Old HSBC case taken up by MKDP LLP. When is a Default Rectified?

[colin21958]

Hi,

 

I have now received a court claim in respect of a credit card I used to have with HSBC, which was defaulted back in December 2009. They messed up big time as far as I can tell and eventually sold the account off to MKDP LLP. To summarise, the account was in dispute as they were unable to produce a suitable response to my S78 request, so I stopped paying the monthly payments, telling them I would recommence payments after they had satisfied my S78 request. They sent a copy of an application form and some general terms and conditions. However, they failed to send a copy of the back of the application form which was referred to on the front.

 

 

I sent them dozens of letters requesting this and they just ignored all these requests, stating that they had "done all they were required to do! So, they then defaulted the account on 7th December 2009, however, on 6th January 2010 they took £300 from my current account, this was less than the full arrears at that time, however, on 30th January 2010 they took a further £438 from my account and this covered the missed payments in full. I did write to them objecting to this, however, they ignored my requests for the money to be refunded to me stating that they had a right to do this.

 

 

So, obviously I stopped using my current account with them immediately. My next statement showed no arrears and no default warnings, etc., it just stated the monthly payment for next month. I also noticed subsequently that on my credit file, they had shown the account as satisfied for the months of February and March. Also, no default date was recorded on the file. I assumed therefore that they had accepted the payments they had taken as rectifying the default, albeit the payments were taken after the time deadline of 14 days. However, they did seem to treat the account as if the default had been rectified.

 

Then as I continued to miss payments, as the account was still in dispute, they issued several letters which threatened to issue a default notice, but they never actually did. I have confirmed this with a Subject Data Access Request, in that it shows the default notice issued in December 2009, but no subsequent default notices were issued. Subsequently they cancelled the agreement and demanded repayment in full.

 

 

I then pointed out that their termination of the agreement without issuing a default notice was in breach of the CCA and accepted their termination, I indicated that I accepted that I would owe the arrears, but that interest added after the date of the initial dispute would have to be removed first and the remainder would be deducted from compensation for illegally sharing inaccurate data on my credit file. Obviously they never complied with any of this.

 

 

They eventually, after having many other collection agencies and solicitors involved, sold the account to MKDP. Now MKDP have started a claim against me, even though I have pointed all this out to them. Obviously I am going to defend the case, as I believe that they have terminated the account without a default notice being issued. They of course believe that the one issued in December 2009 was enough,

 

 

I feel that as they treated the default as rectified, then they should have issued another one, in accordance with their threats in at least three subsequent letters. Also, I notice on my credit file that HSBC record the default date as April 2010 (February and March show as OK, whilst April and May, etc., show 1 and 2 months payments missing respectively up to September which shows a default) and MKDP record it as September 2010 and they have only recorded the account from September 2013 (I believe this was when they purchased the account).

 

So my question is for some opinions on the default notice issued in December 2009, as to whether they can rely on that, or whether they should have issued another one, as I believe they should, before terminating the agreement. Thanks in advance for any suggestions.

 

Colin.

Edited December 17, 2013 by Andyorch
Paragraphs added

[AndyOrch]

Hi Colin

 

 

So it basically boils down to what is perceived as compliance to a Section 78 request...you state they are in default ..they state they have complied.

 

 

The fact that a further Default Notice has not been served is cause to defend the claim.

 

 

Regards

 

 

Andy

[The Mould]

Hi Colin

 

 

So it basically boils down to what is perceived as compliance to a Section 78 request...you state they are in default ..they state they have complied.

 

 

The new owner - the assignee, must accept the factual matters of your case, as he takes on all duties/obligations of the original creditor on the assignment of the debt to him.

 

 

The fact that a further Default Notice has not been served is cause to defend the claim.

 

 

Regards

 

 

Andy

 

 

Agreed.

 

 

Further, if the original default has been rectified, then creditor cannot rely upon the same as grounds to enforce the agreement.

[colin21958]

Agreed.

 

 

Further, if the original default has been rectified, then creditor cannot rely upon the same as grounds to enforce the agreement.

 

This is really my question, is the fact that they treated the default as rectified, even though it wasn't rectified within the required timescale, enough to prove that they should have issued another default notice? I feel it is, but they keep insisting that the default wasn't rectified and so they didn't need to issue another one... Thanks,

 

Colin.

[colin21958]

Hi Colin

 

 

So it basically boils down to what is perceived as compliance to a Section 78 request...you state they are in default ..they state they have complied.

 

 

The fact that a further Default Notice has not been served is cause to defend the claim.

 

 

Regards

 

 

Andy

 

Hi Andy,

 

Yes, I realise that the S78 request is nothing to rely on, I really want to know whether the fact that they treated the default notice as rectified in all their actions, would be enough for them to have to issue a further default notice. HSBC took the money from my account (although it was not within the required time to rectify a default), but then they seemed to treat the account as not being in default, the next statement made no mention of default or being behind on payments, etc.. and showed only the normal monthly payment due for the next month. Also, subsequently in my credit file, none of the default dates shown there at any time, either by HSBC, or MKDP show the date of the original default notice as the date of default, they both show much later dates. HSBC also subsequently sent me letters threatening to issue a default notice, but then terminated the account without issuing one!

 

Regards,

 

Colin

[Peterbard]

The problem is that they may consider the payments taken to be part of the demand for full repayment of the balance.

You say that the payments were taken after the remedy period.

In which case they will still be pursuing the remainder (presumably).

 

As you say it depends on if they consider the agreement was terminated after the default, the fact that they seemed to continue to seek the contractual payments would suggest that it wasn't, I presume you received no termination notice.

 

You could contend that the contract was not terminated under common law, in that your breach of the agreement was not accepted (by the issuance of a termination notice)by them i a timely manner and therefore the agreement was not repudiated, and therefore still in force.

 

Incidentally failure to comply with a section 78 request down not place an account in dispute nor does it permit the with-holding of payments on the account.

[colin21958]

The problem is that they may consider the payments taken to be part of the demand for full repayment of the balance.

You say that the payments were taken after the remedy period.

In which case they will still be pursuing the remainder (presumably).

 

As you say it depends on if they consider the agreement was terminated after the default, the fact that they seemed to continue to seek the contractual payments would suggest that it wasn't, I presume you received no termination notice.

 

You could contend that the contract was not terminated under common law, in that your breach of the agreement was not accepted (by the issuance of a termination notice)by them i a timely manner and therefore the agreement was not repudiated, and therefore still in force.

 

No, I received no termination notice until several months later, after they had issued three more letters threatening to issue a default notice. I then received a letter terminating the agreement, but no further default notices were issued.

 

Incidentally failure to comply with a section 78 request down not place an account in dispute nor does it permit the with-holding of payments on the account

 

When did this change? All the threads I read on here before in this respect all indicated that not complying correctly with a s78 request placed the account in dispute, so are there no consequences at all for the creditor in not complying? Does the Act not state that if they do not comply they cannot enforce the agreement?

 

Regards,

 

Colin

[Peterbard]

 

 

When did this change? All the threads I read on here before in this respect all indicated that not complying correctly with a s78 request placed the account in dispute, so are there no consequences at all for the creditor in not complying? Does the Act not state that if they do not comply they cannot enforce the agreement?

 

Regards,

 

Colin

 

It was clarified in Carey, but the situation has always been that the request is for information only, the failure to provide a copy only means that the agreement cannot be enforced in court, it does not mean that the account is in dispute nor that the DN cannot be issued or that the CRA cannot be notified.

 

I am afraid there is very little consequence for the creditor , as you say.

[colin21958]

It was clarified in Carey, but the situation has always been that the request is for information only, the failure to provide a copy only means that the agreement cannot be enforced in court, it does not mean that the account is in dispute nor that the DN cannot be issued or that the CRA cannot be notified.

 

I am afraid there is very little consequence for the creditor , as you say.

 

OK, thanks for clarifying that. The Act even says that if they don't provide the information within a month that they commit a criminal act! But that doesn't seem to make any difference either! They seem to regularly ignore this too!

 

Regards,

 

Colin.

[colin21958]

... the failure to provide a copy only means that the agreement cannot be enforced in court...

 

It also seems that this doesn't apply either! As I have heard of several cases which were heard without a copy, let alone the actual agreement, being produced in court.

[Peterbard]

OK, thanks for clarifying that. The Act even says that if they don't provide the information within a month that they commit a criminal act! But that doesn't seem to make any difference either! They seem to regularly ignore this too!

 

Regards,

 

Colin.

 

This section was repealed by the CPUTR 2008

[AndyOrch]

OK, thanks for clarifying that. The Act even says that if they don't provide the information within a month that they commit a criminal act! But that doesn't seem to make any difference either! They seem to regularly ignore this too!

 

Regards,

 

Colin.

 

 

That also has been revoked

[Peterbard]

It also seems that this doesn't apply either! As I have heard of several cases which were heard without a copy, let alone the actual agreement, being produced in court.

 

They should not be able to enforce without a true copy being presented under section 78. However they only have to manufacture a document which includes the correct info and they have complied.

 

The question of enforcement without the presence of an actual agreement when requested is relevantly new, but you are right it has happened, unfortunately the creditor only has to show that on the balance of probabilities" an agreement was signed, this can be done via witness statements or other evidence.

[Peterbard]

For information from the OFT consultation

 

5.9

Finally, while non-compliance with an information request is no longer a

criminal offence,28 non-compliance with an information request remains a

'domestic infringement' under the Enterprise Act 2002, and enforcement

27In McGuffick , the bank, knowing that, since it had not complied with section 77, it could not

enforce payment of the loan, when writing to the debtor made it clear that it would not be able

to enforce the loan, although they still thought he should pay since the contract was not void. It

also made it clear that any continuing default would be reported to credit reference agencies.

[renegadeimp]

Pre 2007 agreements, theyd need to produce the original in court. Sadly thete are various judges who seem to be oblivious to the rules and allow basic reconstituted agreements in its place.

[Peterbard]

This explains the station regarding pre 2007 agreements

 

2.19

Often consumers and their advisers assume that if a signed copy is not

provided by the creditor or owner, this necessarily means that the

agreement cannot be enforced: either on the basis that section 77(1),

78(1) or 79(1) (as the case may be) has not been complied with, or in

reliance on section 127(3) (in the case of agreements to which that

subsection still applies). This overlooks the fact that there is no

obligation on an information request to provide a copy which includes a

copy of the signature. It also overlooks the fact that section 127(3) does

not apply merely because a signed document is not available at the court

hearing; the section requires that a document containing the prescribed

terms 'was' signed by the debtor or hirer. The creditor or owner may be

able to provide evidence that its practice was always to require a

signature to its agreements and that its agreements always complied

7 [2009] EWHC 3417 (QB).

[colin21958]

In any court action based on a written agreement, it is written in the Civil Procedure Rules that the original agreement should be produced in court, on that basis alone it is unclear why courts allow claims to be instigated without the original agreement! How can a written agreement possibly be enforced when the actual agreement cannot be produced? To say that the creditor only needs to say that they would always have had an agreement and that it would have complied with the rules is ridiculous, especially when you consider that Capital One, in another claim I have dealt with, even went to the extent of creating a document which they said WAS a photocopy of the original document, as I could PROVE that it wasn't, obviously they backed down, however, this proves that people LIE, even when they are doing so for a company that they just work for! Why don't judges take that into account!? They should be made to prove they have the actual document and produce it in court! The fact that they have destroyed the originals and cannot therefore produce it should not be an excuse to let them get away with murder! If they could actually produce the document they would be held to the terms of it, but not producing it, its even better for them, because they can make it all up to suit their purposes! Why can't the justice system understand that!?

 

 

My agreement is pre-2007, why is there a difference for pre-2007 agreements?

[Peterbard]

In any court action based on a written agreement, it is written in the Civil Procedure Rules that the original agreement should be produced in court, on that basis alone it is unclear why courts allow claims to be instigated without the original agreement! How can a written agreement possibly be enforced when the actual agreement cannot be produced? To say that the creditor only needs to say that they would always have had an agreement and that it would have complied with the rules is ridiculous, especially when you consider that Capital One, in another claim I have dealt with, even went to the extent of creating a document which they said WAS a photocopy of the original document, as I could PROVE that it wasn't, obviously they backed down, however, this proves that people LIE, even when they are doing so for a company that they just work for! Why don't judges take that into account!? They should be made to prove they have the actual document and produce it in court! The fact that they have destroyed the originals and cannot therefore produce it should not be an excuse to let them get away with murder! If they could actually produce the document they would be held to the terms of it, but not producing it, its even better for them, because they can make it all up to suit their purposes! Why can't the justice system understand that!?

 

 

My agreement is pre-2007, why is there a difference for pre-2007 agreements?

 

Please indicate where in CPR it states that the agreement must be shown with the claim. As you say it says "should" this has been brought up in various cases by various courts, there is no requirement.

 

I think you will find it does not(sadly)

[colin21958]

Pre 2007 agreements, theyd need to produce the original in court. ...

 

Can you point me to the legislation which supports this statement please? If such legislation exists I would want to be able to use it. Thanks,

 

Regards,

 

Colin.

[colin21958]

Please indicate where in CPR it states that the agreement must be shown with the claim.

 

I think you will find it does not(sadly)

 

No, I know that sadly it does not say "Must", it says "Should"...

[Peterbard]

No, I know that sadly it does not say "Must", it says "Should"...

 

It seems you know the answer to the first part of your question then ?

 

They do not need to produce an agreement whatever the date. If an agreement was pre April 2007, you could not only question the existence of an agreement but also that it was properly executed in terms of 127(3)

[The Mould]

Dear Colin,

If the creditor accepted your late payment in relation to the default that he relies upon, then, such acceptance constitutes affirmation of the contract he relies upon. (research this area of contract law)

Your creditor cannot accept such late payment under the contract and protest at the same time he does not accept the same! (research this principle of law also, one cannot accept a payment & protest at the same time that he does not accept such payment towards the debt claimed!!!!!)

Therefore, based upon the posted facts of this case, your creditor has no grounds to bring an action against you because he accepted your late payment and in doing so, he affirmed the contract, therefore, he has no default to rely upon as regards issuing proceedings against you - this is/or would - in my opinion, be your Defence to any claim issued by your creditor .

Did you continue to make the payments (although late) to your account and, if you did, were such late payments accepted by your creditor?

Kind regards & and a very Happy New Year to you & your family.

Remember this - there is no justice to be granted to any commoner in our land, for the Courts hold no power of water and so such Courts are not the Courts of justice, rather, they are the Courts of man-made laws, and so, you and I and all others must accept that there is no justice in this man-made system of things - the lords are not your lord and we are not free men!

Nonetheless, you, and indeed all others, can rely upon these hypocritical man-made laws, and use the same to your advantage and succeed on your case using the same!

It greaves me deeply to say this, but, you and the entire country of commoners, myself included, must get used to the fact that we will never win our battle against this evil that rules over all of us. We must, though, keep the fight for the truth, freedom, equality & humanity alive - T.R.U.T.O.H – which, in my world means; The Righteous Testament Of The Humam.

If you are not human and the type of person who holds gold, silver, oil, diamonds and other so-called precious materials and money above the life, which no man can build a heart for, then I tell you, you are all already dead! This is not a religious statement and I loathe every government on this earth - you have betrayed my fellow people and such betrayal will not go unpunished.

Kind regards

The Mould

(Penicillin)

[colin21958]

Dear Colin,

If the creditor accepted your late payment in relation to the default that he relies upon, then, such acceptance constitutes affirmation of the contract he relies upon. (research this area of contract law)

Your creditor cannot accept such late payment under the contract and protest at the same time he does not accept the same! (research this principle of law also, one cannot accept a payment & protest at the same time that he does not accept such payment towards the debt claimed!!!!!)

 

Therefore, based upon the posted facts of this case, your creditor has no grounds to bring an action against you because he accepted your late payment and in doing so, he affirmed the contract, therefore, he has no default to rely upon as regards issuing proceedings against you - this is/or would - in my opinion, be your Defence to any claim issued by your creditor .

Did you continue to make the payments (although late) to your account and, if you did, were such late payments accepted by your creditor?

 

 

Thanks for that. It makes sense. No, I didn't make any further payments, but they did keep sending statements asking for the monthly payments. It wasn't until another 7 months had passed that they finally issued a final demand for full payment (without issuing any further default notices).

 

 

Regards and Happy New Year to you and your family...

 

 

Colin.

[colin21958]

I have decided that I intend to defend this action mainly on the basis of the Default Notice not being issued (the one that was issued having been rectified). I think I can successfully defend on this basis as the evidence that they treated the default as rectified and the account continuing for 7 months is overwhelming! They should therefore have issued a further default notice which they never did (and which is confirmed in their letters to me as well as the Creditor's system printouts). I also intend to make a counter claim seeking compensation for damages due to the illegal publishing of personal data since July 2010 (when the account was illegally terminated) under the Data Protection Act 1998. I would appreciate some advice on how to prepare the counter-claim; I assume this needs to be a separate document which is submitted with the defence to their claim? Is there a form for doing this, or should I just type up a claim in a similar manner to the defence. If so, are there any conventions as to layout that I need to comply with? Also, is it necessary to produce all the relevant information in this document, or will that "flow" from my defence of their case? Thanks,

 

Regards,

 

Colin.

[Peterbard]

HI

 

Just reading your initial post, you say you accepted their termination of the contract, is there not a danger that in doing this you ended the agreement yourself, and therefore there was no necessity for a further default notice ?