Dissecting the Manchester Test Case....

[antigone1974]

What they have to provide under S78 has been fudged.....but that is not the point......what they have to provide to enforce IS governed by rules, and rightly so. to address a previous point re contracts someone once said " A verbal contract isnt worth the paper it isnt written on".

 

ANY contract would be hard to enforce if the agreement had "disapeared", it leaves the path open to argument.

 

would you say the the "agreement" below was a valid contract

 

 

because thats all I got from the creditor.......

 

Anyway you are obviously looking for fun or arguments so I wont bother replying anymore

 

Dave

 

 

Contracts are argued over in court all the time with absent paper work. It is also possible to have written paper work but then argue that it was subject to further oral agreement/variation. This is what lawyers do.

 

 

Clearly what you have posted, in that form, doesn't comply with wither s.78 or s.65 (and falls foul of 127).

 

However, I would suggest that there is a bottom part of a text box at the top of the page, which suggests this is not the complete agreement.

[diddydicky]

the banks cant PROVE that they complied without producing an original copy of the loan agreement

 

they can only SUGGEST what might have been in/on it!!

[diddydicky]

Contracts are argued over in court all the time with absent paper work. It is also possible to have written paper work but then argue that it was subject to further oral agreement/variation. This is what lawyers do.

 

 

Clearly what you have posted, in that form, doesn't comply with wither s.78 or s.65 (and falls foul of 127).

 

However, I would suggest that there is a bottom part of a text box at the top of the page, which suggests this is not the complete agreement.

 

in the signature box it says THIS is a credit agreement, sign it etc etc

 

it does not say " this is only part of a credit agreement" etc

 

you seem very knowledgeable as to what cant be seen on it!!

[antigone1974]

Anyway guys. I notice that my comments do not appear to be welcome, so I wont bother anymore. It is a shame because I was simply putting forward ideas. I would suggest that people need to think about these things before they turn up in court and it is best to do it now. Thought this was the idea of the site!

 

To my mind, nobody had put forward any convincing response yet.

 

Thought the purpose of this site was also to share knowledge and ideas. I think that this would perhaps include considering and dealing with ideas and suggestions that might be unpalletable.

 

The suggestion that I have ulterior motivesand am a evil DCAer here to sabotage the site is a little silly and suggests that (some of you at least) do not deal with criticism well!

 

I wish everyone the best.

 

å

[diddydicky]

you have posted 14 times on a site that is renowned for attracting trolls- almost every post seems to have an overtone of " dont bother trying to defend you are wasting your time"

 

that is why suspicions are aroused

 

its your choice

 

stick around and allay those fears or do what you suggested-

[Its WAR]

But the bank suggests they have sent a true reconsituted copy, but that copy is proved to have been impossible to have been the original, as it wasnt drafted at the time, because it contained recent amendments that did not belong in the earlier agreement.

 

Wouldnt that be better than arguing over an agreement that is being hidden. The bank suggests what might be in it and therefore it is a properly formed agreemnet, but the suggestion is clearly shown to be impossible. Isnt that a better scenario for us than if the bank keeps everything hidden?

[the_shadow]

Anyway guys. I notice that my comments do not appear to be welcome, so I wont bother anymore. It is a shame because I was simply putting forward ideas. I would suggest that people need to think about these things before they turn up in court and it is best to do it now. Thought this was the idea of the site!

 

To my mind, nobody had put forward any convincing response yet.

 

Thought the purpose of this site was also to share knowledge and ideas. I think that this would perhaps include considering and dealing with ideas and suggestions that might be unpalletable.

 

The suggestion that I have ulterior motivesand am a evil DCAer here to sabotage the site is a little silly and suggests that (some of you at least) do not deal with criticism well!

 

I wish everyone the best.

 

å

 

I can see your viewpoint and what you are saying.. its just you are coming across possibly in the wrong way.. you seem to want to knock the walls down without suggesting how to stack the bricks so to speak.

 

I think with recent decisions, this ruling and the judge lottery, basically the judges will look to rubber stamp anything it can as enforceable, thus it is up to the defendant in most cases to refute the claimants position and if they cant see the original agreement then its a case of attempting to prove the bank has a tendency to get agreements wrong historically and hence by association the missing agreement in the defendants case.

 

I do think there is real merit in having a store of old credit card agreements for people to compare against... even if not the complete item but rather a s78 response, all it needs is the image and a description of when it was taken out etc etc. At least then people have something to compare with.and possibly find fault with agreements that "appear" with so called terms and conditions that plainly couldnt have been there on the real agreement... wont change the mind of a judge determined but may sway that 1% needed to get the 51%

 

Oh and I have 3 or 4 to add to the library ;-)

 

S.

[gezwee]

 

stick around and allay those fears or do what you suggested-

 

Think they've already gone for option 2

 

Tbh DD I prefer to see the argument on here (however unwelcome it may appear), I'd rather have a slanging match here and prepare myself for whats to come than have it in a judges chambers first time around.

 

Cheers

 

Gez

[diddydicky]

WAR re post 604

 

you will get more help if you start a new thread with this

 

 

 

well so far you have no PROOF of what the original clause said

 

all you have is what i suggested which i found on this site some time ago

 

you will note that one cagger suggested that the former might only apply to certain other agreements

 

so you need to search out the authority for that argument and if you cant find it you would need to concentrate your efforts eleswhere

try llooking on threads regarding posts about the same lender and ask on them if anyone has the back of an original agreement prior to 31 may 2005!

 

did you ask the site team!

[seriously fed up]

I think we need to be a wee bit more forensic here my Greek friend. Yes, the banks can show that lending took place - the submission of accounts can demonstrate that. That is not the issue (unless they stick a few noughts on the end as in Paul Walton's scandalous case!). The issue is well summed up by Francis Bennion (who drew the 74 Act up - but I expect you knew that) when he said "Dr Lawson may be interested to know that I included the provision in question (section 127(3)) entirely on my own initiative. It seemed right to me that if the creditor company couldn’t be bothered to ensure that all the prescribed particulars were accurately included in the credit agreement it deserved to find it unenforceable, and that the court should not have power to relieve it from this penalty. Nobody queried this, and it went through Parliament without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed."

I am equally sure you are familiar with s127(3) which says that if s61 and 65 have not been complied with (and lets remember that s61 says that to be properly executed there must be a sig) so if there is no signature the court may not make an enforcement order. So the issue isnt "was/is there a debt?" but can the lender show there was an agreement that can be enforced in law and that (following s61) requires a signature. If the lender cant do this then the account isnt enforceable. End of.

What the banks cannot do therefore, is present evidence of lending and then come forward with "an agreement, which isnt the agreement signed by the debtor your Honour, but one which our infallible procedures would have required him to sign for lending to take place". Any court which accepted that on the balance of probabilities or otherwise, is quite simply misdirecting itself in law. The CCA is quite clear - and I note you dont challenge this - that s61 requires a sig, not a reconstruction.

Lets remember too the Carey etc case was about s78 and s78 is mainly concerned with giving the debtor information about the agreement they have entered into. There has been a view for some time that this was mainly intended to be informative, to remind the debtor of what was agreed by the provision of a "true copy" - a copy so correct that no one could be unclear of what was agreed. That is not the same game as enforcement - not the same game as enforcement at all.

Sorry (well not really )

[diddydicky]

I can see your viewpoint and what you are saying.. its just you are coming across possibly in the wrong way.. you seem to want to knock the walls down without suggesting how to stack the bricks so to speak.

 

I think with recent decisions, this ruling and the judge lottery, basically the judges will look to rubber stamp anything it can as enforceable, thus it is up to the defendant in most cases to refute the claimants position and if they cant see the original agreement then its a case of attempting to prove the bank has a tendency to get agreements wrong historically and hence by association the missing agreement in the defendants case.

 

I do think there is real merit in having a store of old credit card agreements for people to compare against... even if not the complete item but rather a s78 response, all it needs is the image and a description of when it was taken out etc etc. At least then people have something to compare with.and possibly find fault with agreements that "appear" with so called terms and conditions that plainly couldnt have been there on the real agreement... wont change the mind of a judge determined but may sway that 1% needed to get the 51%

 

Oh and I have 3 or 4 to add to the library ;-)

 

S.

 

although i have none to contribute, i entirely agree

 

even modern agreements - if we can catch a lender out fibbing by baiting them with a s77/79 for an agreement we already have- then that would be powerful enough i feel to kill off reconstituted agreements in court for that particular lender

 

i could see this being quite a task if someone wants to take it on i personally would have no objection to a small fee towards them.the site for accessing it

[diddydicky]

I think we need to be a wee bit more forensic here my Greek friend. Yes, the banks can show that lending took place - the submission of accounts can demonstrate that. That is not the issue (unless they stick a few noughts on the end as in Paul Walton's scandalous case!). The issue is well summed up by Francis Bennion (who drew the 74 Act up - but I expect you knew that) when he said "Dr Lawson may be interested to know that I included the provision in question (section 127(3)) entirely on my own initiative. It seemed right to me that if the creditor company couldn’t be bothered to ensure that all the prescribed particulars were accurately included in the credit agreement it deserved to find it unenforceable, and that the court should not have power to relieve it from this penalty. Nobody queried this, and it went through Parliament without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed."

I am equally sure you are familiar with s127(3) which says that if s61 and 65 have not been complied with (and lets remember that s61 says that to be properly executed there must be a sig) so if there is no signature the court may not make an enforcement order. So the issue isnt "was/is there a debt?" but can the lender show there was an agreement that can be enforced in law and that (following s61) requires a signature. If the lender cant do this then the account isnt enforceable. End of.

What the banks cannot do therefore, is present evidence of lending and then come forward with "an agreement, which isnt the agreement signed by the debtor your Honour, but one which our infallible procedures would have required him to sign for lending to take place". Any court which accepted that on the balance of probabilities or otherwise, is quite simply misdirecting itself in law. The CCA is quite clear - and I note you dont challenge this - that s61 requires a sig, not a reconstruction.

Lets remember too the Carey etc case was about s78 and s78 is mainly concerned with giving the debtor information about the agreement they have entered into. There has been a view for some time that this was mainly intended to be informative, to remind the debtor of what was agreed by the provision of a "true copy" - a copy so correct that no one could be unclear of what was agreed. That is not the same game as enforcement - not the same game as enforcement at all.

Sorry (well not really )

 

to be fair to the point made s127 (3) actually does NOT say that there "must be a signature"

 

rather unfortuneately it says that the debtor must have signed (past tense) etc etc

 

thus the lenders are using the argument that if they can show, on the balance of probabilites, that the defendant would have signed it- from other evidence - that they can get their horse over the line

 

i think we really now have to have a lot of development on the site of arguments as to heresay statements and evidence and to start calling every tom dick and harry that is involved in the process starting from the people who put the stuff on the microfiche and what they did with the originals right through to those that got the information off again. and develop a library of questions that need to be asked of them including how old they are, were they working for the bank at the time , which department, what were the company policies in this respect and how were they complied with

 

if we are going to be lumbered with 6 grands worth of costs we might as well get our monies worth and make life hard for them

 

I also think there is a huge distinction between agreements and application forms and the former is going to be harder to prove re prescribed terms than the latter

 

i distinctly remember (could have veen x20) stating a case where a 19 year old clerk gave a statement as the procedure that was followed for microfiching who would have been 13 at the time of the agreement

 

we also have the ludicrious situation of solicitors making statements as to what would have been on the back of an agreement issued by the client (and who may well not even have heard of the client at the time the agreement was made) stand up Mr Bouchier!!

 

 

 

we must not allow it to become accepted practice for third parties to give these statements of fact

Edited January 13, 2010 by diddydicky

[seriously fed up]

Being devil's advocate here guys, I can see two problems with this approach

 

1. the case would have to be heard in a court where there would be a binding precedent. OK if it was heard in a lower court, then it could be referred to but its authority would be limited, would it not?
   
2. lets say we catch a bank out - which I suspect wouldnt be the hardest thing in the world - might it not say (perhaps a few months down the road) something along the lines of "ah yes, we made a big mistake with that one, but we have made all these reforms to our internal procedures and this couldnt happen again with our new processes", and (especially with judicial prejudices) we could be back to square one. Also, how far does showing one of them is crooked take us? Dont we have to show they are all crooks.
   

Also - and this is the defect in a s78 request (and I have used them myself) - if they supply a true copy, it doesnt have to be a copy, just so accurate that its not misleading. I dont remember the name of the case, but there was one around "true copy" where the lender missed out that 55% was the APR (I know !) but the court accepted that no one would think it was other than annual. S78 is slippery. Much better to catch them out when they try to enforce using dodgy documents (which is what our new Greek friend is suggesting - very wrongly imo - they can do already)

Discuss

[Laura Cooke]

Where a body (OC) or DCA has been found to have provided reconstructed agreements that bear little relation to the original, I would suggest that they be reported to SOCA ie Serious Organised Crime Agency.

Who knows what the response will be but this is a different type of organisation to FSA and information Commission.

 

Totally agree with this post by creditman09 cases of serious fraud are taking place the creditors should not be allowed to get away with it and need exposing my MBNA "Application" has the prescribed terms on the left hand side of the application however this as been cut and pasted there as at bottom left is a different address to the bottom of the right hand side how can we win any case how are we supposed to prove what we are saying about the fraud creditors are committing:confused:

[gezwee]

 

i distinctly remember (could have veen x20) stating a case where a 19 year old clerk gave a statement as the procedure that was followed for microfiching who would have been 13 at the time of the agreement

 

 

I've used this argument before in 2007 vs Barclays, requested permission to question (as is my/your right) - Barclays subsequently requested adjournment and discontuance.

 

Not so sure this stands up anymore as they put the onus on the encumbent sols to issue statement based on banks hearsay evidence rather than leaving their own staff to make a mess of things.

[diddydicky]

ah yes, we made a big mistake with that one, but we have made all these reforms to our internal procedures and this couldnt happen again with our new processes"

 

if it please the court, the claimant previously contended that their systems were such that they could not possibly afford the credit to the borrower unless he had signed an agreement and unless that agreement had the prescribed terms yet now admits to making "big mistakes"

 

the creditor now seeks to convince the court that it has now managed to do within a matter of months what it has failed to do since 1974-ensure that its systems are foolproof

 

Notwithstanding questions as to exactly what the creditor has done to improve his systems of information retreival, the creditor may or may not, (only time will tell) have improved his systems now to deal with these issues, however the issues in this case relate to information stored XXXX years ago and i submit that the creditor cannot retrospectively alter its records to comply

Edited January 13, 2010 by diddydicky

[seriously fed up]

to be fair to the point made s127 (3) actually does NOT say that there "must be a signature"

 

rather unfortuneately it says that the debtor must have signed (past tense) etc etc

 

thus the lenders are using the argument that if they can show, on the balance of probabilites, that the defendant would have signed it- from other evidence - that they can get their horse over the line

 

i think we really now have to have a lot of development on the site of arguments as to heresay statements and evidence and to start calling every tom dick and harry that is involved in the process starting from the people who put the stuff on the microfiche and what they did with the originals right through to those that got the information off again. and develop a library of questions that need to be asked of them including how old they are, were they working for the bank at the time , which department, what were the company policies in this respect and how were they complied with

 

if we are going to be lumbered with 6 grands worth of costs we might as well get our monies worth and make life hard for them

 

I also think there is a huge distinction between agreements and application forms and the former is going to be harder to prove re prescribed terms than the latter

 

i distinctly remember (could have veen x20) stating a case where a 19 year old clerk gave a statement as the procedure that was followed for microfiching who would have been 13 at the time of the agreement

 

we also have the ludicrious situation of solicitors making statements as to what would have been on the back of an agreement issued by the client (and who may well not even have heard of the client at the time the agreement was made) stand up Mr Bouchier!!

 

 

 

we must not allow it to become accepted practice for third parties to give these statements of fact

 

I completely agree with your conclusion and much else in that post but what s127 (3) actually says - direct quote - is

 

"The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner)."

 

I have highlighted what seems to me to be the important point that they must show compliance with s60(1) which says

 

"60.—(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—

(a) the rights and duties conferred or imposed on him by the agreement,

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

© the protection and remedies available to him under this Act, and

(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement."

 

This means that what they produce must be compliant with the 1983 regs which, as I have pointed out already, are very prescriptive of the formatting of these agreements and how often do we come across one that is compliant with this formatting? Not often imo. Also these regs are full of references to the need for a sig - section 6 focuses on how this should be done for instance.

 

So, you are right, s127(3) does not require a sig - but no sig is one of the routes that takes you to s127(3) and non-enforcement.

[seriously fed up]

ah yes, we made a big mistake with that one, but we have made all these reforms to our internal procedures and this couldnt happen again with our new processes"

 

if it please the court, the claimant previously contended that their systems were such that they could not possibly afford the credit to the borrower unless he had signed an agreement and unless that agreement had the prescribed terms yet now admits to making "big mistakes"

 

the creditor now seeks to convince the court that it has now managed to do within a matter of months what it has failed to do since 1974-ensure that its systems are foolproof

 

 

that's an old judge for you!

[diddydicky]

I completely agree with your conclusion and much else in that post but what s127 (3) actually says - direct quote - is

 

"The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner)."

 

I have highlighted what seems to me to be the important point that they must show compliance with s60(1) which says

 

"60.—(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—

(a) the rights and duties conferred or imposed on him by the agreement,

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

© the protection and remedies available to him under this Act, and

(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement."

 

This means that what they produce must be compliant with the 1983 regs which, as I have pointed out already, are very prescriptive of the formatting of these agreements and how often do we come across one that is compliant with this formatting? Not often imo. Also these regs are full of references to the need for a sig - section 6 focuses on how this should be done for instance.

 

So, you are right, s127(3) does not require a sig - but no sig is one of the routes that takes you to s127(3) and non-enforcement.

#

i agree- it is the "past tense" "was signed" that causes us the problem

 

if only it had said IS signed

[gezwee]

#

i agree- it is the "past tense" "was signed" that causes us the problem

 

if only it had said IS signed

 

 

How does a 'was' become an 'un' - past tense persists in the future (or it should unless we can rewrite history)

[gezwee]

How does a 'was' become an 'un' - past tense persists in the future (or it should unless we can rewrite history)

 

Should have said the reverse scenario is also factual

 

Then again I take the banks position - Never admit to signing anything at any time unless its beneficial to me

[seriously fed up]

yes, i can see the argument - they must have signed something like this. But this is playing games with language - which I suppose is one of the lawyer skills. So why shouldnt we?

If we are concerned with s127(3) and its a case of enforcement then the onus is on the pursuer to show that the agreement they are putting forward was signed. Two ways they can do this - produce a signed copy or assert that "the borrower must have signed something this document". I know we can find - too easily - decisions by the infamous Judge Lottery, but lets suppose we are in with a judge who actually knows the law (or is prepared to listen, even to a LIP). Isnt the evidence of one of the litigants saying in effect "they must have signed this or we wouldnt have given the money" remarkably thin? I understand the point about balance of probability, but what kind of evidence is that? To quote Mandy Rice-Davies "well he would, wouldnt he?" One way of doing this, as you pointed out, is to challenge what they put forward. Its practically inconceivable that what a debtor might/ might not have signed wont be in the possession of someone on this site - so they cant just put up anything at all. And this leads to the next point .....More often than not, others who signed up at the same time will have THEIR agreement and more often than not these will be defective in ways other than whether they were signed or not. For one thing I dont think we have made enough use so far of the 1983 regs. This would allow a defence against a recon to go beyond the issue of sig to say "even if this was signed, its inconsistent with the 1983 regs in the following ways, thus non-compliant with s60(1) thus s127(3) applies".

 

Part of the success of CAG has been that it set the agenda - it put lenders to various tests which they have had difficulty in dealing with. Lenders have started - through chosing their cases (eg Carey etc) - to begin to put limits on these tests. Perhaps we need to move on and pose other, certainly more novel and (following Baggio) more fatal tests based on other aspects of the CCA.

Edited January 13, 2010 by seriously fed up

[vint1954]

- if they supply a true copy, it doesnt have to be a copy, just so accurate that its not misleading.

 

Not quite so. Remember the Susan Edwards letter.

 

HE 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 ‘...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.

 

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

[seriously fed up]

What I was thinking about Vint was actually Burchell v Thomson, and the point I was trying to make was simply that it doesnt have to be a blow by blow copy - there can be variations. But I think the watchword is (or words are) "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)."

 

I think the point is that the true copy can vary from the original - but by how much? I think that is the point. But we are in danger here of trying to determine how many angels can dance on the head of a pin. The part that really jumped out at me about this letter was this

"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.."

 

I think this is very strong evidence to rebut the claims made by lenders, but specifically by Antigone (not to say that they are a lender :?) on this site. Ok, it does allow for lenders presenting evidence that the debtor did sign an agreement that "looks like this". but the final section ("to do so ...") suggests that the OFT consider this would be difficult for them.

 

Besides, as I suggested above, there are other issues besides whether or not the document was signed or not.

[vint1954]

What I was thinking about Vint was actually Burchell v Thomson, and the point I was trying to make was simply that it doesnt have to be a blow by blow copy - there can be variations. But I think the watchword is (or words are) "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)."

 

I think the point is that the true copy can vary from the original - but by how much? I think that is the point. But we are in danger here of trying to determine how many angels can dance on the head of a pin. The part that really jumped out at me about this letter was this

"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.."

 

I think this is very strong evidence to rebut the claims made by lenders, but specifically by Antigone (not to say that they are a lender :?) on this site. Ok, it does allow for lenders presenting evidence that the debtor did sign an agreement that "looks like this". but the final section ("to do so ...") suggests that the OFT consider this would be difficult for them.

 

Besides, as I suggested above, there are other issues besides whether or not the document was signed or not.

Understood SFU