Co-op Dn & Termination

[Peterbard]

Hi

I was involved in a similar case where a car loan was defaulted incorrectly.

The creditor terminated the agreement and repossessed the vehicle.

We got the debtor to challenge the termination as the default notice had been defective. This was upheld. We were then advised to sue for damages and conversion, the creditor returned the vehicle and settled out of court.

The point is if the default notice is incorrect then the default termination cannot take place.

 

The creditor would have to issue another one before he could take action.

 

It must be remembered also that on an open ended account the creditor may terminate any time they want.

Peter

[Undercover-Elsa]

Co-op have their hands over their ears going "La LA La La Laaa"

(No pun on CitizenB's headphones intended)

 

Edited September 13, 2010 by Undercover-Elsa

[molly13]

lol Elsa, like that

[Undercover-Elsa]

Hi

I was involved in a similar case where a car loan was defaulted incorrectly.

The creditor terminated the agreement and repossessed the vehicle.

We got the debtor to challenge the termination as the default notice had been defective. This was upheld. We were then advised to sue for damages and conversion, the creditor returned the vehicle and settled out of court.

The point is if the default notice is incorrect then the default termination cannot take place.

 

The creditor would have to issue another one before he could take action.

 

It must be remembered also that on an open ended account the creditor may terminate any time they want.

Peter

 

Interesting point, but on that occasion it obviously benefited the debtor (I hate that word, lets say borrower) to NOT accept the unlawful termination and to insist that the creditor reinstate the agreement as the Default Notice was invalid.

As the injured party upon receiving a faulty DN, the borrower has the right to decide whether to insist on affirming the agreement or accepting the repudiatory breach. Whichever he decides, he has the right to sue for damages for said breach, even if the agreement is reinstated on his insistance.

 

I appreciate that either party in a running agreement can end the agreement at any time if there is a clause stating this in the contract. The Brandon case highlighted this, but I would have thought that if the creditor CHOOSES to issue a DN instead, then he is legally bound by his choice of actions. It seems in Brandon that Amex used this to have the DN made irrelevant, but I see no indication that Mr Brandon insisted that the court try the case on the documentation in the POC, rather than the hypothetical clause 10 brought in later.

Just my opinion

[citizenB]

Co-op have their hands over their ears going "La LA La La Laaa"

(No pun on CitizenB's headphones intended)

 

 

[Peterbard]

Interesting point, but on that occasion it obviously benefited the debtor (I hate that word, lets say borrower) to NOT accept the unlawful termination and to insist that the creditor reinstate the agreement as the Default Notice was invalid.

As the injured party upon receiving a faulty DN, the borrower has the right to decide whether to insist on affirming the agreement or accepting the repudiatory breach. Whichever he decides, he has the right to sue for damages for said breach, even if the agreement is reinstated on his insistance.

 

I appreciate that either party in a running agreement can end the agreement at any time if there is a clause stating this in the contract. The Brandon case highlighted this, but I would have thought that if the creditor CHOOSES to issue a DN instead, then he is legally bound by his choice of actions. It seems in Brandon that Amex used this to have the DN made irrelevant, but I see no indication that Mr Brandon insisted that the court try the case on the documentation in the POC, rather than the hypothetical clause 10 brought in later.

Just my opinion

 

Hi

I think we must go back to the legislation to get a clearer picture of this.

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

Notice the section says “before the creditor can” terminate or whatever.

 

Not that the creditor must supply a correct default notice.

Therefore unless he does he cannot. So all subsequent actions must be invalidated including the termination.

 

Peter

[Undercover-Elsa]

Yep, I'm pretty familiar with that Section

Let's see it again, I like it so much:

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

 

Notice that this time I've changed the emphasis.

 

So we agree that the only become entitled to terminate / demand full balance/ issue legal proceedings AFTER serving a notice in accordance with section 88?

 

Where we apparently disagree is on what happens next.

Banks DO terminate, they DO demand full balances and they DO issue court proceedings, without issuing a notice in accordance with Section 88. A done deal, in writing, which the borrower can hold them to.

The CCA makes no mention of the result, remedy or penalty for doing this after failure to take this step.

Therefore at this point the situation becomes subject to common/contract law.

As mentioned above, the borrower is now, suddenly, the injured party and can tell the Creditor that the DN is wrong and insist they get it right and reinstate the agreement. Or he can tell them they got it wrong and that they have decided to accept their repudiatory breach.

 

That's how I understand it.

 

As this is Molly's thread I think perhaps it would more appropriate to have this discussion in the Invalid DN thread..where it has been discussed many times before.

 

Elsa x

[Peterbard]

Hi

I think it is appropriate to discus this here as believe ,as the main defence I see recommended is I believe based on a faulty premise

.

You are correct in` asserting that this has been discussed many times, I have been involved in many of them to date I have only seen confirmation of my view on this.

I believe you are correct in asserting that the creditor may not request accelerated payment if no default notice is sent. however the effect of not sending a correctly executed notice cannot constitute unlawful repudiation of a open ended agreement, because as we have agreed the agreement can be, terminated at any time.

The effect on the default termination of it being preceded by an incorrect notice is simply to render that termination invalid. Nothing to stop the creditor rectifying there mistake and after the statutory period continuing to enforce..

The possibility that contract law may be applied here is an interesting one, but I am not sure how it would work given the provision of 170.of the act..

Anyway that is my opinion not popular I know.

I will leave you to it .

Peter

[Undercover-Elsa]

We'll have to agree to disagree then

 

PS..I understand Sections 161 to 173 to apertain to the rights of the OFT to take action against Creditors, not creditors rights against consumers...

 

I'll shut up now, honest

[molly13]

Hi,

 

 

I am in need of some advice please:

 

 

Years ago I had a bank account and a loan.

Defaulted on the Fixed Sum loan agreement which was then put on to the current account.... taking the balance to £12.000 + overdrawn.. i.e the original o/d was at £800+... loan amount £12.000.

Been making agreed token payments since.

 

 

The account has recently been sold to Cabot.

 

 

Sent CCA to Cabot who replied that as it was an o/d they do NOT have to send any agreement.

Is that correct please?

In my opinion, and I may of course be wrong, the loan would still be covered by the CCA.. whether it was transferred or not.

 

 

Any help and advice appreciated, as always.

 

 

Regards

Molly

[renegadeimp]

If a 12k debt has been sold to cabot ( who are well known to deal in bad debts), you need to be asking why.

[molly13]

ty renegadeimp....but I don't understand?... the whole account was closed shortly after the loan was added.. and passed for collection to Equidebt.. which of course no longer exist. Any idea where I go from here? Please. I have got the SAR.. and PPI has been repaid.

 

 

I'm just puzzled by Cabot's insistence that it is ALL an o/d?

 

 

Regards

 

 

Molly

[fkofilee]

Thats probably because they believe it to be a Current account all round....

Anyhow back to the point... If they have no CCA then it smells

[molly13]

Hi fkofilee,

Thanks... I agree... I have managed to see Cabot off with a BIG stick (CAG) before in regards to another company...lol

 

 

What I need to know now though is whether they ARE obliged to supply the CCA or allowed to just try to fob me off with it's an o/d nonsense?

 

 

I was going to send them In Dispute letter but want to be sure of my facts first.

 

 

Molly

[fkofilee]

Hi Molly

 

I would say to check the terms... If it was a loan for sure, then it needs to be dealt with in another way and not referred to as an OVERDRAFT facility when it's not one.

[molly13]

Oh definitely a Fixed Sum Loan Agreement Regulated by The Consumer Credit Act 1974....with the same bank as the current account was held....when the loan defaulted the bank just shoved it onto the bank account and closed the lot!

Molly

[cfs_too]

Hello,

It wasn't first direct by any chance?

FD were well known to have done this several years ago.

 

I had the same problem, as did many others. In my case it's been quiet for a few years.

I'm just waiting for it to be sold on and the merry-go-round to commence.

ME_too

[molly13]

Hi ME_too

 

 

Thanks for your input.... no not FD but that 'ethical' bank the Co-operative.

 

 

Still leaves me with the question of whether Cabot is obliged to comply with my CCA request or not?

 

 

Anyone please?

 

 

Regards

 

 

Molly

[renegadeimp]

They can provide one for loans, but i dont think overdrafts are covered by the CCA.

 

So you could ask them for the CCA for the original loan ( which is your point i think), but when it was merged with your overdraft ( was that with your permission?), im not sure what paperwork to ask for. perhaps SAR the bank and force them to give you EVERYTHING, ignore crapbot and throw the debt into dispute until you get teh facts. Crapbot will make a lot of noise as they are EXTREMELY greedy and just see the numbers on the spreadsheet. They couldnt care less about the validity of the debt.

[molly13]

Thanks renegadeimp...

 

 

That is really what I'm after... though it appears as if they regard the whole amount as an o/d, and no didn't give permission.

 

 

So I suppose I should inform Cabot that the majority of the debt is for a regulated loan and CCA again?

 

 

Thanks.

 

 

Molly

[cfs_too]

Hi,

I totally agree with renegadeimp, in contacting original creditor for full SAR.

 

As you reference previous experience with crapbot then you already know how they work

 

I'd write again and state the facts, not an o/d, and that you expect them to comply with S77/78 request etc.

 

I'm having a bit of a bad day (health wise) so memory is a bit poor but I think I remember reading on here, from another thread that the OC may have removed your rights under the consumer credit act by placing the loan into the od, which is not covered under the act. I can't remember where I saw it, but I'm sure it was HSBC related and something to do with 'managed loans' (a description like this but as I said memory not clear today). This might help if you could find the other thread, I'll have a look but might not be back on here today.

 

From experience, like yourself if the stick you hit crapbot with is big enough,they do go running.

 

Me_too

[AndyOrch]

Hi Molly responding to your PM.

 

 

Pretty much as already stated...even though they have been assigned the debts they cant amalgamate them together as one (Litigation wise) they can for debt collection purposes.

 

 

Did you state the Personal Loan Account number ?

 

 

Regards

 

 

Andy

[molly13]

Thank you Andy,

 

 

It was the bank that added the loan to the o/d and at the same time closed both accounts.

 

 

The account number stated on so-called NOA is the Bank Account Number, which I quoted with Cabot ref number.

 

 

Regards

 

 

Molly

[AndyOrch]

Okay have you ever requested a DSAR on both accounts? This may be worthwhile for the future if not... in case Caboot try to litigate.

You will then have proof of the amalgamation and separate account numbers.

 

 

I wouldn't worry too much unless they try to litigate... have the debts been assigned totally or they just collecting?

[molly13]

Ok.. I have a SAR from 2009..was regarding a CC that was already paid off when they sold it Lowell..got sorted quickly!

However they..the bank.. also sent a lot of other stuff relating to the bank account and loan..guess it won't hurt to send for a full updated SAR? Will do that this afternoon..

 

 

As for the assignment, the short answer is I don't know for sure..

 

The NOA from the bank, in the same envelope as the welcome letter from Cabot, gives notice of sale, however it also states:

Agent Ref: Cabots no.

Client ref: Bank account number

 

 

So it really is a bit confusing.

 

 

Thanks again

 

 

Molly