Barclays Masterloan - Enforceable Recon CCA?

[HSBCandMe]

I have a reconstructed credit agreement from Barclaycard.

It relates to a 'Masterloan' I took out with them in 2003.

It Defaulted 2006, and I have been repaying Barclays on an AP ever since.

It was never re-assigned or sold on.

It contains prescribed terms, states the amount credit; the rate of interest; and the number and amount of repayments to be made.

However:

1. the reconstruction contains no date;

2. it does not contain my address when I took out the loan;

3. the bank’s telephone number is different;

4. there are no cancellation rights in the small print

5. The stated APR is 10.9%.

I have run that past 2 separate websites and they came out with an APR of 10.526%.

However, on another website it appears that with an APR of 10.9% interest would be only £60 out

– so does such a small amount make any difference to the validity of the recon CCA?)

6. I have obtained a SAR from Barclays containing screen shots of thir internal email that says

“This is an old Masterloan and there is no copy on Edostar.”

7. Another internal email that says:

“There was no foa in Edostar we need to reconstruct the agreement.”

8. An internal email that says:

“Need to refer to Legal re CCA issues.

I’m doing the CRA request again at this point,

just looking into the validity of the agreements he has had so don’t make any promises about getting new documentation.”

9. An internal email that says:

“The information is correct…

The Masterloan was for £15k, drawn on X 2003 and £4,236 interest was immediately applied.

This was apparently common practice for this type of loan.

 

When the loan went to recoveries at Barclaycard,

we believe the proportion of interest which did not apply

– i.e. the amount relevant to the loan after the date the loan was charged off

– should have been refunded.

Looking at the entries to the Masterloan this was not done.

 

Whilst there is no PPI premium to refund or any issue of a mis-sell,

it would appear there will have to be some refund of interest.

The exact amount will need to be calculated at the 10.9% rate….

The reconstructed credit agreement is therefore correct as per the s.77 request.”

10. An internal email that says:

“What do we normally send for Masterloans where the original document is not available...

At this moment this could result in us having to write-off the balance.”

11. An internal email that says:

“Interest does not appear to have been refunded when the loan went to recoveries at Barclaycard, calculate amount due and apply.”

12. An internal email that says:

“as a refinance arrangement,

this agreement was exclusively conducted by post and phone,

in which case no cancellation rights would have applied at that time.

 

There is no cancellation rights in the agreement because there would not have been any cancellation rights in this case.

Our refinance loans have always been transacted either at branch offices or totally through the post following telephone conversations."

13. A letter from Barclays stating:

"At the time this agreement was entered into, there would have been no cancellation rights applicable in either of these circumstances.

We therefore consider that the copy agreement we sent to you in response to your s.77 request contains all the relevant terms,

complies with all requirements applicable at the time the agreement was entered into and is therefore a true copy for the purposes of s77.

Our agreement with you is therefore legally enforceable.”

I do not have a copy of the original agreement.

But I do recall how I applied for it – by post.

The loan offer came in the post as promotional ‘cheque’ drawn out to me, which I had to return to Barclaycard in the post.

When I complained some years after the Default,

they re-scheduled the debt with approx. £4,356 interest they charged up-front being taken off the debt.

 

My original loan was £15k plus £4,356 interest (£19,356 in total payable in monthly £322 over 5 years).

The balance is now approx.. £5,000 and on an AP. 

 

I started a thread on MSE about this,

but I'm not 100% convinced what I was told there is quite right? 

 

 I may be wrong and would really value input from the CAG. 

 

My thread and the replies to it are at https://forums.moneysavingexpert.com/showthread.php?t=5973956  

If they are right and I have absolutely no leg to stand on with Barclays,

its probably best I know it before I even begin taking them on. 

I would welcome a second opinion.

 

[HSBCandMe]

Reading that, I surmise I'm screwed then? It does seem odd that a bank need not retain copies of a financial contract and have such flexibility in what they can reconstruct.

In my instance, I was hoping that the absence of a cancellation clause applicable to the executed agreement in their recon CCA might, perhaps, have given me some leverage.  However, reading the bank's internal emails (quoted in bold, above) their legal team advise that because no such clause was used in 2003, for that type of loan, they therefore have a legally binding contract.  However, how could I or any consumer for that matter, know if what they are saying is accurate in that regard?

 

Edited March 8, 2019 by HSBCandMe

[HSBCandMe]

The address on the recon is not the one I was living at when I took out the loan.

it was an earlier - and also - later address.

 

The loan was taken out through the post.

I received a mock-up 'cheque' for £15K made out to me in a marketing promotion that came with my Barclaycard statement.

It had to be sent back to them. 

 

The contract was posted out and returned.

that's all i remember and back then I didn't keep copies of everything. 

 

There was no face to face and no telephone aspect whatsoever. 

However, it was back in 2003 ...

 

However, unenforceable is not irredeemably unenforceable gather, so they could reconstitute another CCA with the address I used at that time, surely?

 

Also, presumably the burden if proof is on me to prove it was taken out through the post?

 

[HSBCandMe]

Wow, hang on, that's kind of a big thing. 

I have a letter from the bank's legal team stating the recon CCA is legally enforceable.

 

Can you point me in the right direction to find the legal basis for the pre-2007 CCA rule?  

 

Also, is it true that if I stop payments to Barclaycard there is little they can do to enforce, because the debt was formally Defaulted in 2006 and although I have paid them on a DMP these past 16 years, after all this time court action would be unlikely given that more than 6 years having elapsed since the cause of action?

[HSBCandMe]

Here’s a copy of the recon CCA. 

Unsigned (obviously), undated, no apparent cancellation clause? 

Is it irredeemably unenforceable? 

Would I have a defence if the bank go for a judgement? 

 

Particularly, is the banks letter to me correct? They wrote: 

 

“At the time this agreement was entered into, there would have been no cancellation rights applicable in either of these circumstances. We therefore consider that the copy agreement we sent to you in response to your s.77 request contains all the relevant terms, complies with all requirements applicable at the time the agreement was entered into and is therefore a true copy for the purposes of s77. Our agreement with you is therefore legally enforceable.” 

 

CCA anon.pdf

Edited March 30, 2019 by HSBCandMe

[HSBCandMe]

Thank you for your replies. I would like to say I have found CAG more knowledgeable, helpful and much, much less judgemental than MSE. I now have a clearer idea of where I stand when corresponding with Sharkleys. 

 

Just one question:  can Barclays reconstitute a pre-2007 CCA?? 

[HSBCandMe]

The problem is that they have reconstructed it and sadly, I do not have a copy of the original.

You stated above that it is enforceable.

 

Do you mean enforceable for the CCA or enforceable in court? 

If the latter, my options are either to pay it off ASAP as per MSE advice,

or else to do what DX100uk suggests and stop paying and hope the bank sell it to a DCA.

 

Then tackle the DCA as I am doing with Cabot on my other thread. 

 

Is there any risk, do you think, that Barclays (the original creditor) may seek a CCJ ?

[HSBCandMe]

Indeed, and I have re-read that over and again. It is the s.127 enforceability that confuses me though. To be compliant an agreement ordinarily requires  "cancellation clause applicable to the executed agreement."

 

However, this was taken out in 2003 via post. Barclays are saying it doesn't require cancellation rights and I think you have concurred with that view?

 

So, looking at my particular CCA above, and in light of the particular circumstances of the postal offer and acceptance that was made, is it agreed that it does not need any cancellation rights top be enforceable in court?   

 

Assuming that to be the case, my options are either (1) pay Barclays; (2) stop paying and hope they sell to a DCA who I can tie up in knots until it gets statute barred in 6 years' time?   If you read the MSE thread (link above), aside from the dirt debtor /you sepnt it pay them posts, they are indicating the banks lawyers will chew me up and spit me out.

 

Nervous about taking Barclays on with this recon CCA....

 

 

[HSBCandMe]

It was an address I used at one point, not at time I took out loan. 

[HSBCandMe]

...and my paying it over the past 16  years makes no difference? The court cannot impose validity because it is pre-2007 despite the CPR?

 

Part 3.10 of the Civil Procedure Rules (CPR) provides:

 

"General power of the court to rectify matters where there has been an error of procedure

3.10 Where there has been an error of procedure such as failure to comply with a rule or a practice direction-

1. the error does not invalidate any step taken in the proceedings unless the court so orders; and

    

2. the court may make an order to remedy the error."

[HSBCandMe]

2003.  The recon contains no date.

[HSBCandMe]

Does the fact it is undated impact on it?

 

The recon is itself quite old now, 6 years, as I have been paying a long time.

 

 I've been too chicken to take the bank on    

 

I have sent in a fresh CCA to see if what they reproduce matches it.

 

I was hoping to catch them out.. 

 

However, Barclays have not responded to my latest CCA request which is now over a month overdue.

[HSBCandMe]

i'm sure when they wake up they'll cobble something together, but yes, as of next instalment and 16 years on, I will stop paying them. I seem to have enough to query the validity of the recon.

[HSBCandMe]

Attached are 2 letters from Barclays received several years ago about an earlier complaint I raised on just these issues....

doc09188020190401171524.pdf doc09187920190401171512.pdf

[HSBCandMe]

Thanks guys. I will be putting a letter together to Barclays and will cease making payments

 

I will post it up here for comment prior to sending.

 

However, do I put the account in formal dispute to halt debt collection activities?  But if I do that, wouldn't it mean they can't sell it on (which is what we want them to do)?

[HSBCandMe]

How's this?

Draft - Barclays.pdf

[HSBCandMe]

I'm sure I'm being a bit thick here but ref CCA s.67 are you saying the bank are right about there being no requirement for cancellation clause? 

 

Also, ref s.10 Consumer Contracts SI, this is 2013 and presumably is not retrospective?

 

[HSBCandMe]

Consumer Protection (Distance Selling) Regulations 2000. They apply to contracts  "concluded between a supplier and a consumer under an organised distance sales or services provision scheme run by the supplier who, for the purposes of the contract, makes use of one or more means of distance communication" up to and including the moment the contract is agreed. The legislation provides rights to the consumer and obligations which the seller must fulfill.

 

 If the supplier has provided all the information to be communicated before contract formation, the consumer has an automatic right to cancel and rescind a contract at any time from its formation until seven working days after the goods are delivered; or for service contracts, seven working days after the contract is formed (which might be before the service was to have been performed)^]

 

Where the supplier has not provided the consumer with all the required information, the consumer has an automatic right to rescind the contract within three months and seven days of delivery of the goods.

 

Burden of proof problem for me then isn't it?  At least on the cancellation rights.  The grounds for unenforceability still stand on the other heads we discussed?

 

So how does this read?  Any good? 

Draft - Barclays.pdf

[HSBCandMe]

2 minutes ago, Andyorch said:

..do you really need to point out and make them aware of its failings and give them further opportunity to correct it.

 

 

Can they correct it, pre-2007 CCA, if they sent a 'true copy' already? 

[HSBCandMe]

“If the agreement is none cancellable one then there must be a date of execution on the agreement but there need not be a date on either signature.”

 

There is no date on my recon CCA. Relevant to enforceability? 

 

Also as a recon it’s unsigned 

 

[HSBCandMe]

Peter, I think you said in one post that the total credit in my reconstructed CCA contained the interest that should have been rebated, and this is in breach of the Act.  

 

can you identify the section in the Act Barclays were in breach of?

 

Its all unenforceable anyway as already advised...interest and rebates are irrelevant...they dont have a copy of the original. 

 

I want to be clear about ref the recon:

 

The loan was £15K plus £4356 interest preloaded to it. Monthly repayments were £322.60. So that makes 10.9% APR doesn't it?   What do you mean when you say they calculated the APR to be compliant with the s.77 request?  Surely the recon reflects the 2003 original and they didn't;'t work it our after the event?

 

Or have I missed something?

 

Where I'm coming from is the unenforceability issue ref the interest being out contra 127(3).  but is it?

 

they do not have to poses the original agreement, they can populate a template from other sources to produce a compliant copy.

 

All, I think, I have on this that is non-compliant is the address, which was not mine at that time.  The original CCA would have had that, hence its central importance?

[HSBCandMe]

I can’t be alone in being confused by it all. I’m not familiar with this stuff. The confusion arises from being told they don’t need the original for enforceability and then they do. Then that interest and rebate made a difference, which it doesn’t. If I am alone in that confusion I can only apologise. : -( 

[HSBCandMe]

Well guys at least we agree it is a complex area. We don't need to be friends but we do all want to sock it to the banks that screw us over.

 

So, I do want to write the bank a goodbye letter. Having sat on it a few days, and taking into account the above posts (DX: stop paying hem; Andy don't give them too much info; and Peter's take on enforceability) which were all most helpful, I attach a draft.  If there is anything glaringly wrong please, please advise.

 

Then I will wait and post up Barclays' response (which will probably only come when they miss a payment, lol)

 

BTW, I have never been provided with annual statements or notices of sums in arrears, contrary to both s.77A and ss.86B–D. 

 

 

Draft - Barclays.pdf

 

S.9 (4) For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment

 

?

Doc2.pdf

[HSBCandMe]

So that makes all Masterloans of that period unenforceable?

[HSBCandMe]

 

Well for no other reason that I didn't realise until I started posting here that the formula on my recon CCA made it unenforceable: i.e. that adding it to the loan sum and then dividing it by 60 payments was in breach of the CCA. 

 

£15,000 loan

+ £4356 interest

Total amount payable £19,356

Monthly payment £322.60

Number of repayments = 60

 

Because I am little leery of simply relying on the U/E due to the address being wrong, I think the commutation of interest route adds a string to the bow.