Defective default for bank overdraft- what are the options please?

[robinredbreast]

Thanks for the input on this guys ...

 

On the "are they ... aren't they" regulated saga ... I can only go on what I've been told by other Caggers, the Coutts Case, Experian, and the Bank themselves ...

 

1. Caggers have told me which parts of the act regualted ODs - and that whilst no "cca" as we know them for credit cards are available, the bank have a liability to issued with a letter explaining the basis of the OD, interest, terms for revoking etc ...

 

2 .Coutts case confirms OD are regulated under The Act (part V excemption allowed)

 

3. Experian, when asked why an unregulated banking account may be registered clarified with this response

 

“Overdrafts are covered by sections of the Consumer Credit Act, since they are a form of credit. This is why your credit report only shows information about overdraft balances and not the amount you are in credit.”

 

4. The bank themselves, whilst distancing themselves from actual regulation of the OD, contradict themselves by saying in the same letter .. that the issue of any DN in relation to the OD, is done so under S87 of The Act, which to quote them" must strictly adhere to the terms of the CCA74"

 

So up to now we have 3 - 0 (lets leave the bank out for now) for regulation under the CCA74.

 

In response to this I told them ...

 

"Your response is to suggest there is no documented agreement in place, and to claim that an overdraft agreement is not subject to the regulations or remedies under the Consumer Credit Act 1974 (The Act), however this is contradicted in your confirmation that any issue of a default notice is actually done so under The Consumer Credit Act 1974, to which you confirm "any default notice issued must strictly adhere to the terms of the CCA74 (thereby denoting regulation under The Act)."

 

Further to which

 

An overdraft is a debtor creditor agreement as defined under section 8 and 13 of the Consumer supported by case law in Coutts & Co v Sebestyen [2005] EWCA Civ 473 (28 April 2005). Accordingly, S78(1) of the CCA74, sets out quite clearly what is required in order for you to comply with my request, and quote “shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it”.

 

And I've asked them for ..

 

1. a copy of the agreement, including all variations (if appropriate), of which they cite my contractual breach of in the S87 Default Notice issued

2..a copy of the document signed by myself giving them permission to process my data

3..a copy of all charges applied to the account, statements, and any other documents upon which they are relying upon in this matter

 

I’ve not told them the DN ...

1. does not give sufficient time for remedy (asked for the whole DN & cut up of cards & chq book – which is instant termination)

 

2... There is not a figure quoted for remedy just “the whole overdraft balance”

2b..... In my opinion it should actually have only have been for the “arrears” of £3500 anyway, a sum requested in January in their initial “review of account letterl” in which they confirmed I would be left with an authorised OD facility of £3500

2c ....My statements post DN, show an authorised OD facility of £3500 (albeit I was way over as they had already withdrawn £3500 of the orig facility.

2d ..... In july I received a further letter saying that after “a review of my account”, they were recalling my authorised od facility of £3500 ... thereby as at end of July I had no authorised OD facility ... (if that all makes sense .. !!)

2e .....So the remainder authorised OD was only wholly withdrawn end of July ... not March when the DN was issued –confirming that when the DN was issued the amount classed as arrears was “£3500”, so the the fig for remedy in the DN should also have been £3500. (convoluted I know .. but if it saves my bacon ... I’ll argue this to the cows come home)

2f ..... DN also incorrectly formatted (which is a bit loose if that was the only thing wrong with it .. but in this case because of the ambigious nature in the way the DN was constructed, and their subsequent communication contradicting what’s in the DN ... I believe its confusing enough and to be a good defence.

 

By their own admission, their own terms of notice which they must abide by under the own OD rules is 3 weeks notice to the Debtor .. which means to me 21 days calendar days (exc b hols) ....

So ...

Letter dated (Sat) 2 January 2010 (demanding repayment of £3,500 of £7k OD authorised OD facility) & 21 days = Friday 22 January 2010 as final date for remedy before DN realms

If we use the same principal as the terms of service for DN them we must allow for posting and exclude any bhols (which in this case don’t apply)

So 2 January 2010 is a Saturday ... earliest posting date is Monday 4 January 2010 – can’t be sure when I recd this ... but lets say it was 1st class and I recd it – Wednesday 6 January 2010.

6 January 2010 & 21 days (i.e 3 weeks notice) = 27 January 2010 ....

So, I work out (and would argue) they are not only in breach of the regulatory terms of the S87 DN, but also breached their OWN agreement terms

They have made a real pigs ear ...and confusion apparently reigns from their end ... of which I intend to make good use ..... !!!!!

 

Sorry its long ..... the post that this ... !!!!

All comments – agree or disagree are welcome as always .....

 

Over and out .....

Robin xx

[robinredbreast]

Hi guys ...

 

Update .... they have now registered a default with CRAs 31 Jul ... as I obviously didn't repay the remaining authorised half of the OD they wanted payment of by 25 Jul.

 

They haven't replied to my challenge to their "oh no it isn't regualted" letter .... heard nothing from the DCA either .. up to now ...

 

Update as and when peeps....

[robinredbreast]

We have a response from them ...

 

I had requested a copy of the original bank acc application and agreement, explained to them that the OD facility is regualted by the CCA74, and accordingly I req a true copy of the agreement relating to the odraft, the agreement of which they claim in breach in the DN already issued by them.

 

They have responded ... " As overdrafts are exempt from the formal content requirements of te CCA and are governed by the terms and conditions of the account, we have returned your £1.00 payment for a copy of the agreement. Unfortunately we are unable to provide you with a copy of your original agreement"

 

"On opening your account you would have been provided with a copy of the current terms and conditions for that time and you wil have been notified throughtout the life of the account of any changes".

 

So what they are saying is the OD element isn;t covered by the CCA at all, and is only governed by the T&Cs relating to the bank account, and that there are no agreements, or info relating to the od element to be provided by them, other than what is generally available via T&Cs.

[robinredbreast]

Roxburghe today reared their head again .. with a chasing letter and a "we are considering what action to take" threat ..

 

My thoughts are to bang on with the "oh yes it is regulated" to the bank ... and just ignore rox.

 

Comments guys ... ??

[Guest]

Thats ok, thinking logically, for fairness, there should be a way to prevent a bank giving someone an overdraft, and then withdrawing it and wanting full payment instantly and hammering heavy charges for having an 'unauthorised' overdraft.

 

Maybe the Terms detail how it is handled, but what, as in this case, if the bank doesn't stick to its own terms? Effectively, they can say "dont worry, we'll give you 2 months to repay or reduce the overdraft", wait for you to go up to the limit, withdraw it and want full repayment within 24 hours, and then start adding massive charges, bouncing direct debits and everything else and causing you a whole heap of trouble. Surely there is some protection to stop that behaviour, whether deliberate or not?

 

As ODs are covered by the CCA except for the need for a written agreement in advance of the overdraft being granted, maybe a DN is required, because if I remember correctly, the exemption is only for the agreement - a letter of conditions is required instead, which implies the DN requirement still applies. maybe?

 

imo,

a dn would be required re an o/d if there was a 'breach' of the o/d agreement and the the cr then seeks termination etc.

the clause allowing them to end an o/d and demand full payment in short notice is unfair imo. it's similar to a cr cd clause re ending (where there's no breach) allowing them to end the agreement with notice and demand the full amount. the amount 'outstanding' cld run into thousands! and it wld be unfair and an 'unrealistic demand' for payment?

[robinredbreast]

Yes ... I;ve already had s 87(1) DN issued by the bank - which fails in its compliance to the regulations regarding time for remedy, no numeric figure given for the amount to satisfy the DN, the amount to satisfy itself is disputed as incorrect, and also other layout issues. Already discussed earlier in this thread.

 

Had a CRA confirm partially regulated by CCA.

 

Had a default registered with CRAs for the total OD, only in July when the bank confirmed they were withdrawning the remaining part of the authorised od facility - which is why the amount requested in the DN is disputed.

 

They have made a right mess of this ...

[Guest]

robin

out of interest, see some of the 'examples' under the CCA 74, eg 6, 18, 23.

[diddydicky]

dear roxburghe

 

thank you for your letter of xxxxxxxx

 

when you have finally decided what action to take- kindly let me knoiw and then i can advise you what action i intend to take in response

 

Y F

[robinredbreast]

Classic DD !!!

[Guest]

a DN is issued ONLY in situations where the borrow has defaulted.therefore IMO would not need a default notice to recall the loan

 

Therefore if the bank loaned say £10,000 and the borrow missed a payment of £500 then £9500 is not in default and can be recalled by the bank!! ( i think)

imo. in your eg. if the bank recalled the 9.5 following a missed payment (ie breach/default), then it wld be by reason of the missed payment? ie the 'breach'. therefore, a DN wld be required re termination, sums not yet due?

Edited August 22, 2010 by Ford
typo

[robinredbreast]

In this case the bank themselves have claimed that the only part of the acct regulated by the CCA is the issue of a DN, which must be do so under the terms of the CCA for them to benefit from it.

 

The issue of DN is not in question .. its been established that they need one, sent one 87(1), and its defective.

 

The question is their continued assertion that the acct is not regulated in any way by the CCA (apart from the issue of the DN) - and a suitable response... although to be honest I'm just going to draft a letter which I think suits and send it off.

[Bazooka Boo]

This might be of use for you:

http://www.consumeractiongroup.co.uk/forum/showthread.php?265811

[robinredbreast]

HI BB,

 

Sorry the link doesn't work.

 

Having had a read though other threads, I have established that if they claim no formal notification was required or issued by them, and that the only regulation is through the T&Cs issued via branch and with the bank account.

 

Then by virtue of this admission (which I shall SAR them on I think its heading to court), the haven't complied with the OFT directive - which dictates that a letter is issued by the bank to the account holder, advising them of the amout of OD, charges, and method of termination - and if the bank does this they obtain part v exemption.

 

So, if they haven't complied, by their own admission, with the direction of the OFT as noted above - they have lost the benefits of part v exemption (which they haven't mentioned anyway), whereby part v comes back into play, and they then need a fully executed consumer credit agreement to pursue court enforcement - which they can't because they don;t have an exectued agreement....

 

So, if I'm right, they've buggered up, and I;m in the clear. (of course I;ll SAR them on this when I get a spare £10 just to see whats in their files).

 

Anyones thoughts ... ?

 

Robin x