Seahorse v Cabot

[Vulture_Bank]

note there are two companies with very similar names lowells and lovells

 

 

THE CITY OF LONDON LAW SOCIETY FINANCIAL LAW SUB-COMMITTEE

DIRECTIVE ON FINANCIAL COLLATERAL ARRANGEMENTS:

 

REPLIES TO QUESTIONS FROM H.M. TREASURY CONTAINED IN NOTE OF

APRIL 2003 SETTING OUT INITIAL POLICY AND LEGAL QUESTIONS

 

(Warning attempting to understand this thread may seriously damage your brain -- however there are some valuable snippets in here)

 

 

http://www.fmlc.org/papers/fmlc1may2.pdf

i

 

 

 

"Moreover, the consequences of a failure to register the

assignment set out in Section 344(2) are potentially extremely serious"

 

 

"The ability of a party under a properly drafted netting agreement to close out and net an

existing transaction against the counterparty is not in general affected if the claims owed to

the counterparty are assigned or charged to a third party or attached by a judgment creditor of

the counterparty, provided that, broadly, the relevant party had no notice

"

 

etc etc

[Seahorse]

ARRGHHHHH. My brain is in meltdown. And I thought Richard Spud's links were difficult to get your head around.

 

VB, I'm particularly interested in the point you raise about assignments and the rqurement to register them at Companies Registry. Glen Crawford has bleated on before about twisting the law to suit the way things are assigned, and has admitted it was to avoid the need to pay stamp duty.

 

Assuming an account to have been transferred in the way you describe, I assume that the Companies Registry is open to inspection by Joe Public to allow the subject of a transfer to see how it affects him?

[Vulture_Bank]

United Kingdom, Banking and Financial, Buy To Let Lending - Deloitte - 21/06/2007 09:45:23, Financial Services, Loans, Mortgages and Leasing, Real Estate, Landlord & Tenant, Market Commentaries, Rental & Residential Property

 

you have to scroll a long way down the page to see

 

 

 

Taxation Developments On Securitisation

Securitisation as a whole, and specifically the securitisation of mortgage loans, is an increasingly popular means of raising finance. Significant developments in the corporation tax treatment of securitisation companies are expected to provide a further boost to undertaking securitisations using a UK Special Purpose Vehicle (SPV) for both UK and overseas originators. In addition, there have been a number of recent VAT cases that have in some respects clarified the VAT treatment of the SPV but also raised issues for further thought.

 

A summary analysis of the key developments in both corporation tax and VAT on securitisation is set out below.

 

These issues should be given careful consideration both by building societies that already have well developed securitisation programmes and those considering securitisation for the first time.

Corporation tax and securitisation

 

One of the key economic drivers behind securitisation is that finance can be raised at a lower cost than would otherwise be possible; this is achieved through the use of an SPV with an enhanced credit rating.

 

In order to obtain an enhanced credit rating, there should be the greatest certainty of flows in and out of the SPV as possible, with taxation being one of these flows.

 

The introduction of new accounting standards regarding the accounting for debt and derivatives under both International Financial Reporting Standards (IFRS) and UK GAAP caused a particular issue for UK SPVs as it threatened to make the accounting profit too volatile to be an acceptable basis for computing cash tax liabilities.

 

Interim measure

 

The UK tax authorities, as a result of extensive lobbying, responded to the issue in an effective manner by introducing a temporary regime whereby securitisation companies continue to base their tax calculations on accounting profits determined under ‘old’ UK GAAP (i.e. pre FRS 26). In effect, retaining the previous status quo.

 

However, it was always recognised that the preservation of ‘old’ UK GAAP for tax purposes was a temporary measure and provision was left for new regulations to be implemented.

 

The date to which the ‘old’ UK GAAP rules can apply has been previously extended to accounting periods ending before 1 January 2008, and provision was made in the recent budget for this to be extended to a later (unspecified) date.

 

 

Securitisation Regulations

The new Securitisation Regulations, that have effect for periods of account beginning on or after 1 January 2007, resolve the issue on a more permanent basis by breaking the traditional link in the UK between accounting profits and taxable profits. In effect, the Securitisation Regulations tax a securitisation company in accordance with its retained cash, subject to commercially required cash reserves, as set out in the waterfall (the waterfall being the priority of payments in the SPV set out in the transaction documents).

 

The Regulations obviously needed to be carefully drafted to ensure that they will only catch those companies they are intended to catch and are sufficiently robust to prevent companies being artificially engineered to fall into the rules (i.e. for avoidance purposes). Experience to date suggests that, with the inevitable exceptions, these aims should be broadly achieved, particularly in relation to the securitisation of mortgages.

 

For existing SPVs it is noted that the transitional provisions have been extended such that it is uncertain when (if ever) SPVs that entered into a securitisation prior to 1 January 2007 will be obliged to apply the new Securitisation Regulations.

 

There are provisions to elect into the new regulations for such SPVs that meet the criteria, and, although to be assessed on a case-by-case basis, most SPVs are likely to want to elect in as the new regime is a favourable one. The time limit for the election is within 18 months of the end of the first accounting period beginning on or after 1 January 2007 and is irrevocable.

 

Where the Securitisation Regulations apply taxable profits are therefore comparatively certain and the SPV is only taxed on a small margin (typically the waterfall provides for a margin of just 0.01% of the principal of the balance outstanding on the Notes to remain in the SPV).

 

Certain conditions must be met in order for the Securitisation Regulations to apply; two key issues being that, firstly, the SPV is a "securitisation company", and secondly, that the payments condition is met.

 

Securitisation company – there are a number of ways in which a company will be regarded as a "securitisation company" within the Securitisation Regulations, and accordingly a securitisation company is defined by means of a number of attributes. These require careful consideration when assessing potential securitisation structures, however in a traditional mortgage loan securitisation they should not be overly onerous to meet.

Payments condition – the payments condition aims to ensure that cashbox companies cannot be smuggled into the regime by requiring securitisation companies to pay out all their receipts within a given time period except to the extent that cash reserves are required for credit enhancement and similar purposes. In essence it is a revenue protection mechanism for HMRC as the flows out of the SPV should be taxable in the hands of a UK resident tax payer. However, again, in a vanilla securitisation structure this condition should also be met without difficulty.

 

Other practical issues encountered to date include the means of obtaining sufficient comfort for the rating agencies that the assets involved are "financial assets" (another condition of the regulations) and queries relating to stamp taxes on securitisation.

 

 

Clearance procedures

There are no specific clearance procedures or tax rulings available in respect of the Securitisation Regulations, however the more general clearance mechanism of a Code of Practice 10 (COP 10) application is worth consideration. On the one hand, it should be clear whether or not the conditions of the Securitisations Regulations will be met, however this is new legislation and as such structures rely on obtaining as much certainty as possible and all securitisation transactions come under very close legal scrutiny; a positive COP 10 could help prevent further queries arising at the implementation stage.

 

The new tax rules are a significant development for securitisation in the UK and are welcomed. Although implemented due to the introduction of IFRS, they also remove many other tax issues, such as those concerning the deductibility of interest, that have historically needed to be overcome in the UK. The Regulations do set out a number of conditions that must be met and to this extent require careful monitoring, however they do offer the degree of certainty that is so fundamental for a securitisation transaction to function properly.

 

VAT and securitisation

The purpose of this section is to highlight a few of developments that have taken place in recent months as a result of case law, which affect the treatment of VAT in relation to securitisation programmes. (It does not deal with the roles and responsibilities of the cash and administration managers, as currently, these appear to be unchallenged by HMRC, and the assumption is that the securitisation is of UK loans/mortgages/ receivables involving a UK originator and a UK SPV.)

 

(i) VAT Treatment of the Assignment of ‘loans’, receivables etc. by the originator.

 

The assumption here is that, as is typical with loan/mortgage securitisations, the loans/mortgages etc are transferred/ assigned to the SPV without the completion of the transfer of full legal title, that is, only the beneficial/economic benefit interest is legally transferred. Where this happens, the High Court’s ruling strongly suggest that there is no supply by the originator/assignor to the SPV, but is rather simply a precondition necessary for the securitisation to take place [MBNA Europe Bank Limited (2006)]. This means that there may now be no exempt supply to consider in relation to the cash paid to the assignor by the SPV and, as a result, any VAT incurred on costs will be residual. Given that most Societies have very low or ‘nil’ VAT recovery, the practical implication of this is that there is little change to the amount of VAT that the originator may reclaim:D (mbna's failed attempt to get VAT relief)

 

.(ii) Does the SPV act as a ‘factor’?

Prior to the MBNA decision, it was thought that the assignment either, was an exempt supply for VAT purposes or, might be made as part of a factoring arrangement where the SPV was a factor. This latter point has caused some debate on whether the SPV is acting as a ‘factor’. However, for a supply of factoring to occur, the person to whom the loans/debts/receivables are assigned must (a) do something for the seller/assignor and (b) charge the seller for doing it. In essence, a factor will typically charge the assignor for ‘debt collection’ services etc. and this is a VATable supply. However, the general view is that, in securitisations, the assignee does nothing for the assignor and does not charge any consideration for services; it merely acquires the right to the loan/debt/receivable.

 

This debate now appears to be resolved by the High Court. In its decision [MBNA paragraph 102] the Court refers to transactions which, like the assignment of receivables in the MBNA securitisation case, are not supplies for VAT purposes. One of these transactions is that of factoring and the assignment of debts to a factor. In this way, the Court clearly sees a difference between securitisation and factoring.

 

(iii) What else, for VAT purposes, does the SPV do?

 

If the SPV is not acting as a ‘factor’ and does not appear to be supplying anything to the assignor, what is it doing from a VAT perspective? The only other thing that the SPV will do is raise capital by issuing financial instruments, typically commercial paper, notes or bonds.

 

Following the ECJ ruling in Kretztechnik [Kretztechnik AG v Finanzamt Linz, Case 465/03], HMRC issued a Business Brief [business Brief 21/05 – 23 November 2005], in which they state:

"The issue of other types of security, such as bonds, debentures or loan notes, should…be treated as non-supplies [for VAT purposes] when the purpose of the issue is to raise capital for the issuer’s business." Prior to this, the issue of bonds etc by an SPV in a securitisation was seen by HMRC as a supply for VAT purposes and, where the purchaser of the bond etc was located outside the EU, this gave the SPV a right of recovery of VAT incurred on costs relating to the non-EU element of its supplies.

As a result, where the above conditions apply, any input tax is, following the ECJ ruling above, now to be treated as ‘residual’ and can only be recovered if the SPV makes any supplies that will give it a right to reclaim any of the VAT it incurs.

 

The interesting point, from a VAT perspective, is that, if the SPV is doing nothing for the originator, for example, it is not acting as a factor, is it in ‘business’ for VAT purposes? If it isn’t, then HMRC may well see the issue of the notes, bonds etc by the SPV as a supply for VAT purposes. This would, presumably mean that it was in business, and it would now be able to register for VAT to recover any VAT relating to the issue of the notes, bonds etc to non-EU counterparties. It might also be a requirement that the SPV is not registered for VAT in order to protect its bankruptcy remote status; although, with correct management of any claim, this should not present a risk to the SPV.

 

The fact that the SPV cannot reclaim any VAT it incurs, underlines the importance of ensuring that ‘servicing’ fees etc are treated as exempt by any supplier.

 

Clearly, this is an area where there is need for clarification.

 

Securitisation is a complex area for VAT and there is still much more certainty needed in determining exactly what, for VAT purposes, happens (if they don't know who does ? )in a securitisation.

 

"Certain conditions must be met in order for the Securitisation Regulations to apply; two key issues being that, firstly, the SPV is a "securitisation company", and secondly, that the payments condition is met."

[make them aktiv runners]

The assumption here is that, as is typical with loan/mortgage securitisations, the loans/mortgages etc are transferred/ assigned to the SPV without the completion of the transfer of full legal title, that is, only the beneficial/economic benefit interest is legally transferred. Where this happens, the High Court’s ruling strongly suggest that there is no supply by the originator/assignor to the SPV, but is rather simply a precondition necessary for the securitisation to take place [MBNA Europe Bank Limited (2006)]. This means that there may now be no exempt supply to consider in relation to the cash paid to the assignor by the SPV and, as a result, any VAT incurred on costs will be residual. Given that most Societies have very low or ‘nil’ VAT recovery, the practical implication of this is that there is little change to the amount of VAT that the originator may reclaim:D (mbna's failed attempt to get VAT relief)

 

.(ii) Does the SPV act as a ‘factor’?

Prior to the MBNA decision, it was thought that the assignment either, was an exempt supply for VAT purposes or, might be made as part of a factoring arrangement where the SPV was a factor. This latter point has caused some debate on whether the SPV is acting as a ‘factor’. However, for a supply of factoring to occur, the person to whom the loans/debts/receivables are assigned must (a) do something for the seller/assignor and (b) charge the seller for doing it. In essence, a factor will typically charge the assignor for ‘debt collection’ services etc. and this is a VATable supply. However, the general view is that, in securitisations, the assignee does nothing for the assignor and does not charge any consideration for services; it merely acquires the right to the loan/debt/receivable.

 

 

Many legal sites do indeed state that Equitable Assignment occurs when Legal and Beneficial title become separated.

 

To put the latter paragraph in context to Cabot, the assignee is Cabot UK which in essence is a paper company so it indeed does nothing for the Assignor. Cabot Europe do the paperwork and they are clearlynot party to the assignment. Wonder where Morley etc fit in????

 

Vulture, your posts are interesting. If you started a separate thread for all these, then they would all be together, Seahorse's ongoing events are then easier to read as well.

[Vulture_Bank]

will sort that lot out next year

 

heres a link to a new thread put in scotland section of cag

 

basically its about bradford and bingley securisation ,,,,,, but it mentions differences in law (and equitable assignment)that relate to scotland ( specially for seahorse )

 

 

http://www.consumeractiongroup.co.uk/forum/scotland/124617-bradford-bingley-securisation-scottish.html

 

or direct to the source ( only 200+ pages)

 

http://www.investis.com/bbg/pdfstorage/mort0405a.pdf

 

 

bits here relating to the consumer credit act and liabilities

 

[url=http://www.investis.com/bbg/pdfstorage/mort0405a.pdf][/url]

[enaid]

Very merry Xmas Seahorse, hope you have a good en.:D think that may be the nearest they get to a xmas smilie on here lol but anyway enjoy lol Enaid xx

[FANTASY CHARGES]

SEAHORSE you were asking why ireland recently as you know cabot shadowed mbna by opening up over there

 

here is the bumf........

 

Ireland - 29 January 2007

[Seahorse]

I see the reason WHY it's good to do business in Ireland. But my question was, why are the DOA between MBNA and Cabot done under IRISH law, when the agreements themselves are not. Rather, English and Welsh law.

 

But I think this has been answered in Elizabeth1's thread somewhere. The concensus was, I think, the assignments can be under Martian law, for all the difference it makes in real terms, as it's the agreement between OC and debtor that matters for all practical purposes.

 

"If Any".

[FANTASY CHARGES]

http://www.tax.org.uk/attach.pl/4239/4251/page%2030,31.pdf

 

WHAT DO YOU THINK OF these two

 

http://www.hmrc.gov.uk/manuals/bamanual/BAM36060.htm

 

THE key words to google are "impaired debt" and

 

"impaired loss"

[make them aktiv runners]

FC we all know the "reasons" as such. Seahorse is correct though, it is down to people being hoodwinked by a new country's law that in reality does not exist, as any contract signed by the consumer can only be governed by the law it was made uner.

 

On a lighter note, merry xmas to all CFC members.

[Vulture_Bank]

ARRGHHHHH. My brain is in meltdown. And I thought Richard Spud's links were difficult to get your head around.

 

VB, I'm particularly interested in the point you raise about assignments and the rqurement to register them at Companies Registry. Glen Crawford has bleated on before about twisting the law to suit the way things are assigned, and has admitted it was to avoid the need to pay stamp duty.

 

Assuming an account to have been transferred in the way you describe, I assume that the Companies Registry is open to inspection by Joe Public to allow the subject of a transfer to see how it affects him?

 

yes mr crawford

 

11. Stamp on assignment.

An absolute assignment in writing of a chose or thing in action is liable to stamp duty as a conveyance1. The duty payable in

respect of conveyances is dealt with elsewhere in this work2.

1 See Diplock v Hammond (1854) 5 De GM & G 320; Buck v Robson (1878) 3 QBD 686 (not following Re Adams, ex p Shellard (1873) LR 17

Eq 109); Fisher v Calvert (1879) 27 WR 301; Adams v Morgan (1883) 14 LR Ir 140, CA; Re Y and Z, Arranging Debtors [1939] IR 107.

Assignments of choses in action by way of security are not now subject to stamp duty. They were formerly chargeable under the Stamp Act 1891

Sch 1, 'Mortgage, Bond, etc'. The duties payable under that head of charge were abolished by the Finance Act 1971 s 64(1), and in general

instruments which, but for the abolition of duties, were chargeable with duty under that heading are not chargeable with duty under any other

heading.

 

2 See STAMP DUTIES AND STAMP DUTY RESERVE TAX vol 44(1) (Reissue) para 1027 et seq.

[Seahorse]

So why then, do they insist that the assignments are equitable I wonder?

 

So what needs to be done to make them legal assignments. ie absolute? And are we entitled to find out whether an assignment becomes absolute?

 

I feel like I'm going round in circles. Fascinating as all this is, I fear losing the point which is, in my case at least, that there isn't an agreement for them to support their claim. I mustn't lose sight of that once this all ends up in court.

[Newborn]

Is it that an equitable assignment can be done without the debtor's express permission, but to make it legal the debtor's permission is required?

Just a thought but:

If the debt is equitably assigned, the OC still has an interest so the debt still possibly remains on their books? (S.A.R. would show this.)

Once legally assigned the OC would remove totally from books?

I bring this up because there is a 2 year period on one of my cases where DCA claim to have bought the debt but the amount still remains on the account I have with the OC.

 

Newborn

[Vulture_Bank]

october 2005

 

very interesting article

 

http://www.marlincapitaleurope.com/MarlinCapitalEuropeDebtarticleforCCRmagazineOct05.pdf

 

in the usa

"A major newspaper story from 16

May 2003 read: “The Federal Trade

Commission (FTC) has obtained a

temporary restraining order against

three corporate defendants in

Secaucus, New Jersey, halting an

alleged nationwide scheme to extract

millions of dollars from consumers by

falsely threatening them with arrest

and prosecution unless consumers

immediately paid off non-existent

debts.”

The complaint alleged the six

defendants violated the FTC Act and the

Fair Debt Collection Practices Act by:

Threatening to initiate civil or criminal

charges against consumers if they failed

to pay the debt, when the defendants

had no intention to do so.

Making harassing telephone calls and

using abusive techniques to collect or

attempt to collect the supposed debts.

Falsely claiming that consumers

owed up to $130 more than the

amount of the actual debt.

Stating or implying that certain

communications were from a lawyer,

when often they were not."

 

 

 

[andrew1]

october 2005

 

very interesting article

 

http://www.marlincapitaleurope.com/MarlinCapitalEuropeDebtarticleforCCRmagazineOct05.pdf

 

in the usa

"A major newspaper story from 16

May 2003 read: “The Federal Trade

Commission (FTC) has obtained a

temporary restraining order against

three corporate defendants in

Secaucus, New Jersey, halting an

alleged nationwide scheme to extract

millions of dollars from consumers by

falsely threatening them with arrest

and prosecution unless consumers

immediately paid off non-existent

debts.”

The complaint alleged the six

defendants violated the FTC Act and the

Fair Debt Collection Practices Act by:

Threatening to initiate civil or criminal

charges against consumers if they failed

to pay the debt, when the defendants

had no intention to do so.

Making harassing telephone calls and

using abusive techniques to collect or

attempt to collect the supposed debts.

Falsely claiming that consumers

owed up to $130 more than the

amount of the actual debt.

Stating or implying that certain

communications were from a lawyer,

when often they were not."

 

 

 

 

 

HoHoHo

 

Sure as hell the same in the UK

 

Happy Christmas everyone

[Seahorse]

Looks like I'll be going to court then. I gather from Willum's tone that he is rather upset with me. Here's his email to the CSA...

 

Morning Claire

Cabot wishes to clarify one particular point regarding this matter in relation to section 10 Notice under the Data Protection Act. As a result I have set out our position about the processing of personal data in full below.

It is indeed Mr. Seahorse’s right in order to serve a section 10 Notice pursuant to the Data Protection Act which he did on 13 August 2007. However, on the same day, Cabot’s Customer Assurance department sent out our final response by e-mail and post which did clarify the issue about the processing of personal data. Please see attached a copy of this letter for your information.

Notwithstanding, I will clarify our position on Section 10 of the Data Protection Act and why this does not apply in this matter.

Section 10(1) of the Data Protection Act 1998 (“DPA”) states:

“Subject to subsection (2), an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, any personal data in respect of which he is the data subject, on the ground, for specified reason –

(a) the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and

(b) that damage or distress is or would be unwarranted.”

Notwithstanding section 10(1) it states in Section 10(2) of the DPA:

“Subsection (1) does not apply

(a) in a case where any of the conditions in paragraphs 1 to 4 of Schedule 2 is met, or

(b) in such other cases as may be prescribed by the Secretary of State by order.”

Paragraphs 1 to 4 of Schedule 2 of the DPA states:

Conditions Relevant for purposes of the First Principle: Processing of any Personal Data

1. The data subject has given his consent to the processing.

2. The processing is necessary

a. For the performance of a contract to which the data subject is a party, or

b. For the taking of steps at the request of the data subject with a view to entering into a contract

3. The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract.

1. The processing in order to protect the vital interests of the data subject.”

Mr. Seahorse, in fact, signed a credit agreement (attached) and used the funds available to him. Mr. Seahorse breached his agreement with Barclaycard at that time for failing to make payments. Mr. Seahorse’s account was subsequently assigned to Cabot Financial (UK) Limited, formerly Kings Hill (No.1) Limited and therefore the processing is necessary for the performance of a contract to which the data subject, Mr. Seahorse, is a party to. As a result it is clear why section 10(1) of the DPA does not apply to Mr. Seahorse.

Furthermore, under the Barclaycard standard terms and conditions for 1999 which Mr. Seahorse has received, it states “We may transfer to any person any or all of: (1) our rights under this agreement at any time; (2) our duties (including, without limitation, our duty to lend to you. We may do this without telling you. Your rights under this agreement and your legal rights (including under the Consumer Credit Act 1974) will not be affected”.

Furthermore, Mr. Seahorse’s contention regarding that he did not consent to data being passed is refuted as this was clearly in relation to the purpose of direct marketing. Please see the credit agreement (attached), more specifically the box with “Personal Data”, it states: “The tick/cross in this box means that I agree that Personal Data and any other information you hold about me on the Barclays Group computer systems may be used within the Barclays Group to bring to my attention products and services which may be of interest to me.” This is a general requirement under section 11 of the DPA which brings to the attention that a person has the right to stop the processing of data for the purpose of direct marketing. This is supported by the statement on the agreement under the signature box which asks a person to write to the Barclays Group in order to stop the processing personal data for the purposes of direct marketing if one has ticked the box.

In short, Mr. Seahorse signed a credit agreement and spent the funds available to him at that time. Mr. Seahorse has received the statements relating to his account and therefore shows an outstanding balance at the time of assignment of his account. As a result Mr. Seahorse is required to pay these monies back to Cabot Financial. Cabot is strongly of the opinion that Mr. Seahorse’s arguments are unfounded and have no merit of succeeding. We have at all times co-operated with Mr. Seahorse’s requests and have always acted appropriately.

I trust this is of assistance in order to resolve this matter.

Many thanks

Kind regards

Willem Wellinghoff

Assistant Legal Counsel

Cabot Financial (Europe) Limited

1 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4UA

DDI: +44 (0)1732 524 716

Mobile: +44 (0)7919 160 390

Fax: +44 (0)1732 522 374

E-mail: [email protected]

www.cabotfinancial.com

 

 

He still insists the application form is an agreement. Silly Boy.

 

His letter to me next...

[Seahorse]

... and here it is. This is the one they sent back in August and he says is a reply to my S10 notice. Maybe it is, but I don't see anywhere in it where they explain to me why they will not stop processing my data. Perhaps I'm just thick, so if you good people could have a look and let me know if I'm wrong, I'd be grateful. It certainly doesn't make any reference to my letter of 13 August as Willum thinks. In fact, it's in reply to EARLIER EMAILS. And NOT my section 10 notice. It says so in black and white.

 

I write in relation to the aforementioned and your e-mail correspondence dated 7 August 2007 and 8 August 2007.

It is clear that despite several attempts to clarify matters in full and having set out our final position on several occasions, you do not wish to pay the outstanding balance on your account. However, the arguments you have raised throughout your correspondence with the Cabot Financial Group are unfounded. You have stated that it is your intention to initiate legal proceedings against the Cabot Financial Group of Companies. Please be advised, that any legal proceedings brought against any Company within the Cabot Financial Group shall be vigorously defended and a counterclaim entered against you for the full outstanding balance including any accrued interest.

Cabot has previously clarified its position regarding the assignment of your account from Barclaycard and do not see any benefit for the repetition of these matters. Cabot also does not see the crux of raising the argument regarding the assignment of "rights and duties" as at all times you have been provided with relevant information regarding your account which Cabot has received from Barclaycard.

Regarding your concern on the processing of your personal data, it is clear you signed an application form with Barclaycard, which constitutes a credit agreement regulated by the Consumer Credit act 1974. Your signature is supported by the statement "This is a Credit Agreement regulated by the Consumer Credit Act 1974. Sign it only if you want to be legally bound by its terms". You would have been supplied with Barclaycard's normal terms and conditions at the time you received your credit agreement. The version applicable to your agreement has been enclosed and also includes the relevant interest rates applicable to your

agreement. You are still bound by those terms and conditions by virtue of you signing and agreeing to the terms of the agreement and your obligations under the agreement shall continue until you have paid the outstanding balance under the agreement. I also refer your attention to

Clause 15 "Using information about you" of the enclosed terms and conditions. It clearly states that information about you may be given to the credit reference agencies and to anyone Barclaycard transfer or may transfer their rights under the agreement.

In your correspondence, you state that you did not mark the tick box on the agreement in relation to the processing of data. Your understanding of this point is flawed, as this is an optional consenUopt-in clause for marketing purposes and a requirement under the Data Protection Act

1998. I refer your attention again to clause 15.2 of the terms and conditions, which states "We can store and manage the information we hold about you on a computer or in any other way. To help us develop and improve our services to you and other customers and protect our interests, we may also: ... tell you (by letter, phone [including automated dialling], fax or email) about products and services (including those of others), which may interest you. (We will only let other companies in the Barclays Group contact you if you have expressly agreed they can.)"

Furthermore, on the credit agreement it states "The tick/cross in this box means that I agree that Personal Data and any other information you hold about me on the Barclays Group customer systems may be used within the Barclays Group to bring to my attention products and services which may be of interest to me." Therefore this is clearly a consent/opt-in box for marketing purposes. Otherwise how would Barclaycard be able to forward to you a credit card which you have clearly used and which you have not denied using without processing your personal data?

The terms and conditions referred to above also states in clause 16.4: "We may transfer to any other persons any or all of: our rights under this agreement at any time; ...We may do this without telling you." Please be advised, it is Barclaycard that decide whether they wish to transfer the

rights and/or duties and our position, which concurs with Barclaycard, shall remain as in previous correspondence that we have only been assigned the rights. Notwithstanding, we shall at all times assist customers with their requests for information.

You have alleged that Cabot may be guilty of "passing-off" as we send a good-bye letter on behalf of Barclaycard. We strongly refute your argument and at no time has Cabot been guilty of an act of passing-off or otherwise. Our sending of a good-bye letter on behalf of Barclaycard is

subject to an agreement between the Cabot Financial Group and Barclaycard and therefore there has at no time been any act of passing off or otherwise. Furthermore, the documentation recently sent to you in our correspondence dated 1 August 2007, was received by Cabot from Barclaycard and was reproduced by Barclaycard and is entirely relevant to your account.

Please be advised your understanding on Default Notices and registering of defaults is incorrect. A default notice which is served under section 87 of Consumer Credit Act is a formal notice to confirm that the debtor is in breach of a credit agreement and is a formal demand that the debtor

needs to make a payment in order to clear the arrears in order to bring an account up to date. Once such default notice is satisfied it is treated like the breach never occurred. This is entirely separate to a registering of a default with the credit reference agencies. If, as in this matter, you

have not satisfied a default notice this gives the creditor a number of rights including, but not limited to, the right of immediate payment of the outstanding balance. If such default notice is not satisfied, the credit reference agencies will subsequently be updated to reflect this behaviour on your account. As you did not satisfy your default notice with Barclaycard, Barclaycard registered this behaviour with the credit reference agencies and updated the entry as a "default" which they

are also allowed to under the terms and conditions. The right to register and report on defaults has been discussed in previous correspondence and therefore there is no need to repeat this again. Cabot continues to have the right to report on your account with the credit reference agencies.

Cabot has at all times acted appropriately and in accordance with relevant legislation, regulations, codes of practice and guidance applicable to its industry. For the avoidance of doubt, Cabot has at all times assisted you in providing information and clarification on all matters on numerous

occasions and therefore Cabot does not see the need to apologise whatsoever.

In conclusion, Cabot's position remains unaltered and request payment of £2,032.14, which does not include interest accruing over within the next 14 days. Furthermore, we shall not remove any entries relating to this account with the credit reference agencies. If you make full payment of the outstanding balance on your account within the next 14 days we will subsequently update your credit entries with the credit reference agencies to mark "satisfied".

This is our final position and is non-negotiable. We shall not enter into any further correspondence with you.

 

Court it is then.

[Seahorse]

Oh, well. She did her best I suppose. Here's my email in reply to the CSA.

 

Thank you Claire

I’m rather confused as to Mr Wellinghof’s thinking, as he seems to think that the attached letter was in reply to my communication of 13 August 2007. However, the letter states that it is response to previous communications of 7 and 8 August, so I don’t see how it is a reply to my section 10 notice of13 August.

My records also show that this letter was emailed to me at 10:08 am on 13 August 2007. Some 13 minutes BEFORE I emailed Cabot a copy of my Section 10 notice. Again, I am confused as to how the attached letter could possibly be construed as a reply to my Section 10 notice since I received it prior to the issuing of that notice. Therefore, it remains my contention that Cabot Financial (Europe) Limited are in breach of the Data Protection Act 1998. However, I thank Mr Wellinghoff for bringing this matter to my attention: I shall of course pass on these new concerns to the Information Commissioners Office so that my complaint currently being investigated may be updated.

Again, I thank you for taking the time to investigate this matter, even though it is clear from the evidence provided by Cabot that there exists no agreement regulated by the Consumer Credit Act 1974, nor have they complied with my Section 10 notice under the DPA 1998, except in the imagination of Mr Wellinghoff and others.

As my attempt to resolve this matter through the CSA’s complaints procedures has obviously failed, I shall await the outcome of the ICO’s investigation before deciding on my next course of action. I do hope that I will not need to resort to court action, but you should be aware that I shall not hesitate to take this step if all else fails. I shall of course mention that the CSA has been instrumental in attempting an alternate resolution, although without success.

[andrew1]

Hi Ya Seahorse, what are they up to? Can you just confirm which company it is that is processing your data? You see Willie's letter above keeps playing that same old card of using the different names again.. "Cabot Financial Group, Cabot, Cabot Financial UK Ltd, they really do keep bringing this up don't they?

 

Much easier if they stuck to the one name. CF (EUROPE) Ltd seems to be doing all the work.. never learn, never, never learn... roll on 2008 the year that Cabot goes... RIP!

[Seahorse]

Yes, well there's he rub Sarah. Doesn't matter WHAT sh1te Willum spouts, there's only one company processes my data, so that's who'll be getting taken to court. I see he can't even be bothered to check his timeline to make sure of his ground.

 

Yet again, I think I've proved that the CSA is an Old Boys' Club, and we're not even fit to take thei coats at the door, as far as they're concerned.

 

However, yet again, Claire says they'll be monitoring Cabot (Europe)'s behaviour. So PLEASE everyone. Get your complaints in to them. Make Claire actually work for her money. It might do no good. But at least it will show them you mean business. And will make Willem have to actually boot up his PC once in a while too.

 

Who knows... you might even be ensuring that they'll need an extra employee to handle the backlog. Surely THAT will be good for the PM's unemployment figures, if nothing else.

[elizabeth1]

Yes, well there's he rub Sarah. Doesn't matter WHAT sh1te Willum spouts, there's only one company processes my data, so that's who'll be getting taken to court. I see he can't even be bothered to check his timeline to make sure of his ground.

 

Yet again, I think I've proved that the CSA is an Old Boys' Club, and we're not even fit to take thei coats at the door, as far as they're concerned.

 

However, yet again, Claire says they'll be monitoring Cabot (Europe)'s behaviour. So PLEASE everyone. Get your complaints in to them. Make Claire actually work for her money. It might do no good. But at least it will show them you mean business. And will make Willem have to actually boot up his PC once in a while too.

 

Who knows... you might even be ensuring that they'll need an extra employee to handle the backlog. Surely THAT will be good for the PM's unemployment figures, if nothing else.

 

 

Same old stuff again isn't it? Cabot's just will NOT LEARN from their mistakes and hold their hands up up!! Willem really is losing the plot isn't he? He sure is one confused dude!!

 

Nevermind it'll soon be 2008 and time this company is shown up for it's antics - KARMA!!! this will catch up with them!!

[lookinforinfo]

You could also argue that the ICO have ruled that the definition of consent is

"any freely given........." where they carry on to state that as you have to sign the agreement to get the loan, your consent was not freely given, and

therefore your consent was not given at all!

One of the conditions for processing in Schedule 2 is that the individual has given his consent to the processing. It is our view that consent is not easy to achieve and that organisations should consider other conditions for processing before looking at consent. No one condition carries greater weight than any other. All the conditions provide an equally valid basis for processing. Merely because consent is the first condition to appear in both Schedules 2 and 3 does not mean that organisations should consider it first.

 

Consent is not defined in the Act and so it is helpful to look back at Directive 95/46/EC which defines "the data subjects consent" as:

 

"....any freely given specific and informed indication of his wishes by which the data subject signifies his agreement to personal data relating to him being processed"

 

In the context of applying for credit, consent to share information with the credit reference agencies cannot be freely given. This is becuase if you dont agree to your data being shared then your application will simply be rejected. In other words you have no choice.

No one seems to be using that

argument but the ICO continually bang on about it, so it does seem a waste

not to make use of it.

[Seahorse]

I don't think a judge would see it like that. You DO have a choice; Take it or Leave it. Nobody forces you to take on credit. Although sometimes it seems the only option. But that's for another debate.

 

But what Willum fails to realise is, the T&Cs he kindly found for me says, they will not share my data unless they ask my permission first.

[lookinforinfo]

I think the crux of the matter is that once you have taken a decision to apply

for a loan, then all of them write in to the contract that they will share your data with Cras etc. You cannot avoid it by going to another company.

I take your point that you can decide not to take the loan, but if the loan was for a mortgage on a house for example, it is not as if one could save up

for twenty years and then crash the whole amount down.

[Seahorse]

True. True.

 

In my case though, I DIDN'T make decision to apply. I filled in an application form that was pre-approved, and I remember doing so because I thought at the time, there's NO WAY they will give me a card, based on m poor credit history. I'd gone through a series of redundancies just before hand, each one putting me deeper ad deeper in debt.

 

Imagine my surprise, not to say relief, when the card DID pop through my letter box. In hindsight, I'd almost be tempted to say that I was targeted ON THE BASIS OF MY POOR HISTORY. And they knew full well that in my position, I was never going to say no. I suspect it was a marketing campaign directly targetting people in the same circumstances as me.

 

Oh dear, I'm being cynical again.

 

But it WOULD be interesting to see the figures relating to that campaign way back in the late 90's. Hmmm.