Credit AGREEMENT -or- APPLICATION? RBS Advantage Card

[InKogneeToh]

But like i asked before then on what authorities is the issues surrounding the CCA claims being bought to the fore. what i mean is, is there any law you actually have to base this claim upon ? what exactly is the problem from a legally recognisable point of view ? how many proven cases have passed already through the court system.

 

 

 

 

 

Hi

 

You may like to read the following, a now famous appeal to the House of Lords. The claimant, Mrs Wilson won her case in the CA that her credit agreement was unenforceable after a county court judge had initially ruled against her. The CA considered that the harsh consequences to lenders of having an agreement ruled unenforceable was likely to infringe the human rights of the lender and so be incompatible with the Human Rights Act. Read what the HL had to say about that:

 

House of Lords - Wilson and others v. Secretary of State for Trade and Industry (Appellant)

 

Regards, Pam

[InKogneeToh]

Hi m55 and all

 

After reading your comments about s63 compliance I took another look at the whole s62/63 issue.

 

Under s62 (2) it states:

 

2) If the unexecuted agreement is sent to the debtor or hirer for his signature, a copy of it, and of any other document referred to in it, must be sent to him at the same time.

 

So - if a mailshot CC application (supposed agreement) is sent to someone, who then signs and returns it, shouldn't there be a copy of this application/'agreement' for him to keep - as per s62(2)??

 

i'e' if we accept the assertion that this document IS also an agreement, then it must be subject to s62.

 

This is what the OFT doc. on cancellable agreements says on the subject:

 

The general requirement for copy documents is that one copy of the agreement (including, if applicable, a notice of cancellation rights) must be given or sent to the customer when the original agreement is given or sent to him for signature. A first copy is not required where the agreement is neither presented personally nor sent to the customer for signature – for example, a document which is also an application form that a prospective customer picks up from a shop counter or from a leaflet dispenser.

 

So it seems that even the OFT thinks an application form can also be an agreement , but this implies that a first copy is only not required if the document is picked up by the customer.

 

Any comments?

 

Regards, Pam

[InKogneeToh]

Hi

 

I am not convinced that s59 helps in this 'application v agreement' issue any way.

 

Quote:

 

59 Agreement to enter future agreement void

(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

 

My understanding of this section is that only the clause of such an agreement that states that you are bound to a further prospective regulated agreement is void - not the initial agreement itself!

 

Note it says that 'an agreement' is void - not 'a regulated agreement is void'.

 

A possible case might be if a customer signed a contract of purchase in a store, intending to finance the purchase by a seperate regulated credit agreement, and the contract agreement stated that, by signing that document, the customer would also be bound by any associated prospective regulated credit agreement for finance.

 

Regards, Pam

[InKogneeToh]

63(4) In the case of a credit-token agreement, a copy under subsection (2) need not be

given within the seven days following the making of the agreement if it is given before

or at the time when the credit-token is given to the debtor.

 

Could you explain that in simple English for me please?

 

Regards, Dave.

 

Hi

 

From the OFT doc:

 

In the case of credit-token agreements, the second copy agreement may be sent by post to the customer before or with the credit token, rather than within seven days of the

making of the agreement. Similarly, the separate notice of cancellation rights may be sent by post before or with the credit token, rather than within seven days of the

agreement being made.

 

I assume this is because until the customer receives the credit card and starts using it he will have no liability under the agreement anyway so it's not so crucial that he should be sent the 2nd copy and cancellation notice within 7 days of the agreement becoming executed.

 

Hope this helps.

 

Regards, Pam

[InKogneeToh]

The consequence of failing to supply the agreement is that they are in default from the receipt of the credit card and cannot enforce the agreement - meaning that they cannot make any interest or other charges

 

Hi Zubo

 

It has not been established that where a creditor cannot enforce an agreement he also cannot charge interest - this is only an assumption at the moment until tested in court.

 

All legal interpretations of the meaning of 'enforce' that I have seen so far in this context have indicated that it means to sue, repossess goods, or take the value of any security - i.e. to force repayment of the loan.

 

Regards, Pam

[InKogneeToh]

Thanks for clearing that up for me. So the majority of these so-called agreements (that is when it's just an application form) that people are receiving via a CCA request are not enforceable?

 

I'm just trying to know where I stand as I'm about to send off a bundle of CCA requests and fully expect to receive a bundle of application forms in return.

 

MM

 

Hi

 

 

An agreement that does not contain all of the prescribed terms is totally unenforceable (this will not apply to any agreements made after April 2007 as the CCA has been amended).

 

An agreement that lacks other required terms and /or statutory statements of your rights will be improperly executed and unenforceable without an order of the court.

 

Regards, Pam

[InKogneeToh]

Thanks Pam, that is correct - we have not tested that yet.

I musnt give folk the wrong idea - it is uncharted territory which we need to frame more convincingly. There is some interesting case law which begins to provide us with a framework - spotted it in an obscure thread - too late now to look - I cannot hack the late nights as well as you especially as I've been up since 3:00 yesterday morning...

 

Z

 

Hi

 

I would be interested in any case law you can find - after you're beauty sleep of course!

 

Regards, Pam

[InKogneeToh]

Thanks for all the help/info. I'm still a bit confuzzled but will grasp it all in time in regards to the items that make an agreement totally unenforceable versus one that is just improperly executed and therefore requires a court order to enforce.

 

MM

 

Hi Minnie

 

If you want to be REALLY confuzzled you should read the 200+ post thread entitled 'Consumer Credit Agreements'.

 

But in the short term just shout and we'll try to answer your questions.

 

Regards, Pam

[InKogneeToh]

I dissagree the mention of agreement just means thathte current one isn't signed and therefore unexecuted and is the prospective agreement..

 

Regs

Peter

 

Hi Peter

 

Can you explain what you are saying here please?

 

Regards, Pam

[InKogneeToh]

Hi

 

This document, although obviously an 'application form', does contain all of the prescribed terms (credit limit info./interest/repayment info. in the financial details section.

 

But it does not contain the required statutory statement about your rights under the CCA so is improperly executed. So even if they insist it is an agreement it is still only enforceable with an order of the court.

 

Also since the creditor (GE) is different from the supplier (Burtons) I would have thought that it should contain the CCA statement about your remedies against either for breach by the supplier (s75 CCA) and also the one about limit of liability for loss or misuse of credit token but I'm not certain about these in the store card scenario.

 

If they have only been charging for PPI since 2003 then I would ask them to explain why, if you supposedly signed up for it in 1998!?

 

Regards, Pam

[InKogneeToh]

Hi all,

 

since MBNA have finally complied with the SAR, they actually sent me a copy of the original application form i signed (i actually requested that they send the true copy of agreement), now i also had the agreement they sent me just after i signed up.

i have attached the scans in the post (cant figure out how to post the jpeg into the post, any help ?) take a look and see what you think of these two items.

which one is the most relevant ?

 

any ideas ?

 

http://www.consumeractiongroup.co.uk/forum/general/75615-cca-application-agreement-copy.html

 

Hi

 

The first document is just an application form and does not have any of the prescribed terms on so is wholly unenforceable anyway. The second document does have the prescribed terms but is not signed, is NOT a 2nd copy of your agreement that you should have received with the card, has no statements of statutory rights and remedies, no cancellation notice etc etc. So neither document is enforceable full stop!!

 

Regards, Pam

[InKogneeToh]

HI, do you think is a cca or just an application, i,m stupmed:-|

 

Hi

 

Is there any way you can enlarge the small print section and scan it the right way up? I'd like to see what it includes.

 

Regards, Pam

[InKogneeToh]

Here's an interesting observation on the agreement vs application form argument. I have found this in the OFT guidelines for cancellable agreements (page 34)

 

This is to do with enforcement of an agreement. I wonder if the industry have taken this to mean that if the debtor signs the agreement and it contains the details stated then it can enforce an agreement produced later when the application is processed. The guidelines do say the agreement can be enforced in some circumstances but do not say what those circumstances are other than to say any terms (and that will be most of them!) not in the document can have no effect. That will include in most cases the term allowing the creditor to vary the agreement.

 

The standard terms and conditions alone will still not be adequate as an agreement as they do not show the name and address of both the creditor and the debtor.

 

Hi

 

I don't see how a creditor would ever be entitled to enforce any subsequent agreement made after the application (pseudo agreement) is signed unless he gets your signature on this also plus why would one be needed anyway if the application contained all of the requirements?

 

If the application form is correctly signed and contains all of the prescribed terms then I think a judge will be likely to grant an enforcement order, subject of course to his discretion to exclude any terms not included, and/or reduce or discharge any of the sum payable. This will depend on the degree of prejudice caused to the borrower by the specific errors/omissions.

 

Regards, Pam

[InKogneeToh]

No, we keep disagreeing on this, an application even with everything on it is still an Application and requires the Agreement. A great recent example has just come to light: I have not posted onto my Amex thread, but all I had from Amex was my original Amex application. I rejected it and complained about many of their one sided processes. Anyway, they finally gave me a response to my complaints and how they assessed me etc etc and anyway, its all there in the attached T&C which you agreed to.

Guess what they sent me?

A 13 page document headed CREDIT CARD AGREEMENT REGULATED BY THE CONSUMER CREDIT ACT 1974.

Brilliant... This IS a CCA Agreement it has everything in it except....

I havent seen this, its not got my signature dates nor their signature dated.

This is priceless to me, it proves what I have said. The application is just that (certainly now I know for Amex) - it is pre-contractual - the executed document follows after - mine is unsigned by me, it is completely unenforceable.

 

Z

 

Hi

 

I understand and agree (in principle) with your assertion that an application is pre-contractual and therefore cannot stand as an agreement.

 

However, I still don't see how we can argue our way out of this (if it gets to court):

 

127(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document it would seem any document will suffice(whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer(note it's not crucial that the creditor may not have signed it) (whether or not in the prescribed manner).

 

 

 

So the court will consider any old document, written in any form provided that it has all the prescribed terms and the debtor's signature. The minimum requirement is therefore:

 

 

 

 

1) a credit limit or statement as to how/when it will be determined

 

2) Interest rate

 

3) rate/frequency of repayments

 

4) Debtor's signature

 

 

So, if you have been sent any form of document that contains these requirements you are not on safe ground!!

 

 

 

Regards, Pam

[InKogneeToh]

I have noticed that on alot of application forms as i have been paying attention just lately it often does say that once, upon signing of this form it then becomes an agreement between the parties, and upon final checking of the other party and ultimatly stamping it with their seal of approval, that is then the official agreement.

 

To be honest guys i think you are barking up the wrong tree here, at the end of the day i really cant see a judge reasoning things any differently, the terms are there, its dated, signed, it has a limit on it.

Of course the proof of the pudding will be in the eating so i suggest that someone stops procrastinating and takes one of them to court over this, and see where the land lays.

 

my odds are 4/1 against

 

Hi

 

I wouldn't bother taking them to court. I would just write and tell them to 'put up or shut up' and then wait for them to start proceedings - if they dare (so they will incur the court costs not you) - unless, of course, they are driving you mad , in which case it would be worth getting it sorted, one way or the other!

 

Regards, Pam

[InKogneeToh]

Pam,

 

is this something you have already done yourself ?

 

Hi

 

I took a creditor to court in 2004 to have an agreement declared totally unenforceable under CCA s127(4).

 

The reason why I started proceedings against them was because of constant harassment, including phoning my neighbours with messages to pass to us!

 

If you are not being harassed to this extent and can put up with/ignore what they are doing in your own case then depending on what the actual situation is with respect to the agreement I would let them make the first move.

 

Regards, Pam

[InKogneeToh]

pam,

 

yeah well to be honest im not getting any grief at all, infact i kind of wish i was, as my life is soooooooooooooooooooooooooooooooooooooooooooooo

very quiet at the moment it would be good to have a bit of grief

 

well not really but you know what i mean, but no im not getting any trouble from anyone, so i guess i'll just leave it then huh.

 

Johnny

 

Hi

 

Yes if it's the MBNA one you are refering to they haven't got a hope in hell's chance of enforcing it anyway IMO. The only document you signed does not contain any of the prescribed terms and conditions!

 

So silence really is golden sometimes!

 

Regards, Pam

[InKogneeToh]

Mind you when I look at it again I see the phrase is 'whether or not in the prescribed form and complying with regulations under S60(1)..' whereas if it meant what I thought it did it would say 'but' or 'whilst' instead of 'and' between prescribed form and complying.

 

However it does go on to say 'itself containing all the prescribed terms' which per the definitions prescribed terms means those in the regulations.

 

Hi

 

Yes, if you exclude all the text in brackets it reads:

 

....unless a document itself containing all the prescribed terms of the agreement was signed by the debtor or hirer.

 

Of course the more serious the omissions the more likely it is that the court would either refuse an enforcement order or vary or discharge some/all of the debtor's obligations.

 

If anyone gets to court with an improperly executed agreement that would fall into this 'discretion' category it is essential that they remind the judge that the CCA must be read and applied in favour of the debtor (a lot of county court judges have little/no experience of the CCA's complexities or the statutory intent).

 

Regards, Pam

[InKogneeToh]

10. - (1) Schedule 1 (information to be contained in documents embodying regulated consumer credit agreements other than modifying agreements) shall be amended as follows.

 

(2) For paragraph 1 substitute -

 

1.All types. " (1) Subject to paragraph (2) below, a heading in one of the following forms of words -

• (a) "Hire-Purchase Agreement regulated by the Consumer Credit Act 1974";
   
  (b) "Conditional Sale Agreement regulated by the Consumer Credit Act 1974";
   
  © "Fixed-Sum Loan Agreement regulated by the Consumer Credit Act 1974"; or
   
  (d) "Credit Card Agreement regulated by the Consumer Credit Act 1974",

as the case may require.

 

(2) If none of the headings in 1(a) to (d) above are applicable a heading in the following form of words - "Credit Agreement regulated by the Consumer Credit Act 1974".

 

If it doesn't it doesnt conform to whichever of the regs says correct form it is unenfrceable without.etc

 

Regards

Peter

 

Hi Peter

 

If this heading or any other required terms (other than prescribed terms) are omitted from the document it is improperly executed and enforceable only on a court order, NOT unenforceable!

 

This is then where the judge's discretion comes in - to allow enforcement or not, or to vary the agreement, depending on what has been omitted.

 

Regards, Pam

[InKogneeToh]

The thing that concerns me about that is if the intended debtor signs that kind of application and gets turned down, the creditor could turn up at a later date and claim there is an enforceable agreement in place. If they then invent a string of transactions, it is mighty difficult to disprove that the debt exists.

 

Hi

 

This application v agreement phenomena is, I think, exclusively confined to credit token agreements.

 

So - if you signed any 'document' that would not become an executed agreement until the lender had credit scored you and signed the 'document', you would be under no risk whatsoever IMO - because you would never receive the credit token if you were refused credit and so could not make any purchases or withdraw cash. If the lender tried to invent transactions these would be traceable (or rather NOT). I can't see any lender trying this on!! :o

 

Regards, Pam

[InKogneeToh]

Hi Typo

 

Unusual tor me but i did put the word without after what should have beeen the word enforceable(is it me or is this a silly argument) would have hardley intentionally it after unenforceable .Anyway still hasn't answered my question.

 

Regs

 

Peter

 

Firstly, my name is not 'Typo'!

 

I assume the question you are referring to is:

 

Hi

I must admit i am a little confused about this application/agrement debate.

could you exlain why this doesn't apply by the way there is also a similar statement in the earlier regs.

 

I have not said that an agreement need not have this heading! Of course it 'should' have this heading, along with numerous other required contents.

 

What I am saying is that s127(3) gives the court discretion to enforce any document, in any form and with any omissions PROVIDED THAT it contains all of the prescribed terms and the debtors signature, as a minimum.

 

Whether or not the court would allow enforcement, in part or in full, will depend on the particular errors/omissions and the degree to which they prejudice the borrower.

 

This is what the Act provides, but you can challenge it if you feel lucky!

 

 

Regards, Pam

[InKogneeToh]

Hi Peter

 

I'm not picking- I was just clarifying what I had said previously - in order to answer the question you had asked!

 

Regards, Pam

[InKogneeToh]

Hi Again

Interesting issue about credit scoring an agreement after you have appied on a distance contract, it is prohibited by the regs as they say that the correct apr must be shown in order to give the consumer acoorect picture of what they are buying and allow them to accurately comare products.

So in theory any agreement/application with the words rate subject to credit does not meet the standards of the regulations and is therefore unenforceable.

 

Peter

 

Yeah but - no but - yeah but! -

 

I can't say I've seen any agreement that say 'rate subject to credit' and the Agreements regs/TCC regs provide that various assumptions may be made when calculating the APR if the credit limit is not known.

 

Two of these is that the credit limit will be assumed to be £1,500 and that the calculation period will be 1 year. So all agreements should show at least an APR calculated using these permitted assumptions.

 

Regards, Pam

 

P.S. -

Disclaimer

This does not constitute nit-picking but is a contribution to a debate. :D

 

Regards, Pam

[InKogneeToh]

I asked him to write to me but he said that they didnt have that facility... I suggested that he phoned his HO and requisitioned a pen and paper, envelopes and stamps, ... he hung up on me....

 

Z

 

:lol::lol:

[InKogneeToh]

Hi

 

As far as I know, County Courts do not have jurisdiction to declare or change the law, they can only interpret and apply it, so cannot set precedent.

 

Regards, Pam