Alphera Financial (BMW Finance) - Defective Default Notice

[HammyUK]

Guys - received a default notice from Alphera Finanacial (BMW Finance) recently.

The letter is dated the 21st April

The Franking is dated the 26th April

I received it the 28th April

The Remedy date is the 8th May.

Now this left me no time whatsoever to remedy the breach in time.

I contacted them the day I received it and queried the remedy date.

I didn't mention the DN being defective - purely the remedy date........

They told me over the phone that they would "allow" me until the 16th May to remedy as a "good will" gesture.

With the bank holidays on the 29th and 2nd the 14 clear days allowed gave a remedy date of the 18th.

Now this I met and the amount was paid however they sent a letter dated the 18th and received today stating that they have "ended the agreement and will apply for a court order to recover the vehicle unless I voluntarily return it".

 

Now surely - if the DN is defective from the outset then they don't have a leg to stand on.

If my reading of various threads here is correct then the money I have paid to correct the defective DN is all that I need to do and in reality they cannot come for more as by the DN being bad they are only entitled to claim the outstanding amount on the defective DN - nothing more.

 

Anyone clarify this for me before I get on the phone to them?

[HammyUK]

Guys - received a default notice from Alphera Finanacial (BMW Finance) recently.

The letter is dated the 21st April

The Franking is dated the 26th April

I received it the 28th April

The Remedy date is the 8th May.

Now this left me no time whatsoever to remedy the breach in time.

I contacted them the day I received it and queried the remedy date.

I didn't mention the DN being defective - purely the remedy date........

They told me over the phone that they would "allow" me until the 16th May to remedy as a "good will" gesture.

With the bank holidays on the 29th and 2nd the 14 clear days allowed gave a remedy date of the 18th.

Now this I met and the amount was paid however they sent a letter dated the 18th and received today stating that they have "ended the agreement and will apply for a court order to recover the vehicle unless I voluntarily return it".

 

Now surely - if the DN is defective from the outset then they don't have a leg to stand on.

If my reading of various threads here is correct then the money I have paid to correct the defective DN is all that I need to do and in reality they cannot come for more as by the DN being bad they are only entitled to claim the outstanding amount on the defective DN - nothing more.

 

Anyone clarify this for me before I get on the phone to them?

[dx100uk]

how much have you paid on the car?

 

sadly since ramkines - DN's can be defaective. they just iissue another one

 

dx

[HammyUK]

But thats the point - they didn't issue another!

 

And why can it NOT be defective if it does not allow the REQUIRED timescale as set out in legislation?

 

They let the defective one run and have now sent me a termination notice asking for "voluntary return of the vehicle" or they will apply for a court order.

 

I can clearly show the defective DN allowing me less than a week to remedy AND the date it was remedied even though it was defective.

 

[edit]

we have paid way over half of the debt

 

- the DN clearly states that "if you have paid over one third of the total amount payable then we may not take the goods back against your wishes".

 

we have paid the outstanding amount on the defective DN by the LEGAL date - how can they terminate?

 

There is no outstanding amount

 

they updated my file on the 8-5 (the date of remedy on the defective DN) to show 2 late payments.

 

No default showing.

[dx100uk]

if you have paid more than half you could give the car back and owe nowt more

 

depends if you want the car

 

if not let it go to court and tell this to the judge , it will never get that far,

 

its a shame that the dn rules are all but ruined by the liikes of there reclaim co's

 

dx

[HammyUK]

If we give the car back - I know damn well they will shift it on at a loss and come back for more.

The wife definitely wants to keep the car though - will write them a "stern" letter pointing out their "mistake" and go from there.....

[HammyUK]

Hows this for a letter to them?

 

HammyUK

Blah de Blah

 

 

 

Alphera Financial Services

Europa House

Bartley Way

Hook

Hampshire

 

 

Date: 20th May 2011

 

Your Ref : DN/123456

Agreement number: 123456

 

With reference to your recent termination letter received today the 20/5/2011, I would like to outline certain points in error.

 

Firstly, the monies legitimately due were paid unto you on the 18th May 2011 in line with the correct legislation and the requirements set out within for the prescribed timescales.

 

Secondly, your default notice dated 21st April 2001, posted the 26th April 2011 was incorrectly drafted and as such invalid.

I am sure an organisation such as yourselves is fully aware of the legislation in place pertaining to the issue of such a default notice and its prescribed terms and layout.

 

For the avoidance of doubt – I would like to draw your attention to the legislation below.

 

The requirement for a valid Default Notice to lawfully Terminate an Account whilst in default

 

1. Notwithstanding the matters pleaded above, the Claimant must under Section 87(1) of the Consumer Credit Act 1974 serve a valid Default Notice before they can demand early payment of sums not yet due under a Regulated Credit Agreement.

 

2. Under the Interpretation Act 1978 Section 7, it states:

 

Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

 

2. Practice Direction

Service of Documents - First and Second Class Mail.

 

With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1). Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.

 

2). To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-

(a) in the case of first class mail, on the second working day after posting;

(b) in the case of second class mail, on the fourth working day after posting.

"Working days" are Monday to Friday, excluding any bank holiday

.

3). Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.

4). This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

 

8th March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division

 

3. Further to point 2 above, CPR rules on service also state the required timescales to be given for

 

serving of documents :-

 

Under CPR 6.26 First class post (or other service which provides for delivery on the next business day) is deemed to be “served” The second day after it was posted, left with, delivered to or collected by the relevant service provider provided that day is a business day.

 

4. The Default notice supplied by the Claimant is dated Friday 3rd August, to allow service in line with the statutory requirements mentioned in points 2 & 3 above, 2 working days were required to allow for 1st Class postage. Thus the Rectify date should be 14 calendar days from Wednesday 8th August, namely Wednesday 22nd August 2007, not the 14 calendar days from the date of the letter as stated in the Default notice which would have been 17th August.

 

5. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory 14 clear days to rectify the breach. I also note that to be valid, a Default Notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such a document is laid down in the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237).

 

6. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give me a counter claim for damages - Kpohraror v Woolwich Building Society [1996] 4 All ER 119.

 

 

 

7. It is submitted that the above Default Notice served s87(1) Consumer Credit Act 1974 failed to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561).

 

 

 

8. For a Creditor to be entitled to terminate a regulated Credit Agreement where there is a breach, demand repayment in full or take any legal action to recover any monies due under the Agreement, a creditor must serve a Default Notice under section 87(1) of the Consumer Credit Act 1974 which states:

 

Section 87. Need for Default Notice

 

(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.

 

9. The Act also sets out via Section 88(1), that the Default Notice must be in the prescribed form, as below:

 

Section 88. Contents and effect of Default Notice

 

(1) The Default Notice must be in the prescribed form…

 

 

10. The wording must make it clear that no variation is acceptable. Therefore it cannot be dispensed with as a De Minimus issue.

 

 

11. I note that the regulations do not allow any variation in the form of these statements and therefore it is suggested that where the statements are not as laid down in the regulations the Default Notice is rendered invalid as a consequence.

 

 

 

 

 

 

12. In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the Court addressed in some detail the issue of the contents of a Default Notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the Default Notice invalid. I quote the comment of KENNEDY LJ: "This statute was plainly enacted to protect consumers, most of whom are likely to be individuals" the judgment appears to confirm the consumer credit legislation made under the Consumer Credit Act 1974 as plainly enacted and set out to offer protection to the consumer. Therefore it is suggested that the failure of the Claimant to set out the Default Notice in accordance with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

 

13. The Claimant’s failure to issue a valid Default Notice must surely prevent a right of action and would make any termination of the Agreement unlawful, as statute provides the procedure that must be followed. Since the Claimant has failed to adhere to statutory procedure it is averred that the Claimant does not have a right of action, and can never now have a right of action having terminated the Agreement unlawfully.

 

14. This is at all times an Agreement Regulated by the Consumer Credit Act 1974. There is no provision in the Act that allows a large financial institution to terminate an Agreement that is in alleged default or breach simply by giving notice to the Consumer. Section 98(6) makes that quite clear. The Creditor must follow the steps outlined in Section 87 and Section 88 if they are to lawfully Default and Terminate, and enjoy the benefits of Section 87.

 

15. Finally, an invalid Default Notice cannot be remedied by simply issuing a new Default Notice.

 

The Claimant may not serve a second effective default notice in prescribed form post-termination of the agreement. Any such second default notice will necessarily state a date by when I would be required to comply after which in default the agreement would terminate. The second default notice would therefore contain the fiction that the agreement endured when that cannot be the case, as it was terminated on 18th May 2011. Terminating an Agreement on the back of a defective Default Notice, simply confirms the undeniable truth that Termination of the agreement by the Claimant was carried out in circumstances which then prohibited them from enjoying the benefits of Section 87, namely the opportunity to seek early Payment of a sum that was, prior to Termination, only payable in the future.

 

 

Please advise me of your intentions to rectify this matter amicably within 14 days of the date of this letter. Failure to notify me within this period will be taken as acknowledgment of your intention to cease activity on this unlawfully terminated account and notice of your unconditional acceptance that no further debt is owed and the balance of the account is reduced to zero.

 

 

 

 

 

Please take note:

 

1. that due to the monies owing being paid unto you in the correct manner and timescale.

 

2. The Default notice supplied by the youis dated Thursday 21st April 2011 yet was not franked for postage until the 26th April 2011.

To allow service in line with the statutory requirements as mentioned above, 2 working days were required to allow for 1st Class postage, which the franking does not state. Thus, assuming second class postage was used, the Rectify date must be 14 calendar days from Wednesday 4th April, namely Wednesday 18th May 2011 due to the bank holidays on the 29th April and the 2nd May 2011, NOT the 8th May 2011 as stated in the Default notice issued.

 

3. As such, your failure to correctly draft the required Default Notice as required by legislation renders your termintion notice dated the 18th May 2011 invalid and unlawful.

 

4. The breach was remedied correctly as per sec.87(1) of the Consumer Credit Act 1974 by the legitimate due date and as such your actions on this account are unlawful and vexatious. I wiil not hesitate to recover any such damages due to me by your actions.

 

 

I look forward to hearing from you within 14 days with your resoloution to this matter.

 

 

Yours

HammyUK

[klumpy]

neat job, I sense you were chuckling with glee while spelling 'resolution' tho....lololol

[citizenB]

Erm, I think if you remedied the breach (regardless of the defects in the DN) then I rather suspect that there would be no issue to raise.

[HammyUK]

Thats my thought but they still sent the termination letter AFTER they received payment!

They refuse to acknowledge it being incorrect and then "allowed" an "extension" to the 16th.

[craigers]

i'm no expert but i was under the impression that since they terminated the account before they were "entitled to", then not only can't they default you but they can't claim any outstanding balance over an above any arrears. or is it different on hp?

[HammyUK]

Well they terminated the agreement and have now placed a DEFAULT on my credit file.

Solicitors letter asking for the "voluntary return" of the car too.

Promptly told the Solicitor what they have done and they are "looking into it whilst the account is placed on hold".

As far as I'm concerned - no agreement, dodgy DN and termination letter - they can go swing, no more money from me again.

They didn't reply to my recorded delivery letter either in any way so I guess the "14 days or account settled" clause has kicked in.............

[dx100uk]

i thought all these dodgy DN issues has now gone out the windows since rankines and careys etc they can just issue a new one?

 

doesn't really change things about the termination before etc etc though i dont think

 

just though i'd read something on another thread somewhere?

 

dx

[HammyUK]

They didn't issue another one though - thats the whole point!

Also there is this -

 

Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but gives rise to a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119

[dx100uk]

i think all that lot is in the past now hammy

though this makes interesting read

leeeched from somewhere on here

 

You could have a good claim here. On the assumption that this is a regulated hire purchase/conditional sale agreement and you had paid more than one third of the total purchase price, they can only repossess the vehicle with either a court order or your consent. Of course, you initially gave consent by signing the VS form, but the key is that that consent is revocable. In other words, it still has to exist at the time of repossession. In the circumstances you describe, it is highly arguable that you had withdrawn your consent when they took the vehicle (otherwise why would you deny them access?). If they did repo without your consent, then the good news is that the CCA requires them to repay you everything you have paid under the agreement, including your deposit - so effectively you will have had a totally free car for the time you had it.

 

dx

[Ricardino]

Hi Hammy, not wishing to hijack your thread (free car sounds good to me) but wish to ask site team re defective DN.

Although rankine & harrison judgements appear to have erradicated defective DN issues what if the OC terminated on back of

DN asking for full balance? Does that mean DN bad > terminated account > no possiblity of reissue good DN ????

[dx100uk]

its not exactly my ballgame without investigating properly

but i think its now understood that they 'could have' issued another 'valid' DN, so negaTES the arguement.

 

you'll have to use the advance search and read up.

 

this is a selfhelp site too!

 

dx

[HammyUK]

They "could have" BUT didn't.

[HammyUK]

So reply to my letter - basically "Bog Off".

They claim delay in posting because of bank holidays is ok.

They claim they allow 16 days as standard even though their DF was tosh.

They claim that I didn't make the payment until 8 days after the deadline even though I have the faster payments receipt showing the funds in their accounts within 2hrs of making it.

 

Will have to wait to see what their next move is I guess...........

[HammyUK]

Right had several emails from their legal team acting on their behalf.

Basically they can't add up!#

Have one of them stating that the figures they have "from our client" showing us as being rather "in credit" and now another one of them is trying to ignore these figures and tell us that we have 7 days to cough up more money or "they will re-activate the agreement and re-issue another default notice"!!

How the f*ck can they do this?

I'm certain its not legal - anyone got an idea which section of the CCA might have a protection to this? The vehicle is protected under sec.90 so they can't have it without a court order but surely there is a section that stops a terminated account being re-activated without my consent just so they can issue another default notice??

[citizenB]

TBH, I think they are on shifting sand here. You remedied the Default Notice and then they wrote telling you they were ending the agreement. IMHO, there is now no agreement on which they can effectively serve a Default Notice.

 

It would be really good if the Judgement in the Shakespeare appeal were to be handed down PDQ. I understand it has been "reserved". Whatever the outcome, it would surely put an end to the speculation.

 

Again IMHO, judgments handed down where it has been suggested that a fresh DN can be reissued after an agreement has been ended/terminated are wrong.. but we really need clear guidance on this.

 

 

Not much help to you I think, Hammy

[HammyUK]

Cheers B - not at the moment but was wondering if there was anything within the CCA that prevents them.

As sec.90 prevents them taking the vehicle because it is "protected" - surely there is something about termination and rights, etc?

TBH - I may just tell them to see me in court as there is already a DN on my file and the car is safe for now.

If they want to come and take it then we're quids in again because of sec.90 - they would have to return everything we've paid to date which isn't far short of £20k

 

Add to the fact that the DN on my file has been removed and replaced with a late payment marker!

So they have seemingly re-started my agreement and are going to re-issue another default notice and default me again if they don't receive the alleged arrears within 7 days.

Edited August 6, 2011 by HammyUK