Default Notice Issued on Terminated Account

[Jamesx81x]

Hi

 

Just wondering what makes a creditor think they can issue a default notice on an account that was terminated by them in July 2010?

 

Any Ideas?

 

Thanks

[liquidauctions]

Hi James;

They usually terminate an account whilst in default. If you provide a little more info we can try and help mate.

[Jamesx81x]

It was an a HP agreement. They terminated the account back in July 2010 then went on to issue legal action against me.

 

I defended in full on the grounds their default notice was defective therefore had no right to any claim under section 87 of the cca. In the November they discontinued due to that very fact stating themselves they had no legal basis.

 

Now they have issued a further default notice April 2011 stating that as they terminated on the back of a defective default notice the termination basically never happened and they are pursuing me yet again.

 

All they are doing is trying to get round the fact they would have to apply to the courts to re-issue the original claim and as that is a no go they are now doing what they are doing.

[Guest]

HI

Yes i am affraid they are correct. If the default notice was defective then the default termination would have also been inafective.

 

They are i am affraid perfectly within there trights to re issue a default notice.

Did they reposses their goods?

 

Peter

[izzitme101]

I owuld question that, if an agreement has been terminacted, and accepted as terminated, theres no agreement on which to serve another default notice?

[Guest]

I owuld question that, if an agreement has been terminacted, and accepted as terminated, theres no agreement on which to serve another default notice?

 

Then with the greatest of respect you would be arguing it with someone else

 

Peter

[liquidauctions]

I think this may come under the revocing of double jepordy in 2005. If it does then they are within the law.

[Jamesx81x]

So where does Section 87/88 of the CCA come into play then? A creditor loses any right to claim under the act when it is an unlawful recission of contract.

 

The answer is simply 'oh we buggered up by terminating the account that way lets try again'? What is the point of Section 87/88 if that is the case.

 

There seems to be alot of confusing info on this site as i have read over many posts with the similar thing all stating the default notice cannot be re-issued after an account has been terminated. Even posts by site team members state that.

 

A terminated account means surely that, the fact that they have done it on the back of a doddgy default notice surely just means they cannot claim? Otherwise where is the protection for the consumer?

[Guest]

So where does Section 87/88 of the CCA come into play then? A creditor loses any right to claim under the act when it is an unlawful recission of contract.

 

The answer is simply 'oh we buggered up by terminating the account that way lets try again'? What is the point of Section 87/88 if that is the case.

 

There seems to be alot of confusing info on this site as i have read over many posts with the similar thing all stating the default notice cannot be re-issued after an account has been terminated. Even posts by site team members state that.

 

A terminated account means surely that, the fact that they have done it on the back of a doddgy default notice surely just means they cannot claim? Otherwise where is the protection for the consumer?

 

HI

Yes there was much confusion, however i think you will find that most are now agreed that DNs can be re issued and an account cannot be terminated on the back of a defective DN.

 

Also dont presume that site team members know any more than anyone else on here, they dont. They are here merely to make sure we behave ourselves.

 

Peter

[postggj]

Peter

 

i see the logic in your statement and totally agree but the question i keep asking myself is

 

a creditor can terminate an account at any time, even if the account is up to date and not JUST IN arrears

so how can an inafective default notice be used to unterminate a terminated account when its not relevant

[Jamesx81x]

People will always have their interpretations on the CCA.

 

To say an agreement is not terminated on the back of a defective default notice though is hard to understand.

 

For example there are laws in place such as to drive a vehicle you have to have the relevant licence to do so. If you are stopped by the police they will not turn round and and say get on your way until you get your licence you will be arrested for breaching that part of the law.

 

The same applies to the CCA in my view, if a creditor terminates an account on the back of a defective default notice then they have breached that part of the CCA where it sates they cannot do that and as a result they cannot enjoy the benefits of Section 87. It doesn't mean the termination has not taken place it means they have breached the act deal with consequences.

 

It seems to me creditors and their solicitors are using your view as a way around of been able to issue further court action without applying for the permission of the court as first time round they messed it all up. It doesn't state in the act that an agreement is still live if not terminated correctly it simply means the act has been breached by the creditor.

 

In Woodchester Lease LJ Kennedy makes the valid point that such an organisation should easily be able to calculate without error how much is actually owed.

 

There is also case law that states when both parties agree to termination then the contract becomes just that and is no longer in force. It needs both parties to agree for the agreement to become live again.

 

A terminated agreement i believe is just that, organisations may think they can wriggle out of everything but the act is there to prevent that. Had they followed it correctly in the first place then it would have worked in their favour but they didn't.

 

To shed a bit more light on this i would like to point out that 4 payments were missed on this agreement and during that time i made 4 attempts to come to an arrangement with the creditor about repayments which they ignored and finally terminated the agreement. They then took legal action which they discontinued and are now trying to get round it by issuing a further default notice. If the creditor had have communicated with me in the first place then the agreement would still be running and due to end this December.

 

So after all that why should they make out its them who is the injured party.

[Jamesx81x]

Termination (Definition)

 

Cessation; conclusion; end in time or existence

 

When used in connection with litigation, the term signifies the final determination of the action.

The termination or cancellation of a contract signifies the process whereby an end is put to whatever remains to be performed there under.

 

Fairly accurate description of what a termination is i think.

[Jamesx81x]

Another issue with this case if anyone can answer?

 

There is a separate loan agreement for various things detailed on my HP agreement to which i received a separate default notice for.

 

As it is a separate agreement to the HP should i not receive a specific statement detailing all the loan payments and interest on the account in addition to the statements i receive showing my HP payments?

[Guest]

Peter

 

i see the logic in your statement and totally agree but the question i keep asking myself is

 

a creditor can terminate an account at any time, even if the account is up to date and not JUST IN arrears

so how can an inafective default notice be used to unterminate a terminated account when its not relevant

 

Hi Postbagg

Termination of an agreement is not the same as voiding the agreement.

If an agreement is terminated it still exists, it exists as a terminated agreement. As long as there are liabilities under the contract an agreement exists. I know this is not an easy concept to understand because of the language, it is counter intuitive but it is never the less true.

The default notice is statute, just because the agreement is terminated does not mean that the statute does not apply to it, as long as there are liabilities there is an agreement as long as a commercial agreement exists then statute must apply to it.

So it is not a matter of unterminating an agreement, it does not matter if the agreement is terminated or not, in a contractual sense. Statute will still apply, the statute is not terminated.

In the case of a default termination you have a different scenario, because in that case the termination is part of the enforcement process, it is if you ike the remedy for default so no default no default termination.

Best regards

Peter

[Guest]

Hi

Thought i would see what the OFT had to say about default notices being isued on contracturally terminated accounts. This is the reply.

 

Dear Mr Bard

 

Thank you for your e-mail of 21 March 2011 to the Office of Fair Trading (OFT).

 

In reference to your enquiry, I have spoken with our credit team who have provided the following information.

 

The creditor could issue a default notice or could continue with the termination provisions if there is no amount due on default. The creditor can serve a notice of default sums under Section 86E of the Consumer Credit Act while continuing with the termination procedure.

 

I hope this information proves helpful.

 

Yours sincerely

 

Gurpriya Tooray

Enquiries and Reporting Centre

 

 

This was my query

 

 

Dear Sirs

 

I wonder if you could answer this for me.

We have a member who has had his credit card terminated under the contractual term in his agreement, he is not nor has ever been in arrears.

 

Does this mean that if in the future he falls into arrears and breaches the payment arrangement the creditor will be unable to issue a default notice and terminate s the account is already terminated.

 

PeterBard

 

TCU

 

 

 

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Peter

[Jamesx81x]

Post 12 gives the definition of what happens when a contract is terminated.

The termination or cancellation of a contract signifies the process whereby an end is put to whatever remains to be performed there under.

Cant get more clear than that. Where does it state that a terminated agreement is not just that?

When a creditor issues a notice of termination, they are releasing you from all future instalments by demanding the balance in full. So many months down the line when they decide to have another pop at constructing a correct default notice can they turn round and say you should have been paying your instalments all along?

By issuing that notice whether done in line with the CCA or not they have invited you to stop paying on the agreement by saying there no longer is one. They can’t have it all there own way!!!

[Jamesx81x]

Also Section 86E refers to a default sum notice not a default notice there is a difference.

[Guest]

Post 12 gives the definition of what happens when a contract is terminated.

The termination or cancellation of a contract signifies the process whereby an end is put to whatever remains to be performed there under.

Cant get more clear than that. Where does it state that a terminated agreement is not just that?

When a creditor issues a notice of termination, they are releasing you from all future instalments by demanding the balance in full. So many months down the line when they decide to have another pop at constructing a correct default notice can they turn round and say you should have been paying your instalments all along?

By issuing that notice whether done in line with the CCA or not they have invited you to stop paying on the agreement by saying there no longer is one. They can’t have it all there own way!!!

 

Hi

You are correct in as much as a conrtactural termination means that the terms of the contrasct no longer apply to the agreement, and once terminated the ballance is due.

The problem, is that the court would not enforce, even of it was an unregulated agreement. the court needs a reasopn to enforce, someone would have had to do somethig wrong or trigger an event mentioned in the cotract.

If the creditor tried to enforce after a none default termination there would be no cause of action they could not. As long as the debtor continud to repay as agreed common law would not allow any enforcment and niether would statute.

 

All a termination does is remove the mechanics of servicing the loan, but the loan still remains it has to be repaid.

 

It may well be that the creditor would shoot himself in the foot by terminating the contract particularily if there was no facility for charging post termination interest in the terms of the contract.

 

Peter

Edited April 23, 2011 by peterbard

[Guest]

Also Section 86E refers to a default sum notice not a default notice there is a difference.

 

Hi the first line says" a creditor may issue a default notice" the inclusion of the notice is also required under CCA 2006

 

You would be better served to try and learn, sorry if that sounds concieted, there is much i do not understasnd but this particular aspect i am completly confident about

 

I new what the answer to my query would be when i sent this to the OFT,the purpose was to help help people on here.

Peter

Edited April 23, 2011 by peterbard
tact reflex failed to cut in

[Jamesx81x]

Yes you are correct in sayig the loan remains and needs to be paid....if it has been done in line with Section 87.

 

If an invalid default notice is issued then they have breached the act by terminating the agreement therefore are unable to enjoy the benfits laid down in the act.

 

An agreement once terminated is just that the view that it is not seems to be the creditors solicitors etc way of getting round the fact they messed up first time. Afterall if they did things how they should these arguments wouldnt even arise.

 

There is nothing to state an agreement still exists it all depends how you want to interpret the act and the above is my interpreation of it.

 

Did you manage to read post 13?

 

James

[Guest]

Termination (Definition)

 

Cessation; conclusion; end in time or existence

 

When used in connection with litigation, the term signifies the final determination of the action.

The termination or cancellation of a contract signifies the process whereby an end is put to whatever remains to be performed there under.

 

Fairly accurate description of what a termination is i think.

 

hi

Purely in the spirit of trying to clear up missconceptions. This has errors one being that in a consumer contract cancelation and termination are not the same thing, they represent different processes and are dealt with under different sections of the act.

Cancelation 69

termination sections 76,98 87.

Canceling a contract would meen the agrement being rescinded and all liabilities being repaid.

As far as the termination being the process wherby an end is put to whatver remains to be performed on the contract, it does not however absolve the debtor of his oigation to repay the debt and if he doesnt he is open to sanction undr both common law and statute

THe liiabilities remain so the agreement remains, the contract can only be desolved when the liabilities are discharged.

 

Peter

[Jamesx81x]

In response to your post 19 you a referring to an account where there is no sums owing at time of termination.

 

How exactly is that relevant to an account that is in arrears at time of termination??

 

Please dont ask me to try and learn and i find it rather arrogant that you think i have no knowledge of the CCA.

 

It seems to me by the many posts i have read by you regarding these matters you are right and everyone else is wrong where as the majority seem to disagree with you!

[Jamesx81x]

You can only ask for the full balnce under Section 87 if you have issued a perscribed default notice!

 

If you issue an incorrect one then you have no rights to claim under under it.

 

A terminated agreement is terminated. Follow the CCA correctly and the creditor wouldnt be in the situation they find themselves in.

[Guest]

Yes you are correct in sayig the loan remains and needs to be paid....if it has been done in line with Section 87.

 

If an invalid default notice is issued then they have breached the act by terminating the agreement therefore are unable to enjoy the benfits laid down in the act.

 

An agreement once terminated is just that the view that it is not seems to be the creditors solicitors etc way of getting round the fact they messed up first time. Afterall if they did things how they should these arguments wouldnt even arise.

 

There is nothing to state an agreement still exists it all depends how you want to interpret the act and the above is my interpreation of it.

 

Did you manage to read post 13?

 

James

 

Hi#

I think if you mull over what has been said in my earier posts on here and elswhere the penny will drop, it is difficult to get your head arround initially.

Yes i read the earlier post , to me they should produce a sepperate statement, i think section 18 of the act would apply here. Also the sanctions for not producing anannual statement in the 2006 regs.

 

peter

[Guest]

In response to your post 19 you a referring to an account where there is no sums owing at time of termination.

 

How exactly is that relevant to an account that is in arrears at time of termination??

 

If arears are owing at terminatin the presumably a default notice would have been issued. If not it would have been a contractural termination and adefault notice could be issued anyway as expained earlier

 

Please dont ask me to try and learn and i find it rather arrogant that you think i have no knowledge of the CCA.

 

In this area you have far less knowledge than i do that is evedent

 

It seems to me by the many posts i have read by you regarding these matters you are right and everyone else is wrong where as the majority seem to disagree with you!

 

 

Yes as i said it is difficult to get your head around at first but most re begining to see the light. You know you can always check this out off this forum always a good idea.

Peter