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

[robinredbreast]

Hi HH,

 

I have found a letter from them last year when the OD was revised (increased).

 

It does have the info in it .. including that they would give me 3 weeks notice to repay my OD should they call it in .

 

They didn't give me 3 wks though, their letter was dated the 1 January (New Years Day) and gave me to 24 January to repay the requested amount, which was half of the OD owing.

 

So they were in breach of their own agreement terms regarding service time for repayment, when they requested that half of the OD be repaid.

 

The said they were partially recalling the OD as I had exceeded by OD limit - but this was done from the application of penalty charges in them refusing to pay a cheque.

 

I then CCA'd them regarding the OD element of the account, to which they replied that the account is not regulated under the CCA74, save for the issue of any default notice by them, which they said must strictly adhere to the terms under the CCA74.

 

I then recd a default notice demanding the whole amount, but there was problems with this due to service dates and also demanding the whole amount, as they had only previously requested half of the od be repaid. (this is confirmed by my statements showing a remaining authorised OD of this amount, and also a recent letter saying that they were now withdrawing the £3550 remaining auth OD facility, which postdated the DN), so I can prove that the DN was faulty on few points.

 

I wrote back to them on 20 July with a letter advising them that the account is partially regulated under the CCA74.. etc ... they haven't replied but put it straight to a DCA.

 

So thats where we are up to ....

[the_shadow]

Hi HH,

 

I have found a letter from them last year when the OD was revised (increased).

..

 

Hmm but according to s78 requests in Carey vs HSBC if an "agreement" has been varied they need to supply all variations PLUS the original... hence if the o/d has been increased they need all the other letters too

 

S.

[robinredbreast]

Ooh Shadow ... you've made my day ... !!

 

I've had my account with them for over 20 years .... but never used my OD facility with them, but they kept increasing the approved limit, until it reached £7k ... I only started using it about 12 mths ago.

 

I haven't read the Carey v HSBC so shall have a read of that now.

 

Maybe thats why they threw it straight out to an external DCA as soon as I asked for the original agreement for the bank account, and overdraft facility with proof of my signature giving my authority to process my data. As they would need to go back 20 yrs plus for the original signed form opening the bank account, and that was when they were still Nationwide Anglia !!!

 

So thanks for that advice shadow ... BB has advised waiting for Nationwide to send a formal termination letter, but just to ask the same Q I asked BB .. would you advise sending the "bemused" letter to Roxburghe or just leaving things in the air and see what happens...??

 

Thanks for all your advice ...

 

Robin x:)

[robinredbreast]

Any ideas on whether I should send the bemused letter to Roxburghe ?

[diddydicky]

my input will be of little value as i havent genned up on overdrafts

 

my only understanding is that overdrafts are usually repayable in part or in full "on demand" therefore i cannot see how a DN would be applicable as with a normal running credit agreement.

 

it is my understanding that what looks like a default notice- in the case of an overdraft- is simply a "calling in" letter telling you when it must be repaid- thus (unless i am wrong) the bank chooses the date for repayment of the overdraft- not the CCA

Edited July 27, 2010 by diddydicky

[robinredbreast]

Ok thanks Diddy,

 

The OD part of the acct is regulated. But the bank have advised that they're only compelled to act under the CCA74 in respect to any default notice they issue under s87.. which they say themselves must strictly adhere to the format laid down in the CCA74 ....

 

So my thinking is that if the DN is defective it brings about the same consequences as a defective DN for credit cards & loans ...

 

Many thanks for dropping by and your time Diddy ... ....

 

I will plug on for the time being with a defective DN and termination and see where that takes me ...

 

Robin x

Edited July 27, 2010 by robinredbreast
typo

[Guest]

robin

 

if not seen already, see also this thread for eg http://www.consumeractiongroup.co.uk/forum/legal-issues/235954-big-overdraft-must-respond.html

[robinredbreast]

Hi Ford ...

 

Thanks for dropping in and your heads up on another OD thread .. off there right now .... !!

 

With thanks

Robin x

[Guest]

hi

 

what do you think?

my thoughts are that because it seems that an o/d is 'running credit', and is therefore subject to the cca (to some extent), then a dn is required when they end (terminate) the o/d facility (ie the 'running credit')?

[robinredbreast]

Hi Ford ...

 

I haven't read right through the whole thread yet ... got half way through when a nice caller from a nice DCA called for a chat .. !!

 

But yes I agree, the bank themselves have admitted that they have to send a DN that complies with the CCA74 and experian have also confirmed to me that ODs are recorded on your credit profile as they are a running credit agreement - so yes a DN (IMHO) is definately required to terminate the agreement.

 

I am still waiting for a reply to my last letter which i sent on 20 July and discussed in post 45, proceeded by a letter from a dca chasing ...

 

I haven't mentioned the defective DN ... yet

 

And haven't yet sent the bemused letter to the DCA ...

 

My angle is to throw in the defective DN and termination up to them when the time is right .... BB has told me not to send the "I accept your repudiation" letter until they have written to me definately terminating the agreement.

 

Although they have already told me to cut up my cheque book and debit/cheque card, and that if I use them they will treat it as fraud ..

 

I have about £1000 of charges within the current balance outstanding .. which have also been included in the figure quoted in the DN. (which was for the total amount of od outstanding .. even though their original letter asked for only reduced of it to be repaid ... and I have just recd another letter 2 months after the DN saying (asking for the lot) to say that they have reviewed my OD, and now want remaining half back too .. !!)

 

So a bank not knowing the a*se from their elbow springs to mind ... first they ask for one thing, then something else, then another thing all together ....

 

They give me a headache ...!!

 

What do you think ??

[Guest]

hi

 

imo

yes, maybe wait and see what they come up with re your letter 20/07. (the letter from Rox prob crossed with yours so ignore it for now)

yes, the dn demanding the full amount, and the dca demand for the full amount could be regarded as 'termination'.

[Guest HeftyHippo]

Hmm but according to s78 requests in Carey vs HSBC if an "agreement" has been varied they need to supply all variations PLUS the original... hence if the o/d has been increased they need all the other letters too

 

S.

would you clarify that? My take is that they must supply the agreement as it was at the time of execution, and the terms at the time of the s78 request. The intervening terms need not be supplied

[diddydicky]

the act (supported by the OFT) says that you are entitled to a true copy of the executed agreement.

 

since you would only have signed ONE agreement - then this can reasonably be presumed to be the original since any subsequently amended agreements would not contain your signature and therefore not be true copies of an "executed" agreement-

 

The lender is not obliged to include the signature boxes and signatures so you need to make a clint eastwood style judgement call

 

- i know what your'e thinking punk- where they ever there- or am i being hoodwinked"

 

 

It's a fair bet that if what you have been sent is a microfiche- that it would be obvious if the signatures and boxes had been edited out of it!

 

 

HOWEVER

 

if the creditor sends a Varied agreement then If they do so then they must also supply the original agreement else how can they prove that the original terms and conditions allowed them to vary the agreement

 

this puts them in some difficulty since "enforcement" has been ruled by |McGuffick to include demanding earlier repayment of sums not yet due-OR threaten legal action and OFT guidlelines make it quite clear that the creditor MUST NOT demand earlier payment of sums not yet due OR Threaten legal action when they have not complied with their s77/79 obligations.

 

hence why "certain" lenders try to "construct" original agreements by cut and pasting things on to the back of the microfiche front copy- which were not there in the beginning

[Guest]

hi

 

what do you think?

my thoughts are that because it seems that an o/d is 'running credit', and is therefore subject to the cca (to some extent), then a dn is required when they end (terminate) the o/d facility (ie the 'running credit')?

 

a further thought on this - as others have said, under an od 'agreement' the cr can demand repayment of the od 'at any time'. under s87, a cr must serve a dn in the prescribed form if by reason of any breach by the 'debtor' it seeks termination etc. so, if there has been no 'breach' of the od agreement is a s87 dn actually required in the circumstances?

[Guest HeftyHippo]

a further thought on this - as others have said, under an od 'agreement' the cr can demand repayment of the od 'at any time'. under s87, a cr must serve a dn in the prescribed form if by reason of any breach by the 'debtor' it seeks termination etc. so, if there has been no 'breach' of the od agreement is a s87 dn actually required in the circumstances?

 

an interesting point

[Guest]

an interesting point

 

what do you think? also, where a cr has actually issued a dn re an o/d (even if not technically required) what would be the effect then? eg would they be bound by the dn they issued?

[robinredbreast]

Hi .. just a quick update on my thread ...

 

I still haven;t recd a response from the bank in response to my "oh yes it is regulated" arguement ...

 

I have instead recd a letter from Roxburghe chasing payment for them.... which I think tells its own story !!!

 

I was in previously in breach of my OD limit due to their charges .. when they advised they were withdrawing half of the facility, I was within the agreed limit (just albeit !)

 

It was the bank who told me, in response to my CCA request, that they had to send a default under s87, and that it was only this that had to comply with the CCA74.

 

The DN they sent was wrong on lots of areas, and in effect terminated the account, then after this they wrote to me again saying that they were withdrawing the remainder of my facility ... is this all designed to confuse the unassuming Debtor .. who do they just not know what the hell they are doing ... !!

 

Oh by the way, I have been told by them that they have to give 3 wks notice on any withdrawal (full or partial) of an OD facility, well the letter they sent me (allowing for service) didn't give 3 wks, so they've ballsed that up to .. and are already in breach of their OWN contratual terms ....

 

I haven't told them about the DN yet ... or their own breach of contract ... shall save these little beauties until needed ..

 

I have sent the "bemused" letter to Rox. - let you know what transpires ...

 

Robin .. x

[diddydicky]

as an od is repayable on demand- the lender would not need a DN to demand earlier repayment (IMO) since the whole concept of an OD is based on that principle (ulike a fixed term or revolving credit)

 

if the borrower is in arrears of payments i am not sure how that would work but i would imagine that whilst the bank may have to serve a DN for any arrears under the act- i would imagine that it could still demand the capital part of the loan back at any time

 

not too clued up on the procedure with OD's but that is how i would see it!

[the_shadow]

as an od is repayable on demand- the lender would not need a DN to demand earlier repayment (IMO) since the whole concept of an OD is based on that principle (ulike a fixed term or revolving credit)

 

if the borrower is in arrears of payments i am not sure how that would work but i would imagine that whilst the bank may have to serve a DN for any arrears under the act- i would imagine that it could still demand the capital part of the loan back at any time

 

not too clued up on the procedure with OD's but that is how i would see it!

 

And yet if the bank states it must serve a DN under s87 of the CCA then they've given the creditor the rope needed to hang them imvho. s87 default notices are in a prescribed format with prescribed timescales whereas normal formal demands which is what most banks give are not

 

Long live banks stupidity I say.

 

S.

[Guest HeftyHippo]

well, I've always thought that ODs being repayable on demand, don't need a DN, but its not an area where there is as much knowledge on the site as for credit cards and the like.

 

The bank has said it need to supply a DN..... if thats the case, they shot themselves in the foot havent they? But thats not to say they were right! Maybe the DON'T need to supply a DN for ODs.

 

I think checking with the relevant part of the Act ,might be needed, if I knew what part that was!

 

I think I came across a post last night from a new member who was asking about ODs, who had been told by First Direct that the CCA doesn't cover ODs (I was with FD also, and they said the same to me). I'll look see if can find the thread.

[Guest HeftyHippo]

Here it is

http://www.consumeractiongroup.co.uk/forum/showthread.php?272629-First-Direct-driving-me-insane!

 

she is also asking if ODs need to be closed in any particular way. Come to think of it, they simply closed my current account and OD without even telling me.

 

AM I right in thinking that if you make a CCA for an overdraft, they should supply the OD agreement letter which details the terms of the OD, and if they don't, thats the same as not supplying an agreement for a CC, ie, they can't collect until they do?

[diddydicky]

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)

[Guest HeftyHippo]

Thats very interesting DD and probably true, except we're talking about overdrafts here which don't have a schedule of payments so there is no default sum.Or have I missed your point?

[diddydicky]

i/m thinking out aloud as like you- i am not all that well up on the effects of the CCA on bank overdrafts

[Guest HeftyHippo]

i/m thinking out aloud as like you- i am not all that well up on the effects of the CCA on bank overdrafts

 

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?