Cabot quoting Goode on DN's

[alangee]

Cabot, as has been reported on here, are apparently now only claiming arrears on credit card claims, even though these arrears total the full amount payable. They say they are justified because

Goode: Consumer Credit Law and Practice - Issue 27, where it apparently discusses the .... need for the service of a Default Notice at IIB[5.167]. It states Section 87 and 88 "apply only where the creditor wishes to take one of the steps specified [in section 87 (1) (a) to (e)] as soon as the period for compliance with the Default Notice has expired. A notice is not required where the creditor simply demands payment for arrears, with or without contractual interest."

 

Now I am a disadvantage here, because being unable to get hold of a copy of the said tome, I am not sure if this is Cabots normal trick of only quoting parts that help them.

 

I am guessing that Goode is referring to the arrears notices prior to issuing a DN. But what if a DN is issued (but not received) and a default is registered on your account (proving that a DN must have been issued), surely they then have to comply with with CCA 1974 and either provide a copy of that DN or proof that it was sent?

 

Any help would be appreciated.

 

Alan

[Guest Old_andrew2018]

any update

[creditcardmug]

Ok,

1. Cabot are not the original creditor

2. Therefore Cabot have bought the credit card debt from the original creditor.

 

If the original creditor has sold the alleged account to Cabot, then, it MUST have terminated the account in order to do so.

 

To this end the original creditor MUST HAVE ISSUED TO YOU A DEFAULT NOTICE. This DN must have been issued in the correct way and conform to the regulations in the CCA 1974, to be effective.

 

I hope this is now clear to everyone.

 

So its no good (in these circumstances quoting goode, or anything else), either a DN was issued or it was not!

[the_shadow]

Hmm I disagree with the selling part of the previous post..

 

The account does not have to be terminated to be sold, it can be sold live ala MSDW to Goldfish to Barclaycard etc etc, also the Egg credit card some years ago. Cabot would have to hold a credit licence and in theory they would have to provide the same terms and conditions as previously in place with the previous owner of the debt.

 

If this is a credit card tho there is no expiry on the credit so how they could say its all arrears I dont understand...

 

JMHO

 

S.

[GALLIVER2516]

This has just happened to me Cabot are asking for whole debt without the issue of a DN from them - just posted a new thread on it.

[nicklea]

 

If this is a credit card tho there is no expiry on the credit so how they could say its all arrears I dont understand...

 

I would suggest that as there is a requirement to make a minimum payment each month then after 20 months or so of no payments, depending on what the minimum requirement is then the whole lot would be in arrears

[Jasper1965]

My 2p's worth....

 

From the OP's post "Goode: Consumer Credit Law and Practice - Issue 27, where it apparently discusses the .... need for the service of a Default Notice at IIB[5.167]. It states Section 87 and 88 "apply only where the creditor wishes to take one of the steps specified [in section 87 (1) (a) to (e)] as soon as the period for compliance with the Default Notice has expired. A notice is not required where the creditor simply demands payment for arrears, with or without contractual interest."

 

 

Now let's look at the law.

 

87 Need for default notice. E+W+S+N.I.

 

(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,—

 

(a)to terminate the agreement, or

 

(b)to demand earlier payment of any sum, or

 

©to recover possession of any goods or land, or

 

(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

 

(e)to enforce any security.

 

(2)Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

 

(3)The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

 

(4)Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

 

 

guess the big question is....

 

Was the agreement terminated?

 

If so DN required as this is a step taken 87(1)(a) as quoted by Goode.

 

 

As for the whole amount being in arrears.

 

If the account was less than £100 then a minimum charge per month would apply so it would at some stage be fully in arrears.

 

If more than £100 then the minimum amount payable per month is a percentage (normally 5%) and in this instance the arrears can arguably never reach 100% of the total.

 

Of course banking maths have created uncertainty in the accounting method which could also lead me and presumably them to show that an account could technically be 101% or 150% or even 1000% in arrears if the argument put forwards by Cabot is extrapolated.

 

Sounds complicated but what if in the previous posters example no payment is made for 21 months or 31 months and the account was not terminated?

 

the duty (under the contract) to pay that 5% pm remains until the contract is terminated unless of course the t&c's specify that upon reaching 100% arrears such duty is released (they don't contain such a clause).

[the_shadow]

I would suggest that as there is a requirement to make a minimum payment each month then after 20 months or so of no payments, depending on what the minimum requirement is then the whole lot would be in arrears

 

I understand what your saying and yes thats common sense but the act gives the creditor an out already and its to use the default notice and then terminate... if they dont use it then they should be punished imho.

 

S.

[creditcardmug]

Come on mate Cabot would have to become a credit card company, ie. a huge bank...i dont think so , what we have here is a t..spot sponging leech type company feeding off the downfortune of the masses!!

[the_shadow]

Come on mate Cabot would have to become a credit card company, ie. a huge bank...i dont think so , what we have here is a t..spot sponging leech type company feeding off the downfortune of the masses!!

 

Not at all, they can buy the account and then write and notify you that your right to withdraw credit is withdrawn but you can still payback at the current rate, allowable under the CCA. Hence they dont have to become a bank.

 

S.

[Fred Bassett]

So what gives them the right to start adding 12% interest?

[Fred Bassett]

Not at all, they can buy the account and then write and notify you that your right to withdraw credit is withdrawn but you can still payback at the current rate, allowable under the CCA. Hence they dont have to become a bank.

 

S.

 

The other question here Shadow is what if the original creditor had already terminated the agreement? By this I mean, for instance, that no more credit was available to you, that the credit card itself had expired and was not re-issued, then the agreement was sold to Cabot. Goldfish/Barclaycard have never sold 'live' accounts to my knowledge to the likes of Cabot.

[the_shadow]

So what gives them the right to start adding 12% interest?

 

Yep thats the argument I would pick up on with them... if they are claiming that the account is live and a default has not been issued then they must comply with the CCA in respect with advising changes to interest rates.

 

If the agreement is dead then lets see the t&c that lets them charge this amount

 

S.

[the_shadow]

The other question here Shadow is what if the original creditor had already terminated the agreement? By this I mean, for instance, that no more credit was available to you, that the credit card itself had expired and was not re-issued, then the agreement was sold to Cabot. Goldfish/Barclaycard have never sold 'live' accounts to my knowledge to the likes of Cabot.

 

I think these discussions would be better placed in the following thread:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?280752-Cabot-Citi-Fan-Club(3-Viewing)-nbsp

 

as it brings into play imho the fact of what the current judiciary are saying in rulings in regards terminations and default notices etc.

 

S.

[Fred Bassett]

Thanks, I'll' subscribe to that and have a read.

[alangee]

Cabot insist that the account is still live - despite the fact that Monument requested return of card and no statements after card wasreturned.

 

Alan