Ingenious excuse for no CCA supply

[Varuna]

I made a standard CCA application of Santander in respect of a current account,

originally with Alliance Leicester following an online application in 2006.

 

I got a fairly prompt response returning my £1.00 and making the following comment:

 

" ... we have now completed a search of our systems and can confirm that this account was not regulated by the Consumer Credit Act

and therefore does not have a credit agreement. ... "

 

As a further check I then made an SAR for everything relevant.

After an inordinate delay Santander sent me maybe a dozen pages of copy statements

saying that that was all they were obliged to provide.

 

I spent an interesting two or three months arguing with them,

being told that that really was all required,

that they hadn't had my application,

that they had had my applicatin

but I needed to repeat it and enclose anoher £10,

that I hadn't included a cheque,

and more such nonsense so

 

I made a complaint to the Information Commissioner as I'd already threatenend.

 

This eventually produced a thick wad of stuff and a letter saying that as a matter of goodwill

they were making this so-called second supply available to me free of charge!

 

Clearly I then searched the bundle very carefully and there is indeed no sign of any agreement

although copies of both my original CCA request and the bank's response are included.

 

I've earlier told Santander that we're in dispute

- this is mainly around unreasonable charges (such as £140 for exceeding the agreed OD by around £3)

but also issues around their management of the account and ignoring letters, instructions and the like

 

- but although they initially paid no attention to that,

bringing in their own tame debt collectors (Moorcroft)

and flooding me with letters demanding full repayment of an inappropriate sum,

at least they've now quietened down.

 

Is there any validity whatever in the claim that such an account would not have been regulated as they claim?

And presumably with a copy of the agreement they are, at least for the moment,

stuffed both as regards enforcement and negative reporting.

 

Thanks.

Edited August 20, 2014 by citizenB
spacing

[theoldrouge]

you can make a cca request for an overdraft but you would only get a statement of account and a facility letter,

outlining the terms of the overdraft. They are regulated but exempt from Part V of the CCA - which outlines the form and content of credit agreements

[AndyOrch]

I think you need to research and read a few more threads on the difference between Overdrafts and Credit Cards/Loans Varuna.

 

Regards

 

Andy

[Varuna]

you can make a cca request for an overdraft but you would only get a statement of account and a facility letter,

outlining the terms of the overdraft. They are regulated but exempt from Part V of the CCA - which outlines the form and content of credit agreements

 

Thanks, and thanks also to andyorch. I'd forgotten that distinction but I've now worked through chunks of the 1974 Act, specifically sections 74 and 78, the CCA 2006, being aggregated amendments to the 1974 Act, and read in detail the CAG thread CCAs and overdrafts. As you say OD agreements are indeed regulated, contrary to Santander's claims both that they're not and that there is no credit agreement [needed implied, I suppose]. It follows that although Part V, Entry into Credit or Hire Agreements, does not apply as it does to any other agreements Part VI and specifically section 78, Duty to give information to debtor under running-account credit agreement, does and therefore Santander is now both in default and has committed an offence [s78, subsection 6]. According to s78, subsection 1, the requirement is to provide a copy of the executed agreement (if any) and information showing the state of the account, the amount payable and the the amounts and due date later payable as appropriate. Although they haven't done this specifically I suppose, however, they might want to argue that they have done this in providing account statements and that's certainly a reasonable position. Nevertheless there does seem a need for there to be some form of agreement for the OD position to be valid and in particular for T&Cs to apply. This might be an online application or a letter confirming the opening of the account, with OD, (the facility letter you mention), or perhaps even an implicit granting of overdraft facilities by allowing payment of a sum or sums which would bring about an overdraft. That is, it seems to me that, both under the terms of the CCA where appropriate and more generally under contract law I need to have agreed to this running-account credit matter and for Santander to enforce any claimed liability the bank needs to show evidence of this. Without necessariy relying on this, it seems that if Santander says, firstly, they're not regulated in this matter and neither need nor have an agreement and, secondly, that the SAR returned nothing relevant in this regard, then perhaps they do indeed have nothing which they can rely on.

[theoldrouge]

s78 applies to credit cards, and the only sanction for non supply is that the account is unenforceable unless or until

 

a compliant reply is received. there is no longer any "offence" for non compliance with a request

[Guest]

varuna

for o/d's before nov 11 there was no requirement for an cca agreement (as was required re a cr cd), if exemption. as said, at best, a cca re an o/d wld result in a statement of account. usually though they just say was exempt, not covered. but, as noted, an o/d can become running a/c credit (see the eg's in the cc act). if they claimed exemption, then they shld show compliance with the oft determination (ie the facility letter). as posed though, wld non compliance with that alone be enough to rely on?

 

for reference, this was the determination

 

THE DETERMINATION:

The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:

"1. Under the powers conferred upon me by s.74(3) and (3A) and s.133 of the Consumer Credit 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.

2. This Determination is made subject to the following conditions:-

(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;

(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded: - of the credit limit, if any, - of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended, - of the procedure for terminating the agreement; and this information shall be confirmed in writing.

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing not later than 7 days after the end of that 3 month period of the annual rate of interest and charges applicable.

3. In this Determination the terms 'creditor' and 'debtor' shall have the meanings assigned to them respectively by Section 189 of [the Act]. The term 'bank' includes the Bank of England and banks within the meaning of the Bankers' Books Evidence Act 1879 as amended."

[Varuna]

s78 applies to credit cards, and the only sanction for non supply is that the account is unenforceable unless or until

 

a compliant reply is received. there is no longer any "offence" for non compliance with a request

 

Again, thanks. I'm aware that s78 applies to credit cards but it appears equally to apply to other relevant debit-credit arrangements, including overdrafts. It may well be that I'm not aware of a change in the Act or associated regulations but I haven't been able to find one and, as I mention earlier, checking the 1974 Act (and the 2006 version, the amendments) seems to make it clear that there is an obligation on the creditor to return the information specified for all running-account credit agreements. As for offence issues, I guess that's a change I've not seen so I'm happy to take your word for that although I've not come across a specific reference. The continuation of the non-enforcability element seems the more important one.

[Varuna]

Thanks. I have seen that determination elsewhere but what I've not seen is the earlier determination, that referred to as having been effected 3/11/83 and then revoked by this one quoted. In the absense of that it's not clear what exactly is being said in his determination: " ... now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank." If his earlier determination had removed the exclusion of ODs (that is, had revoked 74(1)(b)) then one interpretation would be that he's returning that section to the earlier state. Alternatively he may be saying that, contrary to 74(1), ODs are now removed from the exclusion. Lastly, he might be clarifying the issue by restricting the matter to bank granted ODs. Do you know exactly what it is that that new determination brought about? I accept that excluding ODs from Part V, Agreements, means that agreements are not mandatory when an OD is granted but nevertheless there does appear to be a need to specify the terms offered or to be applied and at least in general terms there would also need to be some form of aquiescence on the part of the debtor. You mention "Nov 11" - what year are you talking about there and how did that change come about?

[Guest]

the facility letter, as oldrouge mentions, was meant to satisfy the determination.

2011! EC directive. part V (now, since) incorporates that directive.

[Varuna]

Ah.

 

Assumed '11' was the day, not the year! Sorry.

 

Everything seems clear now (I think).

 

To summarise: ODs are regulated under the CCA;

no obligation to establish a formal agreement for an OD (s74);

there is an obligation to respond to a proper CCA 78 request

but this would be satisfied by returning the acc info current

and the relevant letter agreeing the facility;

failing to respond correctly prevents enforcement until remedied

but would not lead to an offence, as previously.

[Guest]

yes, no formal agreement required prior to '11, exemption was under the then part v, and if exempt the determination was applicable.

for o/d's after '11, an actual agreement now has to be provided re an o/d (now in part v).

as mentioned, at best wld get a statement of a/c (they prob wont have a copy of any facility letter, and prob cldnt show whether one was sent (but the usual being; 'wld've sent one...')). but usual response is exempt, o/ds not covered. although o/d's were and are running a/c credit.

recent'ish case law has said that collection activities (but not court enforcement) can continue even if no response to a cca request.

yes, now no offence.