Unenforceable agreements under the Consumer Credit Act

[prophetdealer]

Only as heresay evidence with sufficient proof which has always been the position - the judgment has not altered that position. In practice a copy of the signed original agreement will still be required though some LIPs may not be able to argue that point adequately

 

From a purely s78 request POV a reconstituted agrement is fine. However if it an issued case that disclosure would allow you to see the document, however if your basis is on that of non complaince of s78 then the document they produce would be relevant.

 

Consumer (Cancellation and Notice) regulation 3 (if i remember) allows a lender to omit the signature bow of the creditor and debtor.

 

I do agree that it would then be down to a form/substance arguement regarding the T&Cs the creditor produced.

[prophetdealer]

This is extremely misleading. Reconstitution applies to s. 78 only. Onlybsight of the original agreement normally would be able to provide confirmation that the prescribed terms were contained and signed by debtor. Anything else is hearsay evidence

 

 

Though I would assume your advice is what the creditors would like to be the case for obvious reasons

 

Please elaborate for obvious reasons.

 

Additionaly that was the Claimants argument in the Manchester case that they would need to see the agreement. But the judge stated that the mere fact that only 12 days is given suggests that only a reconstituted copy is needed. Plus I do agree (especially with Barclays where they only produce updated T&Cs) that the original T&Cs should be produced containing the prescribed terms that were they at the time the agreement was signed (Conniff v Barclays)

[prophetdealer]

As I said I'll say sorry, just wary of caggers who appear from nowhere give advice and disappear

 

 

I will not disapear, apart from during the week while at work. But you might say that I do this for a living. So all im giving is opinion

[Scrapper]

I will not disapear, apart from during the week while at work. But you might say that I do this for a living. So all im giving is opinion

 

 

I do apologise, but you can understand my concerns as we get people popping in and giving misleading advice (Not saying you are) never to heard from again.

 

And it usually happens after some ruling or another which leads me to think the worst of people

 

Once again I'll apologise

 

Scrapper Coco

[prophetdealer]

I do apologise, but you can understand my concerns as we get people popping in and giving misleading advice (Not saying you are) never to heard from again.

 

And it usually happens after some ruling or another which leads me to think the worst of people

 

Once again I'll apologise

 

Scrapper Coco

 

 

To be honest I dd not know this forum existed till today and I am just spreading my current knowledge.

 

I accept your apology.

[Josie8]

Please elaborate for obvious reasons.

 

Additionaly that was the Claimants argument in the Manchester case that they would need to see the agreement. But the judge stated that the mere fact that only 12 days is given suggests that only a reconstituted copy is needed. Plus I do agree (especially with Barclays where they only produce updated T&Cs) that the original T&Cs should be produced containing the prescribed terms that were they at the time the agreement was signed (Conniff v Barclays)

 

 

The reconstitution decision relates purely to s.78 requests.

 

Reference was made in the judgment that the creditor has to provide evidence that a document containing all the Prescribed Terms WAS signed by the debtor before an enforcement order could be made. In the judgment it is clear that it will be down to the facts of each case as to whether in a credit card agreement the Precribed Terms were contained or embodied.

 

In the event of a signed agreement not being produced then it would be down to heresay evidence which if challenged corrrectly should not provide comfort to the creditor.

 

The reconstituted documents provided under a s.78 request may well not be able to satisfy the court as to where within the original documentation the Prescribed Terms were i.e whether they were contained or embodied for enforcement purposes.

 

In answer to you PM I meant that it would suit the purposes of creditors who do not have compliant credit agreements for the average person to believe that they can enforce an agreement by means of a s.78 reconstituted copy as a matter of course.

[captain2]

The CCA 74 as statute law cannot be eroded to the point of irrelevance by ANY court - if the agreement is produced with a signature from both parties and prescribed terms are there it is enforecable - if they are not it isn't.

 

However as a court's interpretation of statutes and any statutory instrument refinements may affect the original act does the recent Manchester ruling allow where there is no orginal agreement for the court to enforce an agreement ? In my case I have all the signed copy agreements except for HSBC. So as far as I am concerned these agreements are defective so 2 scenarios may be possible -

 

in the case of HSBC as no signed agreement can be found can the court enforce where there is a only a reconstituted one ? I would have thought 'no' as it is not compliant with the CCA. But in allowing a creditor to present a reconstituted agreement to then enforce where no other can be found or exists would imply that there is much evidence that this is what the creditor would have issued using evidence from its files and copy agreements with others from that time which indicate the format it would have adopted.

 

BUT that if for example evidence from other debtors can be gathered showing that the same creditor had IN FACT issued defective agreements from that time in question this would undermine that creditors argument that the reconsituted agreement was what it was in the habit of issuing.

 

Thus in my own case the HSBC situation may be the only 'worrying' one

to me. The other agreements which HAVE been sent to me by the creditors are defective thus in this case I dont think it could be possible that a reconstituted agreement would take precedence. If it did this would go to the root of all contract law and turn it on its head for every contract case and would also give unfair weight to a creditor -

 

What is also at the core of these agreements which so far has been lacking in just about every case I have ever seen is that when sigining an agreement you are AGREEING to borrow and pay back the money within a set of 'agreed' terms which could be read prior to signing the agreement.

 

The most important terms being the frequency of payments and the rate of interest. If the rate of interest is stated at say 1.29 % per month while base rates are say 6% per annum then a 'margin' over base is established which becomes a 'representation' of the rate you then agree to and which then becomes a term of the contract. This then becomes a term of the contract at that rate as it was what led you to sign the agreement.

 

Thus any vague references to allowing the rates to vary against the interest of the debtor must be regarded as unfair and thus in common law unenforceable and also perhaps a misrepresentation under that act of '67. So if for example it then ensues that base rates decline to 0.5 then it is probably fair to assume that the margin broadly declines with it and does not go up as all credit card rates have in recent years.

 

Thus any credit card balance currently standing which as been carried forward for say 6 years probably has been arrived at by unfair/unauthorised interest rates hikes. In simple terms to illustrate the point - Paying every thousand pounds per annum at say 10 per cent interest is £1000 - over 6 years £6000 would be paid. If for example the rate has gone up to 25 per cent the rate would be £2500 thus as an illustration only there is an overpayment of some £1500 per annum or £9000 in total. In other words the debtor has already paid off the balance !

 

It is this that annoys me and appears to be completely immoral - being forced into paying many times more than that originally agreed to - especially where financisal hardship has been caused as a result.

 

That a credit card company can lend more and more to desparate borrowers and thwn once imprisoned in that debt then increase the interest rates. This is more immoral than seeking ways of not paying them back ! It is irresponsible lending and then once trapped the courts are upholding it by not seeing through the creditor's [problem]. The slack execution of agreements was one way of redressing this grossly unfair imbalance.

[prophetdealer]

The reconstitution decision relates purely to s.78 requests.

 

Reference was made in the judgment that the creditor has to provide evidence that a document containing all the Prescribed Terms WAS signed by the debtor before an enforcement order could be made. In the judgment it is clear that it will be down to the facts of each case as to whether in a credit card agreement the Precribed Terms were contained or embodied.

 

In the event of a signed agreement not being produced then it would be down to heresay evidence which if challenged corrrectly should not provide comfort to the creditor.

 

The reconstituted documents provided under a s.78 request may well not be able to satisfy the court as to where within the original documentation the Prescribed Terms were i.e whether they were contained or embodied for enforcement purposes.

 

In answer to you PM I meant that it would suit the purposes of creditors who do not have compliant credit agreements for the average person to believe that they can enforce an agreement by means of a s.78 reconstituted copy as a matter of course.

 

Hence why it would be down to form/substance etc. And subjective to that particular case. However, you would need to have a bloody good witness statement to say that the T&Cs provided under a s78 request were not the ones they originally had.

 

In response to whether the prescribed terms were contained it is my experience that in disclosure they produce the real copy as they have more time find the document. However this boads well for the claimant solicitors (assuming they brought the claim after the request was received) as they would more than likely then be able to get some nice lovely costs, which is always good.

 

However the original embodiment argument only being in one document has pretty much been quashed due to Carey (where it was a 9page pull out thing) so good interesting times ahead.

[prophetdealer]

The CCA 74 as statute law cannot be eroded to the point of irrelevance by ANY court - if the agreement is produced with a signature from both parties and prescribed terms are there it is enforecable - if they are not it isn't.

 

However as a court's interpretation of statutes and any statutory instrument refinements may affect the original act does the recent Manchester ruling allow where there is no orginal agreement for the court to enforce an agreement ? In my case I have all the signed copy agreements except for HSBC. So as far as I am concerned these agreements are defective so 2 scenarios may be possible -

 

in the case of HSBC as no signed agreement can be found can the court enforce where there is a only a reconstituted one ? I would have thought 'no' as it is not compliant with the CCA. But in allowing a creditor to present a reconstituted agreement to then enforce where no other can be found or exists would imply that there is much evidence that this is what the creditor would have issued using evidence from its files and copy agreements with others from that time which indicate the format it would have adopted.

 

BUT that if for example evidence from other debtors can be gathered showing that the same creditor had IN FACT issued defective agreements from that time in question this would undermine that creditors argument that the reconsituted agreement was what it was in the habit of issuing.

 

Thus in my own case the HSBC situation may be the only 'worrying' one

to me. The other agreements which HAVE been sent to me by the creditors are defective thus in this case I dont think it could be possible that a reconstituted agreement would take precedence. If it did this would go to the root of all contract law and turn it on its head for every contract case and would also give unfair weight to a creditor -

 

What is also at the core of these agreements which so far has been lacking in just about every case I have ever seen is that when sigining an agreement you are AGREEING to borrow and pay back the money within a set of 'agreed' terms which could be read prior to signing the agreement.

 

The most important terms being the frequency of payments and the rate of interest. If the rate of interest is stated at say 1.29 % per month while base rates are say 6% per annum then a 'margin' over base is established which becomes a 'representation' of the rate you then agree to and which then becomes a term of the contract. This then becomes a term of the contract at that rate as it was what led you to sign the agreement.

 

Thus any vague references to allowing the rates to vary against the interest of the debtor must be regarded as unfair and thus in common law unenforceable and also perhaps a misrepresentation under that act of '67. So if for example it then ensues that base rates decline to 0.5 then it is probably fair to assume that the margin broadly declines with it and does not go up as all credit card rates have in recent years.

 

Thus any credit card balance currently standing which as been carried forward for say 6 years probably has been arrived at by unfair/unauthorised interest rates hikes. In simple terms to illustrate the point - Paying every thousand pounds per annum at say 10 per cent interest is £1000 - over 6 years £6000 would be paid. If for example the rate has gone up to 25 per cent the rate would be £2500 thus as an illustration only there is an overpayment of some £1500 per annum or £9000 in total. In other words the debtor has already paid off the balance !

 

It is this that annoys me and appears to be completely immoral - being forced into paying many times more than that originally agreed to - especially where financisal hardship has been caused as a result.

 

That a credit card company can lend more and more to desparate borrowers and thwn once imprisoned in that debt then increase the interest rates. This is more immoral than seeking ways of not paying them back ! It is irresponsible lending and then once trapped the courts are upholding it by not seeing through the creditor's [problem]. The slack execution of agreements was one way of redressing this grossly unfair imbalance.

 

 

If you have received all the documents then a reconstitute one wont take precedent as you already have the originals.

 

If all they supply is a reconstituted version then aslong as they state this on the covering letter then that is compliant for s78 purposes.

 

In reference to paragraph 8, if within the Agreement it states that they can vary then it is contractually binding. One thing I would point out is that you state misrepresentation which would have the effect of breach of contract which is a completely different scenario to 'unenforceability' is in a breach of contract the Court would seek to put the parties back in there original position just after signing the agreement. So you would be back to square one essentially.

 

Unenforceability is a random area of law, as it does not void the agreement as the contract still exists it is just that the creditor would not a Court Order in order to enforce the agreement.

 

If they produce a signed application form, T&Cs which contain all the prescribed terms which is deemed to have embodied the original agreement you signed then that is enforceable and hence the creditor is entitled to collect on payment.

 

PD

[captain2]

Hi thanks for that info -

 

Misrep back to square one would be fine as that way the interest rate would be what was agreed to and any current balances be recalculated to refelct what should have been the true sum outstanding under that rate -

 

Seems the weak link now is the T&C's not being within the 'signature document' before it was assumed that the T&C's had to be within a signature document ? In order that T&C's outside signature doc can be included reference should be made to that ? i.e. see section 22 etc ?

 

I understand that the prescribed terms are always to be within the signature document ?

 

Or - has Manchester ruling altered this ?

[prophetdealer]

Hi thanks for that info -

 

Misrep back to square one would be fine as that way the interest rate would be what was agreed to and any current balances be recalculated to refelct what should have been the true sum outstanding under that rate -

 

Seems the weak link now is the T&C's not being within the 'signature document' before it was assumed that the T&C's had to be within a signature document ? In order that T&C's outside signature doc can be included reference should be made to that ? i.e. see section 22 etc ?

 

I understand that the prescribed terms are always to be within the signature document ?

 

Or - has Manchester ruling altered this ?

 

 

Also, if your put back to square one then all monies you have used would have to repaid. Hence the not very pretty option of it.

 

Without seeing what you have I will give you an example.

 

You are given 3 sheets of paper, one which is the application which usually has no T&Cs on it. Hence why the next two bits of paper are important, if they contain the prescribed terms then it is enforceable. However, it is the meaning of embodied which was within the Manchester Court. This is no longer reduced to one bit of paper i.e T&Cs photocopied on the back, hence one document) the T&Cs can be within a separate document and still be part of the application form and then be enforceable. Alot of the times they simply say on the reverse, so by analogy it would only mean one piece of paper, if they say on the T&Cs it will hard to say they were not the originals etc.

 

Bearing in mind that they may not have photocopied the agreement so it is on one document even if they were meant to be.

 

PD

[captain2]

Hi again thanks for your comments - as noted before if put back to square one and sums borrowed are to be repaid that will come off the sum already paid e.g. borrow £10k at 1.29 per month = £1548 interest x 10 years = £15480 but if in fact actually paid under increasingly high interest rates again as illustration only at double that rate = £30,960. Thus overpaid sum thus = £15480 current balance say £12000 then refund of £3480 would be due.

 

This argument would esp be of benefit work where the term is 6 years i dont know whether under a running account whether the 6 year statute of limitation would apply ? If it did not then if you can go back further so much the better.

 

However I appreciate it would require a copy of every statement to track the interest rises and a good computer programme to work out the cost - but then any bank or accountants computer should be able to do that - if you are a barrister or solicitor you may advise as to whether this sort of argument may succeed and where can the specialist lawyers be found or has it not been tried yet ?

 

Thanks.

[newbloke]

with regard to applications, these are precontractual and satisfy sec 51 which is part 4 of the act, and void by sec 59 as they puport to bind the applicant but not the creditor, sec 60 refers to signing of agreement and is part 5 of the act, further more all companies are in breach of sec 85, as as far as im aware not one creditor issued modifying agreements in relation to default charges (£12) which were introdeuced by the oft in 2006, nor did they with relation to increased or amended credit limits and ever increasing interest rates where the general trend was a reducing one, because of this under sec 85 they have a duty to supply the original agreement on the issue of new cards, also where an agreement has been modified, copy document regs dont apply to sec 78 as specified in si 1983/1557 11g. this has been overlooked by many people and is a vital part of the act

[prophetdealer]

Hi again thanks for your comments - as noted before if put back to square one and sums borrowed are to be repaid that will come off the sum already paid e.g. borrow £10k at 1.29 per month = £1548 interest x 10 years = £15480 but if in fact actually paid under increasingly high interest rates again as illustration only at double that rate = £30,960. Thus overpaid sum thus = £15480 current balance say £12000 then refund of £3480 would be due.

 

This argument would esp be of benefit work where the term is 6 years i dont know whether under a running account whether the 6 year statute of limitation would apply ? If it did not then if you can go back further so much the better.

 

However I appreciate it would require a copy of every statement to track the interest rises and a good computer programme to work out the cost - but then any bank or accountants computer should be able to do that - if you are a barrister or solicitor you may advise as to whether this sort of argument may succeed and where can the specialist lawyers be found or has it not been tried yet ?

 

Thanks.

 

 

I relation to the mathematical calculations you would need to take into account the amount owed as stated on your arrears statement. (Assuming you stopped payments) As in all honestly creditors computer systems are extremely good. However, whether or not you have a valid claim would not be for me to say. Could I confirm whether this is a credit card or loan as this will have a great affect on the rates for example.

 

Additionally, I would be very sceptacle about using possible future sums as this is rather speculative and i dont think the Court would look favourably, even if it is a legitimate argument.

 

 

 

Cheers

[caro]

Don;t know if I'm missing something, but prophetdealer just seems to have appeared from nowhere offering advice and has no threads of their own.

 

I smell a rat in the kitchen trying to mislead and misdirect.

 

I'll so sorry now if I'm wrong, but seems strange to me

 

??????????????

 

Scrapper Coco

 

An understandable concern when a newby appears and starts asking people to message them, even in their very first post.

 

To be honest I dd not know this forum existed till today and I am just spreading my current knowledge.

 

I accept your apology.

 

Before posting further please note site rules linked here. http://www.consumeractiongroup.co.uk/forum/forum-rules-please-read/9-forum-rules-please-read.html#post16

 

CAG welcomes posts from concerned individuals, including those with specialist knowledge, but have found some unscrupulous people have touted caggers for business. I've temporarily unapproved some of your posts to remove requests for PMs.

[captain2]

Hi Newbloke - very interesting info - would be useful to get all this points into one template letter -

[Peterbard]

hi

A point o have raised many times on her and has just been affirmed in the manchester judgement.

The prescribed terms must be contained within the agreement document as per 61(a)

The rest of the terms can be embodied elswhere and referred to in the agreement.61(b)

 

Peter

[Peterbard]

Hi Josi

i find a few of the items onthis thread a bit missleading i am glad youare here to keep an eye out,

It would be easy for creditors to mix in a llittle ciorrect knosledge with missleading stuff in there interests its happened before i am sure you can cope.

Best

[captain2]

Hi anyone there who knows whether the Manchester judgement is being appealed ?

 

As I understand it after reading the full judgement if the creditor can demonstrate that their procedure is always to require a signed agreement before the account is finalised then a reconstituted agreement would suffice for enforcement by the court as the judge has said it can be enforced if the agreement WAS signed - and the agreement would be deemed to have been signed if the creditor can demonstrate presumably on a balance of probabilities that it WAS signed.

 

 

To have the law changed in this way to then allow a reconstituted agreement to be used for enforecement in certain circumstances seems a contravention of the CCA Act -

[newbloke]

hi all, re the manchester judgement, a creditor can satisfy sec 78 without an agreement that is signed, however where an agreement has been varied, as they all have, then they have to reconstruct the original agreement, including your name and adress at the time the original agreement was taken out, however should they wish to enforce in court, they still need the original signed compliant agreement.see link below

BBC News - Banks win partial High Court victory on credit cards

[captain2]

Hi NB thanks for the help - but the judgement stated an agreement could be enforceable in the absence of a signature if the creditors procedures indicated that it would have been signed as part of the process to set up the account -

 

In my own case I have around 7 accounts where I already have copy agreements which I have signed so they are beyond doubt and it looks as though the prescribed terms are stated incorrectly or are missing -

 

I have 2 accounts where i know the agreements have been destroyed by the creditor -

 

The 7 I have are thus incapable of being replaced by reconstituted agreements and this leaves the 2 I dont have of possibly under this agreement (or probabay if its right ) capable of being reconstituted and even though a signed copy is no longer available the court then using the creditors procedures to hold it WAS signed on the grounds it would have only been processed in the first place if it was signed.

[newbloke]

But he confirmed that if a lender could not supply a copy of the loan agreement, then this automatically prevented them from using the courts to chase a debt until such time as they could come up with a copy.

that is what the judge says, his judgement means that people using claims companies can no longer go to court after 12 days following a sec 78 request claiming unenforceabilty, however if a creditor is to persue you to court,he has to supply an signed original compliant agreement

[captain2]

Ok thats good - thank you very much -

[Kerrigp]

Hi

 

First post so bear with me, I think this site is great but i need a bit of additional advice. I have carried out the request for a copy of my credit agreement from Barclay Card and have received information which i can not make head nor tale of. if someone could have a quick look at the attached files and see what they think I would be eternally grateful.

 

Thanks Paul

 

Sorry about the quality

[Kerrigp]

Sorry doesn't seem to have uploaded attachments