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.

 

[AndyOrch]

The confusion arises with reconstituted version of agreements in that it has two purposes.

1.To comply to a request using section 77/78/79 requests.......then yes they have complied and it will suffice.

2.Do they wish to enforce using the above if ever they issued a claim against you...

When providing a copy of an executed agreement in response to a request under section 78(1) of the Act:

a.     must a creditor provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or complete copy thereof? or

b.     can a creditor provide a document which is a reconstitution of the original agreement which may be from sources other than the actual signed agreement itself?

It was held that a creditor can satisfy its duty under section 78 by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.

The judge accepted that as a matter of law, section 78 does not itself require any particular explanation as to how the copy was made. However, as a matter of good practice and so as not to mislead the debtor, it is desirable that the creditor should explain that it is providing a reconstituted as opposed to a physical copy of the executed agreement. This will also explain why the copy might otherwise look a little odd. The creditor can also explain in the letter that this procedure is satisfactory under the Act.

The judge also provided that the following information needs to be included in the reconstituted copy agreement (assuming of course that it was present in the original):

1.     Heading: Credit Agreement regulated by the Consumer Credit Act 1974

2.     Name and address of the debtor

3.     Name and address of the creditor

4.     Cancellation clause applicable to the executed agreement.

All of the above may be provided on a sheet which is separate from the full statement of terms and conditions which also forms part of the reconstituted agreement. The creditor may, however, decide to reconstitute the agreement in a different way so that, for example, the information above is populated electronically onto the same sheet as that which sets out the terms and conditions, or some of them. The judge stated that he did not intend to prescribe the precise form of the reconstituted agreement. The key point is what information it should contain, subject to the point that its format should not be such as to mislead the debtor as to what he agreed to.

The judge also considered whether a statement like the one appearing in the reconstructed application form in Carey referring to the agreement to the terms and conditions "attached" needs to be included in the reconstituted copy. Alternatively if the application form had said "I agree to the terms overleaf", should that statement be included. The judge held that this aspect of the form is not necessary for the purpose of the section 78 copy, although there is nothing to stop a bank from putting it in or indeed from furnishing a copy of the type of application form or signature page that the debtor would have signed, as some banks have done. The statement referring to terms and conditions is not itself prescribed information and the supply of the terms and conditions which were applicable at the time will tell the debtor what he needs to know in terms of the content of what he signed up to, including the presence (or otherwise) of the prescribed terms.

In practical terms what this is likely to mean is that if the creditor chooses to use as the section 78 copy the section 63 copy, which would have been provided to that particular debtor at the time following execution of the agreement, this will be sufficient provided that the information referred to above is supplied. This exercise is not a mere formality. The creditor will need to check carefully that the details of the debtor at the time are correct and that those are the particular terms (including prescribed terms) that he/she agreed to. This is to ensure that it is an honest and accurate copy.

Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 (Regulations) as to form, as at the date the agreement was made in order to comply with section 78?

A creditor need not, in complying with section 78, provide a document which would comply (if signed) with the requirements of the Regulations as to form, as at the date the agreement was made.

Must the copy provided under section 78 include the debtor's name and address as at the date when the agreement was made, and if so in what form?

The section 78 copy must contain the name and address of the debtor as it was at the time of the execution of the agreement. But the creditor can provide the name and address from whatever source it has of those details. It does not have to take them from the executed agreement itself.

If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?

If an agreement has been varied by the creditor under a unilateral power of variation, the creditor must still provide a copy of the original agreement, as well as the varied terms.

 

Does a creditor's breach of section 78(1) of itself give rise to an unfair relationship within the meaning of section 140A of the Act?

If a creditor is in breach of section 78 this does not of itself give rise to an unfair relationship within the meaning of section 140A.

 

If there is a breach of section 78(1), is that sufficient without more to make a declaration to that effect appropriate, in particular:

a.     where the creditor admits the breach but did not admit it before the issue of proceedings?

b.     where the creditor denies or does not admit the breach?

A court has jurisdiction to declare whether in a particular case there has been a breach of section 78. Whether it will be appropriate to grant such a declaration depends on the circumstances of that case. If there are proceedings on foot and within them the creditor formally admits non-compliance with section 78, there is no point in maintaining the proceedings just to obtain a declaration to that effect.

 

Does the document signed by the debtor contain the prescribed terms for the purposes of section 61 and/or section 127(3) if:

a.     they are on a sheet which is referred to on the piece of paper that was signed by the debtor; or

b.     that sheet is attached to the piece of paper signed by the debtor; or

c.      that sheet is separate from but was supplied with the piece of paper signed by the debtor?

The judge held that in assessing whether prescribed terms are "contained" in an executed agreement the following principles are relevant:

·        it is not sufficient for the piece of paper signed by the debtor merely to cross-refer to the prescribed terms without a copy of those terms being supplied to the debtor at the point of signature

·        a document need not be a single piece of paper

·        whether several pieces of paper constitute one document is a question of substance not form. In particular a physical connection between several pieces of paper is not necessary in order for them to constitute one document

·        a physical connection (or one or more physical connections) between several pieces of paper does not necessarily constitute them as one document

·        where the debtor's signature and the prescribed terms appear on separate pieces of paper, the questions of whether those pieces of paper together constitute one document is a question of substance and not form.

He added that he would not seek to answer the questions in issue 5 in their current state because the scenarios postulated all require some further elaboration before a simple "yes" or "no" answer can be given.

 

If it were not established, at trial, that there was a document signed by the debtor containing the prescribed terms, would that of itself entail an unfair relationship?

The judge held that the answer to the question was no.

 

Andy

 

[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

[AndyOrch]

It depends.....did you take out and sign for the loan on the Banks Premises ?

You state it does not contain your address  from the time of inception..therefore its unenforceable in Court.

[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?

 

[renegadeimp]

pre 2007 they need the original one with all terms/conditions and any changes afterwards.  A recon wont do.

[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?

[renegadeimp]

They still have to supply everything with it.

They cant just make some rubbish up and say thats it.

[dx100uk]

 

a recon being enforceable under the consumer credit act does not mean it is necessarily enforcable in a court of law

original creditors don't do court

they'll sell it on to a DCA debt buyer.

being more than 6yrs old makes no odds [[an account, paid or not, paying or not is removed from your credit file when a default reaches its 6th birthday - never to return]

does not mean its not owed mind, a CCJ if attained WILL show for 6yrs

[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

[Peterbard]

Hi

There are two kinds of unenforceability first the 127(3) route.

 

This is about prescribed terms basically if they are not there then the Agreement cannot be enforced, this means the Judge is not able to issue an enforcement order, he has no say in the matter. This section was repealed in 2007  but the repeal was not retrospective

so the section is still applicable to agreements executed before that date.

 

The prescribed terms on a fixed term loan are, the total credit and the repayment intervals and amounts. these terms must, a) be there and b) be accurate.

 

The interest on a fixed sum loan is not a prescribed term ,unless the interest is variable unlike a credit card where it is.

 

The other breaches in Schedule 1 (terms and conditions) can be actionable, but not being prescribed terms fall under section 127(1) here the court are  free to issue sanction in accordance with the amount of damage caused by the omission or error, In my experience a waste of time unless it is the APR and it is miles out. I checked ypur APR and it is correct

 

IMO The agreement is enforceable under this criteria

 

When considering the signing an agreement, by this time the distance Marketing were in force, this permitted agreements to be executed remotely.

 

 

[dx100uk]

3 hours ago, HSBCandMe said:

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 821.34 kB · 1 download ·

now go back and read post 10.

banks don't do court.

wait for it to be sold on then worry about fighting it.

what you have there is nothing really

certainly not anything a DCA if they bought the debt would go near court with

pers i'd sit on your hands now.

 

 

[dx100uk]

thread title updated for clarity of issue

thread moved to the Barclays forum.

 

dx

 

[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?? 

[dx100uk]

Yes and it can be enforceable under the CCA, but doubtful for court purposes.

[Peterbard]

Hi

There are two kinds of unenforceability first the 127(3) route.

 

This is about prescribed terms basically if they are not there then the Agreement cannot be enforced, this means the Judge is not able to issue an enforcement order, he has no say in the matter. This section was repealed in 2007  but the repeal was not retrospective

so the section is still applicable to agreements executed before that date.

 

The prescribed terms on a fixed term loan are, the total credit and the repayment intervals and amounts. these terms must, a) be there and b) be accurate.

 

The interest on a fixed sum loan is not a prescribed term ,unless the interest is variable unlike a credit card where it is.

 

The other breaches in Schedule 1 (terms and conditions) can be actionable, but not being prescribed terms fall under section 127(1) here the court are  free to issue sanction in accordance with the amount of damage caused by the omission or error, In my experience a waste of time unless it is the APR and it is miles out. I checked ypur APR and it is correct

 

IMO The agreement is enforceable under this criteria

 

When considering the signing an agreement, by this time the distance Marketing were in force, this permitted agreements to be executed remotely.

 

43 minutes ago, HSBCandMe said:

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

Yes, they can. The date 2007 refers to unenforceability via section 127. A reconstruction is about  creating a compliant copy(section 77).

However, many do not have the information to reconstruct from so long ago. It could have been an offer of some kind one off deal for instance , their generic information may not cover it, and they run the risk of you producing an orriginal in court, which would put them in all kinds of trouble if they had just made the copy up.

44 minutes ago, HSBCandMe said:

. Re consrtJust one question:  can Barclays reconstitute a pre-2007 CCA?? 

Yes, they can. The date 2007 refers to unenforceability via section 127. A reconstruction is about  creating a compliant copy(section 77).

However, many do not have the information to reconstruct from so long ago. It could have been an offer of some kind one off deal for instance , their generic information may not cover it, and they run the risk of you producing an orriginal in court, which would put them in all kinds of trouble if they had just made the copy up.

[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 ?

[Peterbard]

I meant enforceable under section 127(3),   This is dependant on the content of the signed agreement. There are cases where a court has not enforced because no original agreement was produced, but I think most will agree that this is seldom the case these days. One of the requirements of 123(3) is that the agreement was signed by the debtor. So the logical thing would be to say ,they needed to produce the original to prove this.  Unfortunately, in Carey the judge pointed out that the section only said that an agreement WAS signed, which leaves it open to the civil burden of proof, Balance of probabilities, as long as the creditor can provide other proof that an Account did exist, statements etc and cash was forwarded, it goes a long way to fulfilling that test.

 

Andy gave an excellent appraisal regarding what is required in order for the court to accept this as a true copy. If the say it is not acceptable the creditor is unable o enforce under the copy regs and section 77.

[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....

 

 

[dx100uk]

Barclays don't do court.

throw the morality card out the window

 

dx

[AndyOrch]

I thought we had concluded this in posts# 4 & 5 ?

 

Unenforceable if it does not contain the correct address at the time  of inception. ? 

[HSBCandMe]

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

[AndyOrch]

Then not the one from inception of the agreement....unenforceable 

[Peterbard]

45 minutes ago, Andyorch said:

I thought we had concluded this in posts# 4 & 5 ?

 

Unenforceable if it does not contain the correct address at the time  of inception. ? 

Yes as per your earlier post. A true copy must contain all the details which were on the original executed agreement(you signed) however they do not have to poses the original agreement, they can populate a template from other sources to produce a compliant copy.

[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."