In need of major help, what do i do next?

[PriorityOne]

Kenny, in PeterBard's post #195, he says :

 

"If it were me I would confront the creditor and express my indignation about being missled with the miossquotation of the APR and demand an explination, stating you are withholding payments as the agreement was improperly executed and they must get a court order if they wish to enforce."

 

This looks like a good way to go.... adding, that should they do decide to pursue court action, you will also expect them to provide a breakdown of how the APR has been applied to the court, along with a lack of Terms & Conditions.

 

See what response you get....

[Curlyben]

Kenny, in this case follow Peter's advise as I mentioned earlier.

[conar686]

The leeway for error with APR is just .1% above the actual figures so they are well outside this.

 

Can some one explain the how the agreements can be unenforceable due to the APR. I have an agreement with Comet that has all the prescribed terms (no T&Cs yet) but the APR is 29.5%

[kennyparkroad]

ok im in the process of writing a letter directly to HBOS regarding the APR.

 

How do i word it though.

 

"Further to recieving an incomplete copy of the agreement and having the opportunity to look over what was sent, i would like to know why the APR

for this account is underestimated.

 

The APR says it is calculated at 9.6% however has been charged at 10.53%, this is clearly not what was entered into and therefore renders the agreement totally unenforceable, therefore no further payments will be forthcoming and i look forward to your notification that no further action will be taken"

 

something like that? sorry its rushed have to nip out, be back in 30 mins!

[Peterbard]

ok update

 

Trading Standards are saying they are "satisfied" with the document from the AA despite me asking for the terms and conditions,

 

here is their letter

 

 

 

Further to your email, and visit to our office, i am now satisfied that the Creditor has finally complied with your request under section 77 of the CCA.

 

I am advised that you have now recieved the statement of account and are in possession of the copy of the agreement that was sent to me (it was one sided, referred to Terms and COnditions overleaf which wasnt shown all i got was a 1 sided blank page!)

 

I understand that you were hoping that the agreement would contain the terms and conditions however "a true copy" is deemed to have been given if it contains all the prescribed information. The agreement does not have to contain any additional information such as terms and conditions (even if it makes mention of them in the agreement document?) In terms of the act "a true copy" does not need to be a complete copy of all paperwork from the original transaction.

 

I am aware that you still feel that the company have failed to discharge their obligation to you however i am satisfied that they have now acted within the bounds of current legislation, and i thank you for bringing the matter to us.

 

 

 

 

 

 

 

Does anyone have any ideas what i could put as a reply?

 

The main document refers to T&Cs overleaf that have NOT been supplied.

 

 

 

Any ideas?

 

thanks.

 

HI Kenny

Sorry to be so long getting back to you I have been in hospital for a few days HO Hum.

The TS are wrong they have not complied with the request.

I would quote the following.

(1) The creditor under a regulated agreement for fixed-sum credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of [£1], shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

Also draw their attention to the to section3 (2) of the copies of documents regulations 1983/1557 of documents

General requirements as to form and content of copy documents

3.-(1) Subject to the following provisions of these Regulations, every copy of an executed agreement, security instrument or other document referred to in the Act and delivered or sent to a debtor, hirer or surety under any provision of the Act shall be a true copy thereof.

(2) There may be omitted from any such copy-

(a) any information included in an executed agreement, security instru­ment or other document relating to the debtor, hirer or surety or included for the use of the creditor or owner only which is not required to be included therein by the Act or any Regulations thereunder as to the form and content of the document of which it is a copy;

Since the Bulk of the contents of the T and C’s will contain the information prescribed in schedule 1 of the regulations and are required to be included within the Act these are a central part of the request.

I do not see how they can say that the Creditor has complied without giving these.

I will draft a letter for you to fiddle with regarding your APR and get back to you.

 

Best regards

Peter

[Having_A_Knightmare]

Hi

 

Subscribing as Ive got these **** bags to come....Just one Question thats been bugging me.

 

All the prescribed terms do they have to be on the agreement before you sign it? The reason I am asking is sometimes the APR is on the T&C on a seperate sheet of paper.......

 

RO

[Peterbard]

HI RO

The APR is not a prescribed term hewever it should be contained within the information on the main body of the agreement accorkding to regs 19831553 or under key financial information on agreements dated after march 2005.

If it is not then the agreement is improperly executed as per section 65 and enforceable only by order of the court.

Regards

Petr

[Peterbard]

HI

Letter as promissed

 

Date

 

Name

address

 

 

Dear sir

 

Ref agreement no;

 

 

Thank you for your reply to my request under section 77 of the consume credit act 1974.

I am afraid you reply was incomplete as none of the terms and conditions mentioned with the contract are enclosed and there fore you are still in default and are unable to enforce this agreement. Please note the appropriate legislation for your convenience.

 

(1) The creditor under a regulated agreement for fixed-sum credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of [£1], shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

 

I would also draw your attention to section3 (2) of the copies of documents regulations 1983/1557 of documents

General requirements as to form and content of copy documents

3.-(1) Subject to the following provisions of these Regulations, every copy of an executed agreement, security instrument or other document referred to in the Act and delivered or sent to a debtor, hirer or surety under any provision of the Act shall be a true copy thereof.

(2) There may be omitted from any such copy-

(a) any information included in an executed agreement, security instrument or other document relating to the debtor, hirer or surety or included for the use of the creditor or owner only which is not required to be included therein by the Act or any Regulations thereunder as to the form and content of the document of which it is a copy

 

Since the Bulk of the contents of the T and C’s will contain the information prescribed in schedule 1 of the regulations and are required to be included within the Act these are a central part of the request.

 

If as I suspect the reason for none compliance is that no such terms and conditions were issued with the original agreement then this would make it necessary to gain a court order in order to enforce.

 

Returning to the information sent

 

There seems to be a complete lack of regard for the form of the document as prescribed by the regulations, the breaches a to numerous to co into here although you can be sure all such failures to comply will be presented if necessary for the courts consideration.

One fof my main points of concern is the understatement of the APR required by the agreement.

As you will be aware this is a key factor in the decision making process when taking out a loan of this nature and I must admit to being dissapointead at your attempt to mislead in this matter which may amount to the agreement being miss sold.

 

Although the APR is not a prescribed term the Act does make provision for this kind of breach via section127 (1) The court has the power to dismiss the application for enforcement bu the creditor due to” prejudice caused to any person by the contravention in question, and the

degree of culpability for it; and” section(ii) of the above.

 

I think that the degree of error in favour of yourselves in the APR quoted would be regarded as prejudicing the debtor and I believe that the court would have no option but to render the agreement unenforceable.

I attach a breakdown of the actual APR calculation for your clarification.

 

 

0

 

0

 

1

 

0

 

1

142.81

1.00837819

141.6235

2

142.81

1.01682658

140.4468

3

142.81

1.02534575

139.2798

4

142.81

1.0339363

138.1226

5

142.81

1.04259882

136.975

6

142.81

1.05133391

135.837

7

142.81

1.06014219

134.7083

8

142.81

1.06902427

133.5891

9

142.81

1.07798077

132.4792

10

142.81

1.0870123

131.3785

11

142.81

1.0961195

130.2869

12

142.81

1.105303

129.2044

13

142.81

1.11456344

128.1309

14

142.81

1.12390147

127.0663

15

142.81

1.13331774

126.0106

16

142.81

1.14281289

124.9636

17

142.81

1.1523876

123.9253

18

142.81

1.16204253

122.8957

19

142.81

1.17177835

121.8746

20

142.81

1.18159574

120.862

21

142.81

1.19149537

119.8578

22

142.81

1.20147795

118.8619

23

142.81

1.21154417

117.8744

24

142.81

1.22169472

116.895

25

142.81

1.23193032

115.9238

26

142.81

1.24225167

114.9606

27

142.81

1.2526595

114.0054

28

142.81

1.26315452

113.0582

29

142.81

1.27373748

112.1189

30

142.81

1.2844091

111.1873

31

142.81

1.29517012

110.2635

32

142.81

1.30602131

109.3474

33

142.81

1.31696341

108.4389

34

142.81

1.32799719

107.5379

35

142.81

1.33912341

106.6444

36

142.81

1.35034284

105.7583

37

142.81

1.36165628

104.8796

38

142.81

1.3730645

104.0082

39

142.81

1.3845683

103.1441

40

142.81

1.39616848

102.2871

41

142.81

1.40786585

101.4372

42

142.81

1.41966123

100.5944

43

142.81

1.43155542

99.75862

44

142.81

1.44354927

98.92977

45

142.81

1.45564361

98.10781

46

142.81

1.46783928

97.29267

47

142.81

1.48013712

96.4843

48

142.81

1.492538

95.68266

 

 

 

 

 

 

 

 

 

 

Total repayment

 

 

6854.88

 

 

Present Value

 

 

5625

 

 

 

 

Total APR Calculated as per TCC regulations = 10.53%

You will be aware that the Apr stated in your “Agreement is 9.5%.

The Total charge for credit regulation state that the expectable leeway for error in the stated APR is .1% above the APR stated so yet again you would have to apply for a court order to enforce,. at which point, as stated earlier section 127(1) would be considered and the court would have no option but to render the agreement unenforceable.

 

I await your response

 

CC Trading stanards

[kennyparkroad]

Thanks so much Peter i will get that sent away today!

 

ill post what they reply, also what Trading Standards reply with too.

 

Thanks again

[Peterbard]

Hi Kenny

I am currently drafting a complaint to the DTI aboutthe erroneous advice given by the TS and th Information Commissioners Office, and would apreciate the use of any correspondance from them or from anyone else with regards to section77 79 requestes

pleas send to [email protected]

[kennyparkroad]

PS - will send the letter you gave me tomorrow, dont have the address on Hand that they sent the statement of account from. which is what i would use to reply to them with.

[conar686]

I attach a breakdown of the actual APR calculation for your clarification.

 

Can you provide an 'idiots guide' to how this was calculated Peter

 

Tks in advance

[Peterbard]

Hi C

 

I am affaraid i cannnot provide a simple explaination because their isn't one. APR calculation is quite complex i am working on an posting to explain it to the best of my abilities and wil post it on the my unenforceability thread.

The figure i have given you is correct however and is worked out according to the formula contained in the total charge for credit regulations 1999/3177 and are applicable to your contract.

Contracts dated after 2005 are slightly different and the formula for thosose are contained within the 1482 ammeded agreement regulations.

Don't worry to much about the accuracy of this calculation there are a nummber of APR calculating sites on the web and i think you will find they all come up with about the same answer. Don't forget that their figure exceeds the agreed error by a factor of about ten.

 

Best regards

Peter

 

Best regards

Peter

[pelham9]

Does not the CCA state that the rate of interest charged should be shown on a CCA agreement?

 

The APR VERY RARELY EQUALS the rate of interest charged. Because it is an expression in percentage terms of the total cost of borrowing and is an approximation to one decimal place in any case, its use in a CCA credit agreement cannot be correct - but nearly all lenders do so use it .

 

APR is a very useful concept to allow borrowers to compare the cost of possible loans and its main use was meant to be in advertising . It has been very useful in compelling lenders to use compound methods to calculate interest instead of very dishonest flat rate and simple interest methods but it is NOT the rate of interest to be applied to the loan.

 

In your case a APR of 9.6% means only that the total cost of borrowing in % terms is in the range 9.55% to 9.6499% hardly a definitive rate of interest to be actually applied.

[Peterbard]

HI

APR

The Apr is calculated usinfg the total charge for credit as defined in the TCC regulations ths includes things like setting up fees final payments on HP and obligatorry attached agreements like compulsarry PPI's etc.

In this respect it is an extremely accurate method of calculating the actual cost of the loan .

 

The formula is

 

 

K=m

AK = K’+m’ A’K’

Σ (1+i)tK Σ (1+i)tK’

 

K is the number identifying a particular advance of credit;

 

K’

 

 

 

is the number identifying a particular instalment;

 

A

 

 

 

K

is the amount of advance K;

 

A’

 

 

 

K’

is the amount of instalment K’;

 

Σ

 

 

 

represents the sum of all the terms indicated;

 

m

 

 

 

is the number of advances of credit;

 

m’

 

 

 

is the total number of instalments;

 

t

 

 

 

K

is the interval, expressed in years, between the relevant date and the

 

date of advance K;

tK’

 

 

 

is the interval, expressed in years, between the relevant date and the

 

date of instalment K’;

i

 

 

 

is the APR, expressed as a decimal.

 

 

 

THe leeway for the error of the calculation is .1% below or 1% above the actual figure so the acceptable figures on your loan would be

 

 

10.4 to 11.6%

 

This from the TCC regulations

 

1. TOLERANCES IN CALCULATING THE APR TO BE SHOWN IN ADVERTISEMENTS OR AGREEMENTS

 

Where an APR is to be shown in an advertisement or agreement a general tolerance and a number of specific tolerances which may be used in certain circumstances are allowed. However, the general tolerance cannot be used in conjunction with any of the other tolerances described below.

 

a. General tolerance

 

A general tolerance allows the disclosure of a rate that is up to 1.0 above or 0.1 below the correct APR. For example, if the correct APR for an agreement, rounded to one decimal place, is 17.3, any figure from 17.2 to 18.3 inclusive can be used in an advertisement or agreement.

 

A final note this from the OFT FAQ

1. 
   
2. 8.13 Do I have to state the APR?

The APR is not included in the list of prescribed terms in Sch 6. This means that if the APR is missing or incorrect, the court is not precluded by s127(3) from making an enforcement order, provided that the rate of interest is stated if required (see Q8.6).

However, the agreement would be improperly executed (see Q1.19), and so would be enforceable against the debtor only with a court order. S127(1) requires the court to dismiss an application for an enforcement order if it considers it just to do so, having regard to prejudice caused to any person by the contravention in question and the degree of culpability for it – see Q1.20.

Office of Fair Trading Consumer Credit (Agreements etc) Regs draft FAQs 96

 

In Short as i have said they are in breach by giving incorrect information

 

Best regrds

Peter

 

 

[kennyparkroad]

Thanks peter

 

you said

 

"

THe leeway for the error of the calculation is .1% below or 1% above the actual figure so the acceptable figures on your loan would be

 

 

 

10.4 to 11.6%"

so wouldnt that mean that they are ok as the interest is shown as 9.6% but is worked out to be at 10.53% which is the 1% above?????

sorry if that sounds thick.

[Peterbard]

Hi

9.6 is not between 10.4 and 11.6

 

Regards

Peter

[kennyparkroad]

sorry im a little confused lol i thought that the 9.6 was the actual figure when it was, its the 10.53 thats the actual figure.

 

my bad - having a bad day!

 

sorry peter and thanks

 

im getting fax numbers today to fax your letter off to them.

[kennyparkroad]

i will just bow down to your wisdom and go from there! lol

[Peterbard]

HI Sorry if my last post seemed a bit short perhaps if i explainthe reasoning behind the leeway it will become clearer.

The idea is to stop the creditor from giving a better APR than is actually represented by the agreement so the regs say if you get it you quote a figure that is under the actual figure by .1% it will not be allowed as this will misslead joe public into thnking they are getting a better deal than they are the upper 1% is just an arbitarry figure it doesnt really matter as what creditor would want to give a high figure for the APR and scare off the punters.

 

Best regards

Peter

[kennyparkroad]

Thanks Peter.

 

Im faxing the letter you gave me in an earlier post to HBOS (Halifax Bank of Scotland) today, i just hope that if they do take it to court, a judge would deem it unenforceable due to the massive Error in the APR.

 

I will let you know what response i get from them.

[kennyparkroad]

question

 

now that they have produced an agreement which apart from the APR is correct, do i now cancel my complaint with the ICO?

[kennyparkroad]

PS - have faxed Peters letter to HBOS and have printed fax header sheet confirming reciept! i also faxed it to 2 different numbers in the department.

[conar686]

Peter

 

The formula is

 

 

K=m

 

AK = K’+m’ A’K’

Σ (1+i)tK Σ (1+i)tK’

 

Any chance of a worked example for clarity for us dummies.

[Peterbard]

HI C

Keep an eye on my agreement unenforceablity thread.

Best regards

Peter