Dissecting the Manchester Test Case....

[oilyrag]

Hi Vint,

 

This is an interesting point and discussion. I have spent many hours discussing tort and contract with experienced people in the field, not only legal but also comercially those involved in things like defnece work and the granting of EU technical contracts. I have mentioned this before that it has always been drummed into me that there are several foundation principles (seemingly unwritten as is much of Common law and reliant on Case Law). However following on from your own and diddydicky's discussions on acceptance of termination and defective defaults which to all intents and purposes steps the situation away from the Statute and into Contract, does it not therefore follow that the foundation principles might arguably also apply?

 

1. The Law does not allow anyone to profit financially from unlawful or criminal activity.

 

Could, based on the above and the DN discussion, it not be argued that in fact a return to the base position be the only equitable solution? To have not complied originally with the CCA 1974 is unlawful, hence the very raison d'etre of this forum, hence should it not follow from this step into Contract that for example on a credit card, all purchases and cash withdrawals should be paid for but all interest and charges be returned to the alleged debtor complete with the all beneficial interest that the bank/CC co has enjoyed over the years of use of this money?

 

2. The Law requires that you go to court with "clean hands" when bringing any action whatever sphere of the law you are bringing the action within or lose the case.

 

Should it not therefore be argued that once outside the Statute as per termination and relevant to the above posts that once defective documentation has been identified, then the alleged creditor no longer has "clean hands" ?

 

Difficult arguments I know and starts to get into the realms of subjectivity maybe but in the light of the combined arguments presented can this not also be interwoven as diddydicky has suggested elsewhere?

 

sorry to be a pain

regards

oilyrag.

[vint1954]

All very plausable OR, but we deal with DJ's who in the main can be part time. The arguments could be above them.

 

One possible use of s59 is to say, the application form supplied by you as an agreement, cannot seek to bind me to a regulated agreement, therefore cannot be one. Now where is my agreement please. This is how I am using it, to show that the application cannot be a regulated agreement.

 

If you look at most applications, there is only provission for one signature, so clearly a pre contract agreement, sloting nicely into Application, Offer, Acceptance.

 

The problem with most cases, including Carey, is that there is a narrow focus, on say s78 and not the whole act.

[oilyrag]

Ah, now see a bit more clearly where you are coming from Vint and the better use of s59 (which I must read again more carefully in this light).

 

It has always been my own feeling that far too much emphasis has been placed on s78 and in fact my reading of Carey is that Waksman positively refused to rule on anything else. My own information on the Case Management conferences of early October last was that this would be about s78 claims and really little else and a lot about procedural issues as well rather than "substance" in our terms.

 

regards

oilyrag.

[vint1954]

Hi OR,

 

In my early days here, the weight of thought was that s78 should produce your agreement, an original. Since then, cases, noteably Manchester, have been heard and OFT advice clarified, to a point where s78 is, and always was, intended to provide information only. I am not so sure that that was the real intent initially.

 

The act was written in a time where there were no electronic documents and no great access to photocoppiers, so the agreements had to be coppied by other means, either by hand or by type writer. Obviously a creditor could not provide a signature or date box in those circumstances. I still think that the argument for a true copy, has strayed from the initial intent, but that is where we are in this day and age.

 

Creditors clearly beleive that they now have free licence to issue garbage in response to s78 requests. I don't beleive that that is the case, confirmed by HHJ Waksman. Below is an extract from a letter between OFT and either an MP or the Chancellor. There were 2 letters floating at the time. This is less than 2 years ago, so very relevant. Not the parras in bold:

 

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

 

I still think s78 is worth arguing and the best place to start. It's just a bad tool to take your creditor to court on.

 

The OFT advice, issued after carey, still reflects the sentements of the above response and reafirms that they and not the Creditors or Courts, decide who is fit to hold a licence, so they may win in court, but woe betide them if they fall foul of the OFT.

[vint1954]

This is another point worth remembering, regarding the number of differences between the original and the true copy.

 

As Debtors are often supplied with a front cover of an application form, with many differing versions of prescribed terms, that were supposed to be on the reverse, it is difficult to pin down the true prescribed terms.

 

"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)."

[diddydicky]

as per MBNA for instance!

 

where a small text box is copied onto the front and rear of an A4 paper which is otherwise 80% blank

[vint1954]

as per MBNA for instance!

 

where a small text box is copied onto the front and rear of an A4 paper which is otherwise 80% blank

Indeed DD, there are many examples of their inventive work.

[oilyrag]

Hi Vint,

 

Thanks for all this. I have just completed a "speed" read but I think I need to digest it a bit more. It tends to follow much of my own thinking and have never disputed the starting point issue. However I have always thought that it was uncertain ground to take a creditor to court in order to get a declaration (for that is really what it is) that the alleged agreement is unenforceable based solely on s78.

 

It is one of those things in life that sounds too good to be true and usually is, hence my nervousness at all the cold calling CMCs telling me how easy it was going to be. One CMC actually made statements on the phone during one of these calls which was the final nail in the coffin and it went something like " you need to do it now as we don't know how long the loophole will be open" What loophole, it is the Law and Statute law to boot.

 

I have always been nervous and still am about the reconstituted issue but I think Waksman deliberately put s234 in his summaries to scupper any mischief by unscrupulous creditors despite what he has said earlier somewhere about s100 - 104.

 

regards

oilyrag.

[eagleforms]

Can I please just check a point please to do with a subject access request. I have been asking Robinson Way for the last 9 months to provide me with a copy of a bank loan agreement and a copy of the terms and conditions of an insurance policy that was set up to cover the loan. In 2004 I was diagnosed as having cancer and the insurance company wrote and told me they were making arrangements to clear the loan with my branch in accordance with the cancer clause in the insurance. 6 months later my branch wrote to tell me that they had not received any repayments for the past 5 months and I wrote and said that their insurance company had told me the were repaying the loan. I did not get a reply but 10 days later they debited my account with nearly £5000 without any warning. The insurance compay then wrote to say that they had paid only about 60% of the loan becaused that was the maximum according to theterms and conditions of the insurance. Since I sent a subject access request to Robinson Way they have provided me with nothing but are trying to say that they have asked Lloyds but they have not got copies anymore and because of that I should make arrangements to pay them because I should have kept copies of these when they were first sent to me. I have told them that the account is in serious dispute but they still continue to phone and write. Am I correct in saying that until they supply me with true copies of the documents, the account is unenforceable?

[vint1954]

Hi Vint,

 

Thanks for all this. I have just completed a "speed" read but I think I need to digest it a bit more. It tends to follow much of my own thinking and have never disputed the starting point issue. However I have always thought that it was uncertain ground to take a creditor to court in order to get a declaration (for that is really what it is) that the alleged agreement is unenforceable based solely on s78.

 

Fully agree OR

 

It is one of those things in life that sounds too good to be true and usually is, hence my nervousness at all the cold calling CMCs telling me how easy it was going to be. One CMC actually made statements on the phone during one of these calls which was the final nail in the coffin and it went something like " you need to do it now as we don't know how long the loophole will be open" What loophole, it is the Law and Statute law to boot.

 

They saw money for nothing and realy cocked it up.

 

I have always been nervous and still am about the reconstituted issue but I think Waksman deliberately put s234 in his summaries to scupper any mischief by unscrupulous creditors despite what he has said earlier somewhere about s100 - 104.

 

I think the original intent, OFT advice and Waksman have confirmed the possition. I do not see any real good for the Creditors in Carey, although they will try to turn it round. I can't beleive that they are that daft, that they hope to get away with spinning that judgement.

 

regards

oilyrag.

Vint

[vint1954]

Can I please just check a point please to do with a subject access request. I have been asking Robinson Way for the last 9 months to provide me with a copy of a bank loan agreement and a copy of the terms and conditions of an insurance policy that was set up to cover the loan. In 2004 I was diagnosed as having cancer and the insurance company wrote and told me they were making arrangements to clear the loan with my branch in accordance with the cancer clause in the insurance. 6 months later my branch wrote to tell me that they had not received any repayments for the past 5 months and I wrote and said that their insurance company had told me the were repaying the loan. I did not get a reply but 10 days later they debited my account with nearly £5000 without any warning. The insurance compay then wrote to say that they had paid only about 60% of the loan becaused that was the maximum according to theterms and conditions of the insurance. Since I sent a subject access request to Robinson Way they have provided me with nothing but are trying to say that they have asked Lloyds but they have not got copies anymore and because of that I should make arrangements to pay them because I should have kept copies of these when they were first sent to me. I have told them that the account is in serious dispute but they still continue to phone and write. Am I correct in saying that until they supply me with true copies of the documents, the account is unenforceable?

If robinson way own the debt, or act on behalf of the OC, you should get your agreement from them under s78.

 

The subject access request needs to go to the Original Creditor, Lloyds by the look of things.

 

They need to supply you with true copies of your agreement. For s78, these can be reconstructed. While they are in breach of s78, they cannot enforce the debt.

 

You need to complain to the ICO regarding the SAR and to your local TS and the OFT regarding your agreement, if sent under s78.

[means2anend]

Hi OR,

 

In my early days here, the weight of thought was that s78 should produce your agreement, an original. Since then, cases, noteably Manchester, have been heard and OFT advice clarified, to a point where s78 is, and always was, intended to provide information only. I am not so sure that that was the real intent initially.

 

The act was written in a time where there were no electronic documents and no great access to photocoppiers, so the agreements had to be coppied by other means, either by hand or by type writer. Obviously a creditor could not provide a signature or date box in those circumstances. I still think that the argument for a true copy, has strayed from the initial intent, but that is where we are in this day and age.

 

Creditors clearly beleive that they now have free licence to issue garbage in response to s78 requests. I don't beleive that that is the case, confirmed by HHJ Waksman. Below is an extract from a letter between OFT and either an MP or the Chancellor. There were 2 letters floating at the time. This is less than 2 years ago, so very relevant. Not the parras in bold:

 

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

 

I still think s78 is worth arguing and the best place to start. It's just a bad tool to take your creditor to court on.

 

The OFT advice, issued after carey, still reflects the sentements of the above response and reafirms that they and not the Creditors or Courts, decide who is fit to hold a licence, so they may win in court, but woe betide them if they fall foul of the OFT.

 

 

I too shall make time to read this....thanks for putting this all in one place...and thanks for taking the time Vint1954

 

 

Rgds

 

M2ae:)

[AA99]

Vint & Oilyrag, we've been having a similar debate on this thread

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/221243-link-financial-check-out.html

[eagleforms]

I sent a CPR31.14 request to Robinson way and their solicitors,Horwich Farrelly that they received on 18th March. They have 7 days to reply but have failed to do so. I have told them that I am now applying to the court to have the proceedings set aside. Is there a special form to do this with or will a letter be enough.

[babybear39]

You have to give them the benefit of the doubt and allow the full time to produce, then apply for a set aside should they not do so.

Edited March 26, 2010 by babybear39
oops

[the_shadow]

I sent a CPR31.14 request to Robinson way and their solicitors,Horwich Farrelly that they received on 18th March. They have 7 days to reply but have failed to do so. I have told them that I am now applying to the court to have the proceedings set aside. Is there a special form to do this with or will a letter be enough.

 

You can try a letter to the court and you are asking for a "strikeout of the claim" not a "set aside".

 

They'll probably tell you you need to apply for it, in which case its form N244 from the courts and a fee will be payable.

 

 

S.

[babybear39]

OOPS! I did put strike out but changed it...

[means2anend]

You can try a letter to the court and you are asking for a "strikeout of the claim" not a "set aside".

 

They'll probably tell you you need to apply for it, in which case its form N244 from the courts and a fee will be payable.

 

 

S.

 

 

Find out if you may be exempt from fees or at the most entitled to a remission...ask for Form EX160A ''Court Fees Do You Have To Pay Them''?

 

My friend is on 'relevant benefits' and so I know that if we need to go to court the research is already done and he need not worry...it will depend on her personal circumstances but the form is fully clearl and self explanatory.

 

rgds

 

m2ae

[eagleforms]

Thanks, how long is the full time?

[means2anend]

OOPS! I did put strike out but changed it...

 

A set-a-side is pertinent to a judgement...

[babybear39]

A set-a-side is pertinent to a judgement...

 

Yes, 9 weeks in hospital does strange things to your brain

[charlietheborofan]

Hi,

I'm new to this forum, but have watched with interest for some time.

 

what happens if you apply to ccc for a copy of executed agreement.

they respond original can't be found.

They then send you a reconstitued job, what do they to incude to make it enforceable, as i understand HHJ waksman's ruling it must be true and honest?

Can my learned friends advise?

[silverfox1961]

Hi,

I'm new to this forum, but have watched with interest for some time.

 

what happens if you apply to ccc for a copy of executed agreement.

they respond original can't be found.

They then send you a reconstitued job, what do they to incude to make it enforceable, as i understand HHJ waksman's ruling it must be true and honest?

Can my learned friends advise?

 

 

If the original cannot be found, they would have a hard job enforcing a debt through the courts unless the agreement was taken out after April 2007. The debt doesn't go away, they just can't (but they might try to) go to court.

They can send a reconstituted agreement but it Can't be a made up one. It has to be a copy of what you would have signed (if they could find it) although they are allowed to omit certain details.

 

If they sent a reconstituted one and you had the original agreement and it differed from the original then it would be a big OOPS for the creditor.

[charlietheborofan]

Thanks silverfox.

 

what are they allowed to omit?

 

Seems to me they can just loose the original and send you any old guff?

[diddydicky]

Hi,

I'm new to this forum, but have watched with interest for some time.

 

what happens if you apply to ccc for a copy of executed agreement.

they respond original can't be found.

They then send you a reconstitued job, what do they to incude to make it enforceable, as i understand HHJ waksman's ruling it must be true and honest?

Can my learned friends advise?

 

go onto the OFT site and read what they say about re constituted agreements where the original cannot be found

 

basically they are on very dodgy ground