Credit AGREEMENT -or- APPLICATION? RBS Advantage Card

[joneshousehold]

I am concerned about some of the early comments made on this thread. An agreement is a specific document. Just because the credit industry wants to speed up it's processes by turning a single document into an application and an agreement does not make the former an agreement as well. Just because it states this is an agreement does not make it one either. I think there is something in S59 about pre-contract documents not being valid as an agreement.

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.

(2) Regulations may exclude from the operation of subsection (1) agreements such as are described in the regulations.

I don't know if there are any later regulations that over-rides (1), perhaps some more learned member can clarify for us.

 

Many of the creditors I have challenged on this have yet to produce any useful regulation so I suspect not.

 

If they were however to successfully challenge I still don't think from the cursory look I have given that the document, if it were to be accepted as an agreement, is within the strict rules of CCA and later regulations. The OFT documents that sets out the regulations is a useful place to start

http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft018.pdf

I think they may have failed on the form and content of the document as described in the guidance. It is difficult to read on the posting so I am not sure. If the copy held is as unclear as this I would also throw in a challenge on the grounds that every copy must be easily legible just for good measure.

[joneshousehold]

Ok i see your point, and so reading between the lines this gives us all the right to avoid paying our debts then yes ?

 

What we are looking at is whether the copied document is valid. No moral judgement required. The law is the law. If a large credit industry organisation or 20 have failed to observe the laws of the country then I'm afraid that is their problem.

 

There are many rights and wrongs in the world and we could probably end up in a endless tit for tat argument on this thread that would serve no purpose. I believe it was a judge in one of the many Mrs Wilson cases who said that it may seem harsh for the creditors but the court's job is to just stick to the rules safe in the knowledge that that was what parliament intended.

 

So please don't go down this route, let's have a debate about the legislation.

 

Edit - you added the second post after I had started this so they seem to cross a bit. I understand your thoughts about living with the morals of it all. I have wrestled with my conscience too!

[joneshousehold]

Thanks for your comments. I know you are right from a moral point of view. I have tried the whole helping children thing too, it keeps me awake at night but that's another problem for another day.

 

Like you say, food for thought. It's good to talk it all through. I do feel an element of revenge is driving some of the action for me personally. However when you read some of the posts from desparate people on the forum who are sent into a financial spiral often by a minor indiscretion or a major unexpected problem such as illness, I think the moral argument shifts from the creditors to the debtors. It's that really that makes me fight and work harder on this.

 

It's good really that we remember the reasons why we do things sometimes. Thanks for making me do that again.

[joneshousehold]

I have struggled to read all the RBS application form but I thought it referred to the Conditions of Use overleaf. The OP say they had not received a copy of the T&C's and as this represents an other document referred to in this document, then I would say S78 has not been complied with.

 

Also the wording for the signature box must be inside the box but this is shown outside the box.

 

I also cannot see the statement of protections and remedies, main rights which should be in the signature document as well as the loss or misuse of credit token box.

 

I do note this was signed in 1997, were the regulations different at that time perhaps?

 

I also have concerns about the phrase 'I apply for an RBS Advantage Card...' but I can't read them all. I know Tamadus thinks this complies with the regulations so allowing the application to double up as an agreement but I am not so sure as the creditor still has the power to refuse the application and this suggests to me Section 59 is brought into play.

 

I think this latter point needs a lot of debate although in the CCAA thread it has often been chewed over without any real progress. If we could get to the bottom of it in this thread, it would be a very useful exercise. We know the two views are that on the one hand an application can be an agreement if it embodies all the requirements of the CCA and on the other the argument against it is that Section 59 seems to preclude one document acting as both.

 

What we need now is some constructive input about those two arguments to see how much water each holds. Any takers?

[joneshousehold]

On the question of whether interest can be charged on an account if the agreement is unenforceable, I have found a definition of enforce in definition.com as

 

–verb (used with object), -forced, -forc·ing.

1. to put or keep in force; compel obedience to: to enforce a rule; Traffic laws will be strictly enforced.

2. to obtain (payment, obedience, etc.) by force or compulsion.

3. to impose (a course of action) upon a person: The doctor enforced a strict dietary regimen.

4. to support (a demand, claim, etc.) by force: to enforce one's rights as a citizen.

5. to impress or urge (an argument, contention, etc.) forcibly; lay stress upon: He enforced his argument by adding details.

 

I read this to be wider than just to force repayments. Do we have any other definitions or thoughts that may clear this us or at least formulate a good argument.

 

We are also still unclear on the agreement vs application form argument. Has anyone had any thoughts about this yet?

[joneshousehold]

I think the difficulty here is that we are a bit split on whether an application is an agreement. I don't think it's clear cut and I hoped we could try to examine the arguments on this thread.

 

I have mentioned a few times about Section 59 which I think suggests an application cannot be an agreement. I appreciate I may be wrong but I would like to see some debate on it so that the reasons why can be explored. Equally I may be right and it really would be useful to get the whole subject opened up to examination just to see where it takes us. Anyone?

[joneshousehold]

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)

The court cannot order enforcement where an agreement – even one in the proper form – was not signed by the customer. However, provided that the customer has signed some sort of document containing details of the amount of credit (or the credit limit), the rate of interest (if appropriate) and of the repayments, it can be enforced in some circumstances. If the court makes an order regarding such an agreement, it can direct that any term not

included in that document shall have no effect. In short, a faulty document can in some circumstances be enforceable, but an unwritten agreement can never be enforceable under the Act.

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 application 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.

[joneshousehold]

Pam are you interpreting S127(3) as saying

 

...whether or not in the prescribed form....and

...whether or not complying with the regulations under S60(1)

I read it to say the first of the above but the second to say it must still comply with S60(1). As it is not wholly clear and the Act is basically set up to protect the consumer, then the more generous interpretation is appropriate as it is in line with the intention of the Act (this is a reflection of Mrs Wilson's cases I think)

 

So to comply with the regulations of S60(1) that document signed by the debtor would need

a) the rights and duties conferred or imposed - I read this to mean all the terms & conditions (plus the rights under the Act?)

b) the amount and rate of the total charge for credit - which would be your points 1, 2 & 3 in post number 117

c) the protections and remedies available under the Act - this includes all the boxes that state YOUR RIGHTS etc (perhaps not necessarily in boxes or in places stipulated)

d) any other matters the Sec of State thinks desirable - so anything in the later regs

 

I would also try and argue that the phrase '...itself containing all the prescribed terms of the agreement...' means there must be all the terms where they are prescribed by regulations.

 

I believe this may mean that the document signed by the debtor must have more than your list. I am interested in your thoughts on this.

[joneshousehold]

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.

[joneshousehold]

Peter, I can't seem to get the link to work. It just redirects me to the forum home page. Can you tell me the post number in the thread so I can look it up

 

Thanks

[joneshousehold]

Here try this link

http://www.consumeractiongroup.co.uk/forum/post-485937.html

Yes Peter, I remember this letter and (with my many thanks) I have in fact referred to it in my correspondence. It's the reason why I think the application is not an agreement. I had hoped we could try to get some statutory backing for the statement by the DTI. We seem to be skirting around the Act and Regulations but I think we still haven't identified why the DTI statement is correct. I expect if anyone goes to court they will have to show the statutory backing and produce a DTI letter to support our interpretation. It would just make our claims easier if the Act was clearer. But then that's just Utopia I suspect!

 

Thanks for reminding me of the DTI letter.

[joneshousehold]

I think the whole of the CCA suggests some header of some sort and these regulations change the wording but still require the header.

From an application form point, most I have seen do include the header. Many errors are in the other parts such as cancellation rights, credit limits, timing of repayments etc.

I am not sure however that I am clear as to whether a judge can or would consider an application is an agreement or acts as a signed document just because it has a header on it.

Sorry if I am missing something, are you referring to a particular agreement that doesn't have the header?

[joneshousehold]

I don't think you are being facetious Peter. I am just trying to understand what we have. Are you saying that you think if the application does have the prescribed terms then it can also be the agreement? I know Pam thinks it does but I am not sure. 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. I know that means a creditor has to behave fraudulently but those are the kind of creditors the Act was designed to protect debtors from.

 

That's why I have some doubts about the argument that a single document serves as both application and agreement.

[joneshousehold]

Good luck Mrxxxmas. I think a stick in a hornets nest can be very productive and might even be financially rewarding

[joneshousehold]

Actually more satisfying than any of the others. I haven't had so much fun in years watching these large organisations tie themselves up in knots!

[joneshousehold]

According to the OFT guidelines a cancellable agreement is

Cancellable agreements are those where a trader discusses credit arrangements (and/or the goods to be supplied) face-to-face with the customer and the customer signs the agreement off trade premises.

 

If this description is accurate then Dave's agreement should be cancellable.

 

Whatever the reason, Dave - well done. You must feel really good about the result.

[joneshousehold]

Pam and everyone

 

The way I have read the interaction with S127 is that if an agreement is signed by both parties it is executed and therefore both parties are tied to it (ignoring whether the agreement has all the prescribed terms). If either party has not signed it, the agreement is not binding and this is when we refer to it being unexecuted. However S127(3) then says that if it is the debtor that has not signed it but has signed some other document that contains all the prescribed terms then the court can order that the agreement be enforced. So the court has the power to override the legal position of the document. (Presumably this is because the court would otherwise have no power to order enforcement which I think supports what you are trying to say Pam, no signature(s) = no agreement)

 

S62 and S63 deal with the copies that have to be sent at the start of the contract.

 

So if the creditor has not signed it, there is no contract. However they can sign it at any time as it is in their possession EXCEPT that of course many of them have them stored on microfiche and so they cannot sign the original. If they are foolish enough to send an unsigned agreement to the debtor on receipt of a CCA request then I think they are in a very difficult position.

 

The only thing I am unclear on is what happens if they were to sign it at a later stage such as on receipt of a S77-79 request. Assuming they are honest and date it correctly when signing surely up to that date there is no agreement and they cannot charge interest up to the date of signing. The way to find out if they have signed it later is to make a second S77-79 request (you can do this after at least 1 month I think) because they would have to sign it again and it is unlikely the two will match unless they store a signed copy AND remember to retrieve the signed copy when dealing with the second request.

 

Does that make sense?

[joneshousehold]

I have told one of my creditors that I am no longer interested in S77/78 other than the fact that they haven't fully complied. What they have supplied has highlighted to me that they hold faulty documentation. I shall need to see the signed copy to confirm that they do hold an enforceable agreement and it is this I am now requesting. The whole 1983 Regulations is a smokescreen. This has now moved on.

I also quoted from the letter someone posted on the CCAA thread (Peterbard?) from Ian Macartney, the Consumer Minister who said

‘If there were a dispute about an agreement, the lender would need to prove to a court that there was an agreement and, it is highly likely that the lender would have to produce the original signed document to prove they had an agreement with the consumer to start with. The lender should need to prove to a court that there was an agreement and, if the lender can’t prove the existence of the agreement, winning any court case would prove difficult.’

 

No response as yet but you could do something along similar lines

[joneshousehold]

Rinky

My letter was a bit of a mammoth affair as I pointed out all the areas of difficulty.

 

I started off by detailing the earlier correspondence and setting out what had been sent and when plus I highlighted how the definitions and explanations by them had changed (basically they firstly said the application form was the agreement but I then went back and said it did not have all the prescribed terms so was unenforceable. They then sent a copy of T&C's and said that was the agreement but it is unsigned and still not correct) I then went through all the requirements in the OFT report to make an enforceable agreement and listed everywhere they had gone wrong in my particular case. That was where the letter got lengthy and you will need to have a look at your own documents to make your letter relevant. I think there is a link to the OFT report earlier in this thread but if you can't find it post again and I will find it for you

 

I then said

Although you have made a lot of reference to the requirements of the 1983 Statutory Instrument, this is not the whole story. In order to consider any action for recovery, you will need to supply the courts with a true copy of the original agreement complete with all requirements to be able to show the courts that you have an enforceable agreement. I would remind you of the contents of the letter from Ian Macartney, the Consumer Minister who said

 

‘If there were a dispute about an agreement, the lender would need to prove to a court that there was an agreement and, it is highly likely that the lender would have to produce the original signed document to prove they had an agreement with the consumer to start with. The lender should need to prove to a court that there was an agreement and, if the lender can’t prove the existence of the agreement, winning any court case would prove difficult.’

 

You need to supply me a copy of the original signed agreement, not to comply with the requirements of Section 78 but because your earlier replies have highlighted to me that the documents you hold are faulty and there is no agreement in existence. I did point this out to you in my letter of xxxx. I find it strange that you have chosen to ignore the main point of my letter and have chosen instead to refer to something that is no longer part of the correspondence.

 

Despite your penultimate paragraph in which you state that you regard the debt as enforceable, it is very clear that this is not a tenable statement. The law clearly shows that the documentation is so badly flawed that it can never become enforceable even under an order of the court. I therefore reiterate my earlier comment that I require from you a full refund of all moneys I have erroneously been required to pay to you.

 

Please also note that as the ‘agreement’ is unenforceable you are not able to pursue me for the debt and this includes telephone calls, correspondence requesting payment or formal notices about the unenforceable debt. You should be aware that I am withdrawing my agreement for you to telephone me and all my data must be removed from your records. Any attempt to contact me to pursue any ‘debt’ will be reported to the relevant authorities as unlawful and as harassment. Further you do not hold any enforceable authority to divulge any of my data to any third parties be this either a credit reference agency, a sub-contractor or any other person to whom you wish to transfer or assign rights. I would remind you that as there are no rights under this documentation, they cannot be assigned or divulged to any third party.

Hope that helps. Unfortunately as you get further down the line of correspondence there is less opportunity for a template or standard letter. Your letter will have to reflect what has happened to you. Good luck

[joneshousehold]

Certainly is, but that's more to our advantage than theirs!

[joneshousehold]

Your right, it is a bit, but the satisfaction of seeing so many others giving them a bloody nose is VERY SATISFYING lol (still may have a little ace up my sleeve though;) )

 

 

Good luck to all of you, don't let the bxxxxxxs get away with it.

 

Louis

 

I would still challenge them on the grounds of illegibility. If the copy isn't legible then how can you be sure the original was any more legible.

 

Have you checked the whole thing against the OFt guidelines?

 

Also if you can't remember getting any notice about cancellation ask them to prove they sent it. If there is no proof they sent such a notice then the agreement is doomed!

[joneshousehold]

Way to go, Louis!

[joneshousehold]

Hi, take a look at this site, might be of interest

Financial Agreement Solutions

I saw it advertised on credit expert.com

New Consumer Credit act regulatoins come into force tomorrow, making it easier to challenge the consumer credit act. Plus a website's been set up promising to allow people to check whether their loan/credit card debt is enforceable:grin:

 

Interesting quote on the home page

 

Quote: Lord Justice Sedley – “the moral for a pawnbroker such as Mr Howard is that if he wants the rewards of his trade he must operate strictly by the book, and that the failure to do so may be not merely to unravel agreements, but to reverse the indebtedness that they have purportedly caused."

Penelope Wilson V Howard Pawnbrokers at the London Court of Appeal, Royal Courts of Justice, The Strand. 5th February 2005. Appeal dismissed with costs.

 

[joneshousehold]

a document which is also an application form that a prospective customer picks up from a shop counter or from a leaflet dispenser.

 

I am still concerned about the use of the word ALSO in this part. Doesn't this mean an application can also be an agreement. I thought the DTI/MP letter you posted Peter said it could not be both.

[joneshousehold]

One of my agreements has T&C's that says

Interest will be charged monthly for each statement period on the average daily outstanding balance including all transactions and other charges debited to the account.

This means interest can be levied on the charges for two reason. Firstly it is specifically mentioned in the 'other charges' part. Secondly it says interest is charged on the outstanding balance and once the charges are added to the balance then interest can be levied under the T&C's

 

Does that make sense?