Credit Agreements

[ChalkieWhite]

I've been reading a lot about the "credit agreement" discussions on this site, and it's prompted me to ask some questions about my own situation. Apologies in advance if this is a long message!!

 

I have 2 credit card debts - one with MBNA and one with Egg - from early 2001. The debts on these cards escalated after being made redundant back in 2003 when my situation changed completely. Period 2005/early 2006 I was forced to use the cards for living expenses - mortgage, etc. Sold the house in 2005 to clear other debt. In early 2006 the limits where reached on both cards - £9,100 on MBNA and £7,510 on Egg. I have struggled ever since to make payments but have managed to do this. I have paid MBNA £11,700 since Spring 2006 - the balance to date has been reduced by only £1,400 due to the excessive interest rates that were put on the card. Similarly with Egg, I've paid £8,770 since Spring 2006 - the balance has been reduced by only £2,370.

 

I work as a self-employed graphic designer and my work has been diminishing over the past 12 months... and is about to dry up altogether in a couple of months when a long-term contract ends. Due to this recession I'm finding it harder and harder to get work, and being 54 years of age it seems almost impossible to find a full-time job - too old for the industry I have worked in for the past 25 years.

 

I requested copies of my credit agreements and a full statement of account from both parties - letters out in mid-May. Nothing from Egg. I sent a second letter after 15 days requesting again and informing them that I wouldn't be paying anything until I received the CCA. I had calls from them when the monthly payment was due (mid-June) to find out why I hadn't paid anything. I explained and they kept referring to my "complaint" being dealt with by another department. Still nothing, apart from a letter saying my "complaint" was being dealt with. I was not aware that I had actually made a complaint - I simply asked for a copy of my credit agreement. Does anyone have advice about what I do next if nothing is forthcoming from Egg?

 

With MBNA, a letter arrived within the 12-day period with what they have referred to as:

a. A copy of your executed agreement

b. Your up to date terms and conditions

c. A copy of your most recent statement (which shows the state of your account) which has been signed (by MBNA).

 

Initially I thought this was what I had asked for. I have now realized that what they have sent me is:

a. The initial application for for the card

b. Print-out of financial & related conditions

c. Print-out which they refer to as a "copy of your agreement".

 

The latter has my current address in place. I have moved 4-5 times since I took out the original agreement and indicates the 34.9% interest rates I am currently being charged. This is not the original credit agreement, is it? I am unsure of what to do next. I sent a letter to MBNA at the end of last month indicating the changes in my work/financial circumstances and that, having made a personal budget sheet (which I included with the letter), I was only able to pay them £50 per month, instead of the £250 I have been paying them for countless months. I have not received a reply to this letter. They sent me my recent statement with the minimum payment set at £350.

 

I simply don't have the money to pay them anymore. I don't actually know how I'm going to live for the next few months after paying everything else.

 

Any advice would be very welcome! I am not trying to rip anyone off here. I simply can't keep on paying at the rate I've been forced to by these financial institutions.

[cerberusalert]

I've moved your post & created a new thread for you so you don't get lost or missed in someone else's.

[cerberusalert]

Have a read through this thread to help you understand what is required for a CCA to be enforceable; http://www.consumeractiongroup.co.uk/forum/general-debt-issues/162851-consumer-credit-agreements-guide.html

 

Can you post up what you've received after removing identifiers? We'll check them over for you.

[ChalkieWhite]

Thanks... that's very helpful of you. Wasn't sure where to put my question.

[cerberusalert]

Have you ever received a 'Default Notice' for these a/cs? If so can you post them up as well?

[ChalkieWhite]

I'm just scanning the documents MBNA sent me - I'll send those through shortly. In answer to your question, I've never received any default notices for either card. Back in early 2008 I was one of the many people (I gather from what I've been reading) who received a letter from Egg informing me that the card had been cancelled.

[ChalkieWhite]

Sorry to be dumb - how do I include the scans of the pages? I've tried the "insert image" link in the message window but it is asking for a URL.

[cerberusalert]

If you upload them to a hosting site such as Imagefrog - Image Hosting & then copy & paste the URLs back here we'll be able to see them.

[ChalkieWhite]

OK Great. I've done that - below are the list of images I've sent:

 

Imagefrog - Image Hosting :: MBNA01.jpg

Imagefrog - Image Hosting :: MBNA02.jpg

Imagefrog - Image Hosting :: MBNA03.jpg

Imagefrog - Image Hosting :: MBNA04.jpg

Imagefrog - Image Hosting :: MBNA05.jpg

Imagefrog - Image Hosting :: MBNA06.jpg

Imagefrog - Image Hosting :: MBNA09.jpg

 

Hope I've done this correctly.

[cerberusalert]

They have sent an application form that you signed which does not contain the prescribed terms, the other documents are just the T&Cs (probably the present day's) to which they've added some of your present details to give it authticity, send them this;

 

 

Dear Sir or Madam,

 

 

Account no

 

ACCOUNT IN DISPUTE

 

Re: my request under the Consumer Credit Act 1974

 

 

Thank you for your letter dated ........, the contents of which are noted

 

Your attention is drawn to the fact that this account is subject to a serious dispute. On ......... I requested that ........... supply me a copy of the credit agreement covering this account pursuant to the Consumer Credit Act 1974 section 78. To date ........... have failed to comply with my request. Without production of the said agreement I am unable to assess if I am indeed liable for any alleged debt to .............., nor does it give me any chance to evaluate whether any original agreement was ‘properly executed’ as required by the Consumer Credit Act 1974.

 

If it is your view that you are not the creditor, s.175 of the CCA 1974 applies in the case of a simple assignment, and places a duty upon you to pass this request to the creditor. In the case of an absolute assignment, you are a creditor as defined by s.189. If you contend that you purchased the rights but not the duties of any agreement, you are reminded that s.189 of the Act is clear that an assignment is of both rights and duties.

 

For the avoidance of any doubt I have included section 78(1) and 78(6) of the Consumer Credit Act 1974, which states…

 

78 Duty to give information to debtor under running-account credit agreement

(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of [£1], shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

(a) the state of the account, and

(b) the amount, if any, currently payable under the agreement by the debtor to the creditor, and

© the amounts and due dates of any payments which, if the debtor does not draw further on the account, will later become payable under the agreement by the debtor to the creditor.

(6) If the creditor under an agreement fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement;

 

 

Clearly as no agreement was supplied on request, this in no way complies with the requirements of the Consumer Credit Act 1974 and I now draw your attention to section 78 subsection 6 which states If the creditor under an agreement fails to comply with subsection (1) he is not entitled, while the default continues, to enforce the agreement;

 

Clearly this is a situation as described in S.78(6) Consumer Credit Act 1974 and the debt is unenforceable at this time. In addition, I draw your attention to section 127 (3) Consumer Credit Act 1974 which states

 

127(3) 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).

 

This is backed by case law from the Lords of Appeal in Ordinary (House of Lords) the highest court in the land. Your attention is drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the consumer credit act 1974 the agreement cannot be enforced.

 

 

To clarify S.61(1) states

 

(1)A regulated agreement is not properly executed unless—

 

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and

(b) the document embodies all the terms of the agreement, other than implied terms, and

© The document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible

 

In addition the prescribed terms referred to in section 60 CCA1974 are contained in schedule 6 column 2 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and are inter alia: - A term stating the credit limit or the manner in which it will be determined or that there is no credit limit, A term stating the rate of any interest on the credit to be provided under the agreement and A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following—

 

1.Number of repayments;

2.Amount of repayments;

3.Frequency and timing of repayments;

4.Dates of repayments;

5.The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable

 

Therefore based upon the Consumer Credit Act 1974 this debt as it stands is unenforceable and should this proceed to litigation, a court is precluded from making an enforcement order under section 127(3) unless a true copy of the signed agreement is produced..

 

At the point where this account entered into the default situation as described in s78 (6) CCA 1974 no other charges are allowed to be added until such time as ............... become compliant with my request. As ................ are still not in compliance with my request I insist that the following takes place with immediate effect

 

All entries which refer to missed payments be removed from my credit file

All collection activities cease with immediate effect until ............. comply with my request from .date........... or such time as a court makes an enforcement order

In addition, I draw your attention to the Office of Fair Trading’s guidance on debt collection

 

The OFT guidance which was issued July 2003 (updated December 2006) relating to debt collections and what the OFT considers unfair, I have enclosed an excerpt from page 5 of the guidance which states

 

2.6 Examples of unfair practices are as follows:

 

h. Ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment

 

What I Require.

 

I require that you send me a true copy of the executed agreement as required by the Consumer Credit Act 1974. If you are unable to supply the requested documentation because no such agreement is in existence I require written clarification as such.

 

I require that you comply with my request within 7 days of the date of this letter. I will not correspond any further with you until I either receive a copy of the requested documents as laid down in section 78(1) CCA 74 or clarification that such agreement doesn’t exist. I am advised that should you persist in pursuing this debt ignoring the above information you will be in breach of the Administration of Justice Act 1970 section 40 as well

 

No other correspondence will be accepted

 

Should you attempt litigation it will be vigorously defended and the failure to supply documentation under the CCA 1974 is a complete defence to any legal action and your actions will be vexatious and unlawful

 

 

I trust this out lines the situation

[ChalkieWhite]

Thank you very much for looking over the MBNA documents... it is SO much appreciated!! Does the fact that I sent them a letter, after receiving what I thought were the CCAs, requesting to lower the monthly payment due to my current financial situation make any difference to sending the letter you have suggested above?

 

And as far as the Egg agreement is concerned. Nothing has arrived from them since sending them a letter on May15th. I have sent a second letter to them stating that I will not be making any further payments until I receive the CCA. What do you suggest I do if this continues?

[cerberusalert]

Does the fact that I sent them a letter, after receiving what I thought were the CCAs, requesting to lower the monthly payment due to my current financial situation make any difference to sending the letter you have suggested above?

No it doesn't make any difference.

And as far as the Egg agreement is concerned. Nothing has arrived from them since sending them a letter on May15th. I have sent a second letter to them stating that I will not be making any further payments until I receive the CCA. What do you suggest I do if this continues?

You don't have to do anything really, I'd just wait until they get in touch with you.

[ChalkieWhite]

Thank you Cerberusalert!! Have a good weekend, and I'll keep you informed about what happens next.

[ChalkieWhite]

Sorry!! One last question. I've written the letter to send to MBNA. Do I sign it? Or just put my name at the end of the letter. I saw a posting to not sign anything...

[cerberusalert]

yes, just print your name don't sign it.

[ChalkieWhite]

Hi Cerberusalert,

I have had a call this morning from someone at Egg Customer Relations regarding my letters requesting a copy of my credit agreement. They told me the CCA was sent out to me on May 25th... I have received nothing. My initial letter was sent out on May 15th with the cheque for £1. The cheque was cashed but I received nothing. I sent a second letter on June 9th and received a letter from them on June 16th acknowledging my "complaint" and that they were dealing with it.

 

I've received several calls from them in the past month and a half to ask for a monthly payment which I told them in the second letter I was withholding until I had received the CCA. I must have spoken to at least 10 people since May 15th and no-one has ever mentioned that the copy of CCA I had requested was sent out to me.

 

Apparently, they are sending it out to me within the next 10 working days. I have to admit I am very suspicious that it has suddenly appeared now 47 days after my request. Am I right to be suspicious? My partner requested a copy of his CCA from Egg and received it within 10 days. What do you think I should do? I have read postings here where people think they have been fudged together. Unfortunately, I signed the original letters I sent never thinking this was a silly thing to do.

 

My partner has checked through what he was sent and they sent and we are now wondering whether this is the correct agreement. We have mislaid the originals we would have had as we have moved several times since 2004, when he took out his agreement.

 

On his agreement, which is on paper with the Egg logo and "Egg Card Agreement for...", under the details about the card it starts with point 3 "Limit" and stops at point 5 "Repayments". This is not a full-size photocopy - it has been reduced in size. They have also sent a ream of paper with no logo, just plain paper, stating "This is a credit card agreement between us:" with our current address, not the original address where we were living when the card was taken out and has 24 points on it. Plus, pages and pages of screen grabs taken from and Internet Explorer window with the title "Egg Card new credit agreement.

 

We both received letters in April 2008 cancelling the cards.

 

Can you shed any light on any of this?

[cerberusalert]

My partner requested a copy of his CCA from Egg and received it within 10 days. What do you think I should do?

Give them a few days and then send the 'in dispute' letter; http://www.consumerforums.com/resources/templates-library/86-debt-collectors/571-failiure-to-provide-a-copy-of-the-agreement-within-the-prescribed-timescale

I signed the original letters I sent never thinking this was a silly thing to do.

Your signature has probably changed over the years.

On his agreement, which is on paper with the Egg logo and "Egg Card Agreement for...", under the details about the card it starts with point 3 "Limit" and stops at point 5

I'f you post it up we'll check it over.

Plus, pages and pages of screen grabs taken from and Internet Explorer window with the title "Egg Card new credit agreement.

Did he make the application on-line& if so what year?

[ChalkieWhite]

Thanks for the info... I'll send off that letter if nothing comes in the next few days.

 

I'll scan my partner's agreement and let you know when they are up on ImageFrog.

 

He did the initial application for the Egg card online and was then mailed the Credit agreement - it would have been in December 2003 that this application was made as the credit agreement they've sent is dated January 4th, 2004.

[cerberusalert]

it would have been in December 2003 that this application was made as the credit agreement they've sent is dated January 4th, 2004.

Yes in that period they needed to send a seperate agreement to be signed, but it must conform to CCA 1974 and contain all the prescribed terms.

[ChalkieWhite]

I've uploaded the scans. BCM01.jpg is the letter that was sent with the CCA. BCM04.jpg is page 1 of 16 pages. BCM05.jpg is 1 of 30 pages (screengrabs).

 

Imagefrog - Image Hosting :: BCM01.jpg

Imagefrog - Image Hosting :: BCM02.jpg

Imagefrog - Image Hosting :: BCM03.jpg

Imagefrog - Image Hosting :: BCM04.jpg

Imagefrog - Image Hosting :: BCM05.jpg

[ChalkieWhite]

Should I send out the "in dispute" letter you recommended earlier this morning to Egg today?

[cerberusalert]

It would be better to start a separate thread for the Egg agreement in the Egg forum, otherwise things will start to get confusing.

 

Egg aren't my area really, you'll get a better response here; Egg - The Consumer Forums

[ChalkieWhite]

OK - I'll do that. Thank you for all your help.