Cap1 & CCA return

[InKogneeToh]

 

Also it is not possibe to include the prescribed terms in the agreement so it is unenforceable anyway since they wil not have allocated your credit limit.

 

 

 

 

Hi all

 

Not really wanting to put a spanner in the works but with regard to the credit limit on a regulated running-account agreement, the OFT information doc. on form and content states:

 

Financial and related particulars

 

The following information must be shown together as a whole and not interspersed with any other information, apart from cross-references to terms of the agreement and subtotals of the total amount.

 

......................

 

3 The amount of credit to be provided under a fixed-sum agreement (for example, a cash loan) or particulars of the credit limit under a running-account agreement (for

example, a credit card).

 

The credit limit can be expressed as:

a a sum of money, or

 

b a statement that the trader will, under the agreement, periodically determine the credit limit and notify the customer, or

 

c a sum of money together with a statement that the trader may, under the agreement, periodically vary the credit limit and notify the customer, or

 

d if (a) (b) or © above are not appropriate either a statement indicating how the credit limit will be determined and notified to the customer or a statement that there is no credit limit.

Office of Fair Trading 9

 

I believe that this can be shown in the T&C doc. provided that the copy of the T&Cs is given to the debtor at the start and is referred to in the main agreement document.

 

Regards, Pam

[InKogneeToh]

Hi Peter

 

The OFT doc. has an explanation of definitions of some terms in the Act and agreement is defined as:

 

the agreement is the document embodying the credit agreement.

 

‘Embodying’ is defined in the Consumer Credit Act:

 

‘A document embodies a provision if the provision is set

out either in the document itself or in another document

referred to in it’.

 

Regards, Pam

[InKogneeToh]

As far as s59 is concerned, I don't think that would apply to an application form for a credit card in the sense that you are suggesting.

 

An application for a card involves the issuer doing a credit check before accepting the application but in my opinion this is no different than a scenario where a customer signs an agreement in a trader's store (for example) and the agreement is then sent to a separate finance provider. The lender will still do a credit check etc. so the agreement will still be dependant on the lender's acceptance.

 

The main issue I see with application forms is whether or not they contain (or refer to) all of the prescribed terms and whether copies have been given in accordance with s63:

 

63 Duty to supply copy of executed agreement

(1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, and on the occasion when he signs it the document becomes an executed agreement, a copy of the executed agreement, and of any other document referred to in it, must be there and then delivered to him.

(2) A copy of the executed agreement, and of any other document referred to in it, must be given to the debtor or hirer within the seven days following the making of the agreement unless—

(a) subsection (1) applies, or

(b) the unexecuted agreement was sent to the debtor or hirer for his signature and, on the occasion of his signing it, the document became an executed agreement.

 

I can't remember if any of my application forms where pre-signed by the creditor or not so I'm not sure which part of this applies.

 

Regards, Pam

[InKogneeToh]

 

Conclusion

 

We invite further submissions from the Secretary of State on the form of the declaration of incompatibility to be made. It may be of assistance, however, if we indicate our present view. We think that it would be appropriate to declare that, having regard to the terms prescribed by regulation 6(1) of, and schedule 6 to, the 1983 Regulations (S.I. 1983/1553), the provisions of section 127(3) of the 1974 Act, in so far as they prevent the court from making an enforcement order under section 65(1) of that Act unless a document containing all the prescribed terms of the agreement has been signed by the debtor or hirer, are incompatible with the rights guaranteed to the creditor or hirer by article 6(1) of the Convention and article 1 of the First Protocol.

 

 

 

We allow the appeal against the order made on 24 September 1999 for the reasons given in our interim judgments of 23 November 2000.

 

The story continues

 

Hi Terminator

 

The judgement you have just quoted is that of the Court of Appeal in relation to Wilson v FCT. This was later overturned by the House of Lords where it was declared that the relevant sections of the Act are not incompatible to the HRA and remain in force at present. This is why the new CCA 2006 has repealed some of s127 because it was nevertheless felt to be unjust in some circumstances. This comes into effect in 2008 I believe.

 

Regards, Pam

[InKogneeToh]

 

The difference is th creditor does the credit check then you sign at the momoent you sign it, it becomes executed

 

I have signed agreements on trade premises in the past where the agreement was not pre-signed by the creditor. It was then sent to the credit provider for approval who signed it after me. This is when those agreements became 'executed' which is similar to the credit card application process.

 

Regards, Pam

[InKogneeToh]

 

I'm aware that it was overturned by the House of Lords in 2003 on appeal by the SOS.It was brought back to the COA in 2005 and again they allowed Wilson's appeal.I personally think that Lords decesion was wrong because it would have started an uprising similar to what's happening now.

 

Hi again

 

I think you may have got your wires crossed here a little.

 

The COA initially allowed Wilson's appeal but made a declaration that the part of the CCA that had allowed her to win was incompatible with the Human Rights of the Lender because a small technicality had taken all his rights under the agreement away.

 

This then went to the HL in 2003 who declared that the requirements of the CCA did not impinge on the lender's human rights and that the CCA regulations (s127, s61) that had protected Mrs Wilson were necessary (albeit harsh on the lender) in order to give borrower's protection against unscrupulous lenders.

 

The HL judgement was the end of the matter and was in favour of the borrower.

 

The COA cannot override a HL decision.

 

However, the repeal of some of s127 in the 2006 version of the CCA has now removed that perceived 'harshness' to the lender and has given the court's the power to allow (in some circumstances) enforcement of an improperly executed agreement.

 

The HL judgement did however bind the courts to interpreting the legislation within the main objective of the CCA, which is the protection of borrowers not the lenders.

 

Regards, Pam

[InKogneeToh]

Surely as the T&C's are referred to in the document, they make up the executed agreement and the fact the have been omitted means they have not yet complied with your request?!

 

Hi

 

If the T&Cs are a separate document but make up part of the agreement then they must be sent as well. This should be the T&Cs that were in force at the time the agreement was executed.

 

Regards, Pam

[InKogneeToh]

Well the CCA states in s78

 

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.

 

So if the agreement refers to T&Cs then they are required to send that part too!

 

Regards, Pam

[InKogneeToh]

hi

The agreement is enforceable albeit with a court order with only the debtors signature and the prescribed term. Section 127(3)

 

 

Yes, this is yet another grey area that needs clarifying!

 

Regards, Pam

[InKogneeToh]

Yeah, I know what you mean.

 

The only worrying thing stemming from this judgement in my opinion is the fact that it took so much judicial input to interpret just one aspect of the CCA!

 

If the judicial system has to comb through it like a forensic investigation then what chance do we poor mortals have of understanding what it really means!

 

Regards, Pam

[InKogneeToh]

ISection 55

55 Disclosure of information

 

(1) Regulations may require specified information to be disclosed in the

prescribed manner to the debtor or hirer before a regulated agreement is made.

 

(2) A regulated agreement is not properly executed unless regulations under

subsection (1) were complied with before the making of the agreement

 

Makes sense realy otherwise they could legaly alter the document after you had signed it.

This is also mentioned in the oft regs quoted earlier

Regards

Peter

 

Peter

 

I think this refers to prescribed information that may (for one reason or another) not be included in the main document. It doesn't say that the creditor must sign it before the borrower does. Different situations dictate who gets to sign it first and either way is okay.

 

I think section 62 was included to cover the risk of tampering:

 

62 Duty to supply copy of unexecuted agreement

 

(1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, but on the occasion when he signs it the document does not become an executed agreement, (i.e. creditor has not yet signed) a copy of it, and of any other document referred to in it, must be there and then delivered to him.

 

(2) If the unexecuted agreement (not yet signed by creditor)is sent to the debtor or hirer for his signature, a copy of it, and of any other document referred to in it, must be sent to him at the same time.

 

(3) A regulated agreement is not properly executed if the requirements of this section are not observed.

 

Regards, Pam

[InKogneeToh]

The COA cannot override a HL decision.

 

 

 

Sorry the ternminator was right the COA did overturn the judjes decision.

 

The judge rejected Wilson’s first claim but reopened the agreement and

substituted a lower rate of interest, and Wilson subsequently redeemed her car on payment of £6,900. However, she then successfully appealed against the judge’s decision as to the enforceability of the agreement, the Court of Appeal holding that s 127(3) clearly and undoubtedly had the effect of preventing the enforcement of the

original agreement and Wilson was entitled to the repayment of the money she had paid to redeem her car

 

 

Hi Peter

 

The COA allowed Wilson's appeal against the judgement of the 1st instance judge (who had declared the agreement enforceable).

 

However, the COA also made a Declaration of Incompatabiity between s127(3) and the Human Rights Act because the lenders rights were effectively extinguished by the application of that section.

 

This then went to the House of Lords where the Secretary of State was joined to the proceedings. The House of Lords declared that s127(3) was not incompatible with the HRA and that Wilson was entitled to the judgment made by the COA.

 

The Terminator said:

 

I'm aware that it was overturned by the House of Lords in 2003 on appeal by the SOS.It was brought back to the COA in 2005 and again they allowed Wilson's appeal.

 

This is not correct. The HL did not overturn the COA judgement. It dealt with the HRA issue and decided this in Wilson's favour.

 

The HL is the highest judicial court in the UK and could never be overruled by the COA.

 

 

The debtor must be the last to sign otherwise how can he/she be sure what they are agreeing to. It's all there in the act and the regulations.

 

Regards

Peter

 

The debtor does not have to be the last to sign -many agreements are signed by the debtor first. This is why s62 was included - so that a debtor is always given a copy of the unexecuted agreement before it is signed by the creditor. This is to ensure the debtor holds a copy of the actual agreement he signed.

 

S63, on the other hand, deals with the situation where a creditor has signed first.

 

Regards, Pam

[InKogneeToh]

many agreements are signed by the debtor first.?

 

Yes i have had those a blank piese of paper with a sig box at the bottom with a note attached saying just sign we wil fil the rest in later.

 

Peter

 

Hi Peter

 

I really do not want to ruffle anyone's feathers so I guess we will just have to agree to disagree.

 

With regard to your post above, no-one in their right mind would sign a blank piece of paper but if they did the CCA covers this by s62/63 - a copy has to be given to the borrower there and then. So if there is any dispute, he has the original!

 

Regards, Pam

[InKogneeToh]

Hi all

 

Re: credit limits on credit cards:

 

3.10 How should the credit limit be expressed?

 

Sch 1 para 8 requires a statement of the credit limit under a running-account credit agreement. This must appear as part of ‘Key Financial Information’.

 

The credit limit may be expressed as one of the following:

• a sum of money;

 

• a statement that the credit limit will be determined by the creditor from time to time and notified to the debtor;

 

• a sum of money together with a statement that the creditor may vary the credit limit from time to time and notify the debtor;

 

• a statement indicating the manner in which the credit limit will be determined and that notice of it will be given to the debtor; or

 

• a statement indicating that there is no credit limit.

It does not therefore need to be expressed as a sum of money, although the OFT would encourage this in the interests of transparency.

 

The Office of Fair Trading Consumer Credit (Agreements etc) Regs draft FAQs 36

 

 

Sorry to be the bearer of bad news!

 

Regards, Pam

[InKogneeToh]

Hi Smoothy

 

The regulations apply to the form and content of the agreement. The card issuer normally notifies you of your initial credit limit when they send the card.

 

Regards, Pam

[InKogneeToh]

I know what your saying Pam, but my point is, if its to be sent on a separate piece of paper, surely its your word against theirs that you received it and if you didnt receive it, they have the opportunity to alter it in their favour. Not that I would dare to assume that these marvelous financial institutions that have put the Great into Britain would stoop so low as to commit fraud........

 

The credit limit is a variable anyway and the creditor can increase/decrease at any time upon giving of notice.

 

I think you may be confusing this issue with an agreement for a loan where the money is given to you up front.

 

The credit limit only determines the total amount that you may spend if you want to. It doesn't indicate that you have committed to paying back that sum.

 

Regards, Pam

[InKogneeToh]

Hi Tamadus

 

DRAFT 29/4/05

 

Consumer Credit (Agreements) Regulations 1983 as

amended by the 2004 Amendment Regulations

Consumer Credit (Disclosure of Information) Regulations 2004

Consumer Credit (Early Settlement) Regulations 2004

Frequently asked questions (FAQs)

April 2005

OFT786a

 

Regards, Pam

[InKogneeToh]

Hi all

 

I would not like to think that any members here get the impression that I am siding with the lenders by posting up arguments against your collective thoughts.

 

I am 100% WITH YOU but would hate to see anyone incur large costs/distress/retaliation by starting a fight with these institutions that is not grounded in fact and law.

 

I have a worry that the available copy of the 1983 regs (i.e. the amended 2004 version) is being relied upon in the argument that credit limit/apr etc. must be shown on one document. This is now shown in the 'Key Financial Information' box.

 

Prior to the publishing of the 2004 regs (with amendments) I searched in vain on the internet for the original 1983 regs.

 

I just have a horrible feeling that in the original regs. (which would govern all agreements entered into before new regs. came in to force) there was no requirement for all the terms to be on one single doc.

 

Has anyone got a copy of the original regs?

 

I would like nothing better than to have a bomb-proof case against my creditors but having already been through a three-hearing battle with a creditor over improperly executed agreements (won in the end!) I know that you have to be absolutely certain of your facts.

 

Regards, Pam

[InKogneeToh]

Hi

 

Overdrafts are covered by the CCA but are exempt from some of the requirements.

 

Regards, Pam

[InKogneeToh]

Consumer Credit (Agreements) Regulations 1983 as amended by the 2004 Amendment Regulations

 

1.2 Are any agreements excluded from the Regulations?

 

S74(1) CCA provides that Part V of the Act (apart from s56) does not apply to:

• a non-commercial agreement – see Q1.3;

• a debtor-creditor (d-c) agreement enabling the debtor to overdraw on a current account, insofar as such agreements are covered by an OFT determination under s74(3) – see Q1.4;

 

The above agreements are therefore excluded from the application of s61(1) relating to the execution of regulated agreements – see Q1.12.

 

However, by virtue of s74(4) the Agreements Regulations will apply to any term of an agreement (other than a non-commercial agreement) which is expressed in writing. The Regulations will therefore apply to any document embodying such an agreement. In such cases, breach of the Regulations will not render the agreement improperly executed, but may be taken into account in relation to Part 8 EA02 and credit licensing.

 

1.4 What is covered by the s74 determination?

 

A determination under s74(3) was made by the OFT with effect from 1 February 1990. It applies to d-c agreements enabling the debtor to overdraw on a current account, under which the creditor is a ‘bank’ as defined in the Bankers’ Books Evidence Act 1879, provided that certain conditions are satisfied – see Q1.5.

1.5 Are all bank overdrafts exempt?

 

The s74 determination in respect of bank overdrafts (see Q1.4) applies subject to the following conditions:

• the creditor must inform the OFT in writing of his general intention to enter into such agreements;

• the debtor must be informed, at or before the time an agreement is concluded, of the following:

o the credit limit (if any)

o the annual rate of interest and any charges applicable, and the conditions under which these may be varied

o the procedure for terminating the agreement;

• the above information must be confirmed in writing.

 

Furthermore, where a debtor overdraws a current account with the tacit agreement of the creditor, and the account remains overdrawn for more than three months, the creditor must inform the debtor in writing not later than seven days after the end of that period of the annual rate of interest and any charges applicable.

 

Regards, Pam

[InKogneeToh]

OK guys, I am a bit confused now, sorry......

 

Are overdrafts covered or not? lol......

 

Overdrafts are generally covered by the CCA but exempt from part V which covers (amongst other things):

 

Form and content regs.

 

Signing of agreements

 

Duty to supply copies

 

Duty to give notice of cancellation rights

 

Consequences of improper execution

 

Cancellation regs.

 

 

HOWEVER - they must supply you with information in writing of the following:

 

the credit limit (if any)

 

the annual rate of interest and any charges applicable, and the conditions under which these may be varied

 

the procedure for terminating the agreement

 

Regards, Pam

[InKogneeToh]

 

It is not up to debtor to prove he does not owe a debt, it is up to the creditor to prove he does, that is one fact of law you can rely on

 

Sparkie 1723

 

Hi,

 

That is true if it is the creditor who has started the court proceedings. But if the debtor has brought the proceedings, e.g. to claim back payments he thinks he should not have paid for whatever reason, then he has to prove he does not owe that money. The onus of proof is always on the claimant.

 

Regards, Pam

[InKogneeToh]

I

 

 

 

Have OD, but nothing formally in writing, nothing with our signature or A & L signature. nothing qoting interest except statements stating how much interest in pounds we have to pay.

 

The only notification regarding the OD are the monthly statements.

 

Hi

 

Are you sure you did not receive a letter when the OD was first taken up - e.g. we are pleased to offer you an OD of £....., our current interest rate is ...%, if you wish to accept this facility you need do nothing blah blah, you may terminate at any time upon full repayment blah blah (or anything along those lines).

 

I know I have from my bank! You do not have to sign for an overdraft and there is no agreement as we think of them.

 

Regards, Pam

[InKogneeToh]

HI

 

To cut through the stuff it means that banks do not have to respond to your cca 77 requestif you opperate an overdraft.I think that is what we all need to know.

 

Peter

 

Hi

 

With an overdraft there is no requirement to have an agreement as we think of them i.e. doc. in prescribed form etc. There just needs to be a letter setting out OD limit, (current)interest rate and procedure for termination.

 

BUT - I'm not sure that they do not have to comply with s78 as this is in part VI of the Act. I still think there is an obligation to send statement of state of account etc. Unfortunately this doesn't help our cause in any way!

 

Regards, Pam

[InKogneeToh]

Overdrafts are generally covered by the CCA but exempt from part V which covers (amongst other things):

 

Form and content regs.

 

Signing of agreements

 

Duty to supply copies

 

Duty to give notice of cancellation rights

 

Consequences of improper execution

 

Cancellation regs.

 

 

Part 5 (V) is the part of the CCA that covers all the requirements for entering into a consumer credit agreement.

 

Basically the OD exemption from that part means that there is no requirement for an executed agreement, no requirement to send copies (on entering into the agreement) and no requirement for the borrower to sign anything.

 

Regards, Pam