..... suggesting that the decision to flog it had already been made following my complaint.... which took them nearly 2 months to address.

 

Happy days...

 

Remember a lender may serve you with a default notice but need not register it with the CRA.

[PriorityOne]

Remember a lender may serve you with a default notice but need not register it with the CRA.

 

I'm pretty sure they were intending to...

 

The 1st one was registered.... the 2nd one was letting them know that they couldn't do it again and that an account couldn't be defaulted twice. They would have needed a DN to go to court with.... but couldn't find the 1st one....

 

Shame...

 

A lot of people on here are saying it's ok to default the same account many times, but I disagree. If HFC could have got away with defaulting the same account twice with different amounts each time and going to court with it, then I'm pretty sure they would have done (regardless of a 2nd CF entry or not).

 

They knew I owned property... so why didn't they?

 

Lack of a CCA wasn't stopping them at the time.... they'd provided "something" and were riding on the back of that for a long while.

 

Suggestions on a postcard please...

[means2anend]

Going back to my point 3) above, it seems Waksman missed a great opportunity in this area by not clearly putting lenders in a position where they had to say, within a certain timeframe or not, whether or not they had an IEA with the debtor. To have done so would certainly be in keeping with the spirit of the CCA.

 

Yes he clarified that s78 was for info and not proof purposes only but he did not go further and clarify exactly what a debtor may do to obtain that proof purpose within a given timeframe.

 

The current situation of a fulfilled s78 request (met by a recon) against a backdrop of a possible IEA which neither the creditor nor debtor can produce is really an unacceptable dilemma. Lender's should have a time limit for when they must fulfill the proof purpose by, if requested to. If they cannot, they forego their rights to collect. For me, this is where he missed a big CCA opportunity, by attacking a debtor's rights to request that an agreement has been properly executed and that the lender is obligated to confirm or deny either way, with corresponding implications. If the creditors had complied fully with CCA, as they are obliged to in order to have the valid lending licences, why is this not a valid debtor request? Yet Waksman attacked it more as a sort of 'fishing expedition'.

 

The limbo situation where they can continue to impugn the debtor's CRA file and threaten recovery for a debt which they very well may know is IEA in law should not be allowed to continue.

 

Yes ultimately it will 'wash out' after 6 six years but is that really enough?

 

...enough of this, to the Brazil game now...

 

Again you are on the ball BTM!

 

However your concern that the opportunity here was missed by HHJ Waksman is true bUT can still be shored up by using the CONSUMER PROTECTION FROM UNFAIR TRADING REGULATIONS 2008...as to nisleading and unfair business practices...this can also be used in conjunction with the guidelines that we are all familiar with on this and other posts by SUSAN EDWARDS Head of Enforcement Investigations Dept OFT...

 

That is why many of the experienced Caggers on here have said many times that the tools are at our fingertips to use and it is all about proper understanding of one's own position and applying the 'right argument' to one's OWN particular facts...that is when victories come and it is all the more harder for the lender...this should all be done in correspondence BEFORE any threat of litigation as when done correctly with a reasoned credible argument...the less likely the lender is going to make empty threats...when empty threats are made this again falls foul of OFT guidelines...see the impositions made upon 1sCredit amongs others.

 

So where there are gaps tools can be found when looking in the right place and with a little common sense you CAN frighten off these buggers!

 

I speak from my own experience....

 

m2ae:)

Edited July 3, 2010 by means2anend
change 'practices' to 'trading'

[vint1954]

I'm pretty sure they were intending to...

 

The 1st one was registered.... the 2nd one was letting them know that they couldn't do it again and that an account couldn't be defaulted twice. They would have needed a DN to go to court with.... but couldn't find the 1st one....

 

Shame...

 

A lot of people on here are saying it's ok to default the same account many times, but I disagree. If HFC could have got away with defaulting the same account twice with different amounts each time and going to court with it, then I'm pretty sure they would have done (regardless of a 2nd CF entry or not).

 

They knew I owned property... so why didn't they?

 

Lack of a CCA wasn't stopping them at the time.... they'd provided "something" and were riding on the back of that for a long while.

 

Suggestions on a postcard please...

I think that is spot on, especially in a situation where the original default is not rectified.

 

s87 is there specifically to give the creditor a route to demand that you put your account in order or he will take steps to recover all of his money. If you don't put your account in order, then he should procceed to collect the full ballance as he has told you he will.

 

It is very rare that a creditor issues a DN and then does nothing. This is usually followed by a demand for the full ballance. At that point, the game is over for them.

[PriorityOne]

I think that is spot on, especially in a situation where the original default is not rectified.

 

s87 is there specifically to give the creditor a route to demand that you put your account in order or he will take steps to recover all of his money. If you don't put your account in order, then he should procceed to collect the full ballance as he has told you he will.

 

It is very rare that a creditor issues a DN and then does nothing. This is usually followed by a demand for the full ballance. At that point, the game is over for them.

 

Agreed Vint... and in the pre-CAG days, experience taught me that maintaining token payments was a good way of keeping creditors at bay... as a potential Judge would look at goodwill payments against the disposable income and wonder what the point was of going to court in the first place.

 

Owning property should have made me a good target but for them to succeed in going for a Property Charge, I would have needed to default on a CCJ... and as token payments were already in place, that seemed unlikely. I'm assuming their thoughts went along those lines anyway...

 

It's all a big mind game at times.... and sometimes, we're in a much stronger position than we think.

 

[Undercover-Elsa]

Morning P1 and Vint

All good stuff.

I'm coming across a few threads now where the banks are claiming that despite short DN times, because they haven't taken further steps until some time later, weeks or months, they have therefore allowed ample time for remedy. We need to get our heads together to formulate a definitive answer for this response.

An example here:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/262985-co-op-dn-termination-2.html

 

 

Elsa x

[PriorityOne]

Hi Elsa...

 

I'm assumng that if consumers go down the unlawful recission of contract (DN) route, then they won't also be trying to go down the lack of CCA route.... as otherwise, they'd be accepting the termination of a contract in one breath and then denying the exisitence of an alleged contract in another.

 

I've yet to go down the unlawful recission route..... but imagine that due to the removal of CCA sec 127(3) in CCA 2006 that this would be the way forward for people wanting to raise disputes, etc....

[vint1954]

Morning P1 and Vint

All good stuff.

I'm coming across a few threads now where the banks are claiming that despite short DN times, because they haven't taken further steps until some time later, weeks or months, they have therefore allowed ample time for remedy. We need to get our heads together to formulate a definitive answer for this response.

An example here:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/262985-co-op-dn-termination-2.html

 

 

Elsa x

It would depend on the actions that they take, but you can be expected to take them at their word. In the DN it states that they may or will take the following action. As a layman, you could expect them to do that.

[vint1954]

Hi Elsa...

 

I'm assumng that if consumers go down the unlawful recission of contract (DN) route, then they won't also be trying to go down the lack of CCA route.... as otherwise, they'd be accepting the termination of a contract in one breath and then denying the exisitence of an alleged contract in another.

 

I've yet to go down the unlawful recission route..... but imagine that due to the removal of CCA sec 127(3) in CCA 2006 that this would be the way forward for people wanting to raise disputes, etc....

Hi Priority One,

 

I assume the line would be DN defence first followed by, Notr withstanding the above........

 

Vint

[PriorityOne]

Hi Priority One,

 

I assume the line would be DN defence first followed by, Notr withstanding the above........

 

Vint

 

Yes, I think so... As consumers no longer have the protection of CCA sec 127(3), the DN route now has to come first in a Defence... with any CCA argument as an appendage, so to speak.

[seriously fed up]

For accounts signed after April 2007 we dont have the protection of 127 (3) P1, before you induce mass coronories and suicides!

[PriorityOne]

For accounts signed after April 2007 we dont have the protection of 127 (3) P1, before you induce mass coronories and suicides!

 

That's what I said... .... "no longer" have the protection...

[vint1954]

For accounts signed after April 2007 we dont have the protection of 127 (3) P1, before you induce mass coronories and suicides!

yes, agreements no longer have protection, but I think that was the point that Priority One was making.

[Undercover-Elsa]

The case in question is purely a DN issue I think. Basically they issued DN, which was OK for times, but then issued a termination notice just 3 days after DN sent. OP sent UR letter and they've responded that as they didn't take any further action ie passing it to a Debt Collector until 2 months after that they've given ample time to remedy.

What utter lies they spout!!!

[vint1954]

yes, agreements no longer have protection, but I think that was the point that Priority One was making.

 

 

 

That's what I said... .... "no longer" have the protection...

Always late to the party!

[vint1954]

The case in question is purely a DN issue I think. Basically they issued DN, which was OK for times, but then issued a termination notice just 3 days after DN sent. OP sent UR letter and they've responded that as they didn't take any further action ie passing it to a Debt Collector until 2 months after that they've given ample time to remedy.

What utter lies they spout!!!

Yes, in that case Elsa, they realy did put the cart before the horse, in terminating before the stat time to rectify.

[PriorityOne]

Always late to the party!

 

No worries... lol.... thought I was having a senior episode there for a minute! It's been known to happen...