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Regarding faulty Default Notice & Termination


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Well, here we are at AD2012 - I wonder what surprises nasty or otherwise our useless political leaders have up their sleeves for us this year - no doubt we shall find out in due course.

 

In the meantime, I have a problem and would be grateful for a few thoughts on the matter...

 

Mindful of the various changes that the judges have taken upon themselves to come up with over the last year or two, I recall that whilst a Default Notice can be corrected at any time simply by the creditor submitting a new one (as often as he wishes that is until he gets it right) I also seem to recall that if the creditor makes no effort to correct a faulty DN, then terminates, (17 days later in this case) that is the end of the matter and all they can claim are the arrears.

 

The claim of arrears equally applying to a DCA as they have sold it to Caboot who is claiming the whole lot - ignoring the faulty termination.

 

The Default Notice I refer to did not allow the full 14 days for 2nd class post - it was 5 days short.

 

... and I did accept the termination in writing some months later.

 

Comments of all shades are welcome and appreciated - thanks or otherwise in advance :-)

 

Happy New Year to all - hope all your dreams come true :cheer2:

Edited by charlie*
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I believe that IF it is 'sold' to a DCA, then yes, only the arrears can be claimed as it was UR when the OC had it, and they failed to correct their mistake. But I could be wrong?

Who ever heard of someone getting a job at the Jobcentre? The unemployed are sent there as penance for their sins, not to help them find work!

 

 

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Hi BB, yes, I have their NoA - printed by the DC but on the OC's letter heading.

 

As a matter of interest, I did an SAR to the DCA. The very last two statements from the OC did not show the bottom line - all the others did over four years did so I'm going to submit an SAR to the OC - I can't help but feel that the bottom lines might have been deliberately deleted.

 

Thanks

 

charlie*

(RS att'd 29 Field - 25pdrs)

(RS att'd 2 RHA - Sextons)

(then other places)

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Well chaps,

 

I'd really like to dig a little deeper into this - but I don't have much time left to come up with an answer.

 

If I used the faulty DN (say 5 days short of 14 days) is there any history herein of a DCA challenging that in court? - 'cos if they did and the judge found for them, then the sh-item-toc would sure be flying in this house.

 

Any thoughts - anyone?

 

Many thanks,

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The most recent hearing on the Brandon v Amex case is on on your side - It was found that an agreement cannot be enforced on the back of a non compliant DN. Also look up Harrison v Link Financial.

 

If it is 5 days short of the 14 days then it is clearly not compliant. If it is not compliant you could consider applying for an SJ as it is a statutory requirement.

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The most recent hearing on the Brandon v Amex case is on on your side - It was found that an agreement cannot be enforced on the back of a non compliant DN. Also look up Harrison v Link Financial.

 

If it is 5 days short of the 14 days then it is clearly not compliant. If it is not compliant you could consider applying for an SJ as it is a statutory requirement.

 

I read through the Brandon appeal and the way I see it, he lost - so I'm not sure what you mean - un less there has been something more recent ??

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Link to the Brandon Appeal

 

http://www.bailii.org/ew/cases/EWCA/Civ/2011/1187.html

 

This Paragraph may help.

 

 

  1. Thirdly, if, as a matter of construction, the Default Notice has not or may not have allowed the minimum statutory period for Mr. Brandon to remedy the breach, then it is (at least) realistically arguable that the defect cannot be overlooked as de minimis. To my mind, this conclusion applies both to the failure to allow a minimum 14 day period and to the absence of prejudice flowing from the defect in the Default Notice. Insofar as DJ Gisby and HHJ Denyer thought otherwise, I am, with respect, unable to agree.

And Brandon won

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If a DN is not faulty, they can terminate, as there is a clause in the contract which allows a process i.e. serve a DN- wait for the agreed time- terminate and sell. In fact there is usually a clause stating 'we can ask for the whole amount back at any time with a period of notice'.

 

If a DN is faulty, any action they take is non consequencial and doesn't affect the contract, as they have not followed the correct procedure, so the contract is still in place or 'not terminated' as they can not terminate under a faulty DN, hence the ruling they just need to serve a valid DN.

 

So the situation you are in is simple (in my small mind anyway!!)- The new owner has bought a live contract and you are liable for the whole amount.

 

I might be wrong, but as I tell the girlfriend its very very rare!! ha ;)

 

I definitely would not go to court as the claimant under ANY circumstance, and would not go as the defendant with a DN as my defence. Seriously you will lose. That is in the same realm as 'i didn't sign as it was online' and 'they have my address spelt wrong'. Forget it.

 

You would be better working out a payment plan if your hard up and they have a valid agreement. If they still take you to court because you don't offer what they want, you will only pay what you can afford (the system will protect you) and they can go whistle for their ridiculous demands!!

 

Good luck!

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I am sorry but i have to take issue with the above as it is highly misleading.

 

I strongly disagree with the above in regards to going to court with the faulty DN - and the statement that the OP would lose. I am afraid that is just not correct - a Court cannot enforce an agreement on the back of a faulty DN.

 

A faulty DN is a bar to enforcement. This has now been decided on in both the High Court and the Court of Appeal and is binding on the lower Courts.

 

Charlie - if you are being taken to court the faulty DN is a defence in itself, and i know of counsel that has stated that as a compliant DN is statutory requirement - a faulty DN is a statutory failure and so a statutory judgement can be applied for.

 

I would suggest to you if a case is pending that you simply use the faulty DN - backed up by case law - as a defence.

 

The Creditor can off course issue a compliant DN and re-issue the claim - but will they?

 

You say the agreement has been sold - have you ever recieved a compliant Notice of Assignment?

Also have you ever made a formal CCA request to the new owners of the agreement?

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Maybe 'you will lose' was a bit definitive!

 

However you won't be better off. They will leave court, issue a valid one and then they can enforce the agreement and the courts can as well (therefore effectively losing!)

 

I agree there is an argument for the DN but the courts are just telling the creditors to issue a valid one before the court can enforce

 

So i am not sure why you would send a person to court on the back of an argument that can be simply rectified and put them back to square one?

 

It would be better to see to be trying to pay a nominal amount (if there is a valid agreement) so when it ends up in court the judge will be somewhat more empathetic?

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Alloyz1

 

Is it as simple as the creditor issuing a new DN? I think that that is where the problem is. They have to be sure that the new DN is compliant in every respect including amount to rectify. If it was as simple as issuing a new DN, why didn't Amex issue one? Why did they try the section 76 route instead?

 

Alan

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I agree it has to be compliant in every respect but surely they can work out what is compliant and issue it (as far as the statutary requirements are concerned)

 

The OP hasn't mentioned why the DN was invalid but from the first post they mention time scales and not figures, so I imagine its all about the structure of the document as opposed to the detail in the figures.

 

s76 assumes there is a valid agreement. Trying to enforce that without one would be futile. OP has not mentioned staus of the agreement i.e. valid invalid lost etc

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Alloyz

 

I agree that the OP said that the DN was invalid due to time scales. The account was subsequently sold to a DCA. So who issues the new DN? If the DCA, then they have to prove that they have a right to collect. They would also need to stipulate what clause of the agreement had been breached. Who calculates what is now owing on the DN - remember a certain amount of time has elapsed since the original DN. I would suggest that it would only have been the full amount that either the OC or DCA would have been demanding, so I would guess that they have not issued any arrears statements since they issued the DN, any claim for arrears on the new DN must take this into account. Dont forget that they are not allowed to include interest payments, unless arrears notices have been sent on a regular basis.

 

They have had 34 years in which to issue a compliant DN, and very few manage it. If they cannot get a simple thing like giving you enough time to comply to the DN, what makes you think they will get everything else right in the re-issued one?

 

My OH has a CC account on which an invalid DN was issued. That account was subsequently sold to a DCA. It was never subject to court action, but we informed both the DCA and the OC that the DN was invalid on several points. Although the OC originally stated that they believed the DN to be valid, they still bought the account back, and subsequently agreed that the DN was faulty. They have threatened to issue a new DN, but they still havent done it two years later, and have also removed the defaults from my OH's credit file. As I have said, I do not think it is always as easy as supplying a new DN.

 

Alan

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Good points Alan

 

If it works for some, great.

 

Maybe I have simplified the process a bit too much, but if they have all the info, it would be straight forward . I wouldn't want to rely on it though, thats my own opinion.

 

If all the OP has is a DN thats invalid, they have no option but to defend on that, however I would personally look for something a little more, cut and dry rather than a 'can they cant they' situation.

 

Thanks

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Alloyz1

 

I agree with you inasmuch as if the OC had issued the invalid DN shortly before any court claim, then it is only a matter of ironing out the faults, and carrying on with the case. Where I think it does get a little cloudier, is when the account is sold and a certain amount of time has elapsed.

 

I am still not sure about a live agreement being sold to a DCA. I know that for example Goldfish sold their accounts to Barclays. I have no issue with that because Barclaycard can continue to issue credit cards the agreement remains substantially the same. However although DCA's hold credit licences, how many are in a position to issue credit cards? If the DCA issues a new DN, and the breach is addressed by the debtor, then the debtor is supposed to be put in the position of "as if the breach had never occured". Yet they cannot put you back in that position, because the agreement you have with them is flawed insofar as they cannot issue a credit card. The agreement states it is a credit card agreement, how can that still be valid if the DCA cannot issue credit cards? I agree the DCA owns the debt.

 

Alan

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I have CC account that was sold to a DCA before expiry of the DN and a letter from the OC received recently returning some charges and in that letter it states the account is closed,how can they issue another DN 2 years later when the account has been sold and in their words closed?

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But they would not need to issue a card, they would just be assigned the benefit of the agreement. Under the agreement they can withdraw any credit facility, whenever they like!

 

So they would cancel the card, keep taking/ asking for the minimum payment or execute s76 and give notice they would like the full amount..... please!!

 

They would only be interested in profiting on the small amount they paid for the debt........

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I have CC account that was sold to a DCA before expiry of the DN and a letter from the OC received recently returning some charges and in that letter it states the account is closed,how can they issue another DN 2 years later when the account has been sold and in their words closed?

 

Because they issued a faulty DN the agreement was never terminated (it cant be under a faulty DN) so they sold it 'live'. The new owner could issue a valid one though.

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Because they issued a faulty DN the agreement was never terminated (it cant be under a faulty DN) so they sold it 'live'. The new owner could issue a valid one though.

 

If the debt purchaser instigates court action could you simply keep quiet regarding your faulty DN, spring it on them at the last moment backed by relevant case law and then let them issue again. At least you would be making life difficult! Or am I completely of track here!

 

A quick question; if a debt has been sold, should unfair charges, PPI etc be claimed from the OC or purchaser?

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If all the OP has is a DN thats invalid, they have no option but to defend on that, however I would personally look for something a little more, cut and dry rather than a 'can they cant they' situation.

 

Have to agree on this point to a degree - but there is not a 'can they can't they' situation, as far as the DN is concerned, - it's a simple they can't.

 

Not all DCA's will want to issue a new compliant DN and go back to Court.

 

Would agree that it would be better to have other arguements to use in defence, such as non compliance with a CCA request, invalid NOA, or problems with the agreement itself, (have they supplied a signed copy - is it a multiple agreement etc).

 

Then there is also the possibility of claiming back PPI and charges etc. making it uneconomical for the creditor to pursue. However the OP has asked a specific question on the DN.

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