Interest Rates following Default/Termination of CCA

[Monty2007]

Could I ask a question about contracts and the enforcement of interest rates following default.

 

I defaulted on two Amex accounts due to unemployment and they served default notices on me, as such my understanding is that they have terminated my cedit agreement contract with them and as such I suggest all provisions contained within such as interest rates etc.. are void? (I have been folowing the links on data protection that parallel this). Amex then had a DCA contact me and agree a repayment schedule, however not only have Amex continued to take compounded interest but have also increased it?

 

Under Data Disclosure I requested all my information and statements from Amex, (note that had stopped sending them following default) BUT when I got the pack they had still continued to produce monthly statements but NOT sent any to me. The statements were typical in that they detailed the debt and interest etc, but they have terminated these contracts through issuing a default notice and transfering the management of my accounts to a DCA (NCO Europe).

 

Under the data protection request they did not bother sending me my CCA but did send an old application for a previous card that I had paid up and was never in default.

 

I should add that I have been paying them for 1.5 years at now £1k per month and have the debt at 50% of the original sum.

 

Do I have any response in law or any views on what I should do?

[clutchingatstraws]

Send for a cca If they default.

 

No CCA No Pay

[Monty2007]

Many thanks. I am curious to hear if anyone has been in the situation where they have a default (terminated CCA) then the debt is NOT assigned but managed by a DCA PLUS having increased interests payments added by the (original) creditor?

 

I have asked for interest to be removed or significantly reduced but to no avail. What would a court do?

[tomterm8]

Many thanks. I am curious to hear if anyone has been in the situation where they have a default (terminated CCA) then the debt is NOT assigned but managed by a DCA PLUS having increased interests payments added by the (original) creditor?

 

That happens alot.

 

I have asked for interest to be removed or significantly reduced but to no avail. What would a court do?

 

Unless you had a defence, they would award the CCJ, halt the interest, and probably grant an installment order (assuming you are unable to pay in time). Courts don't order you to pay more than you can affford, and can not place a charge on most benefits.

 

 

Do the Credit Agreement Request, and also do a S.A.R. to check what unlawful fees & interest they have charged. It's quite possible that these fees make up 80% of the debt.

 

If they can't find the credit agreement (assuming that it isn't an overdraft, and that the debt is less than £25,000), they can't enforce the debt anyway.

[clutchingatstraws]

No CCA= No Debt=No Pay

 

Ask for a complaint form.

 

Complain about anything they can't resolve.

 

report them to TS

 

Complete their complaints procedure until 8 weeks are up or they say they can't progess anymore.

 

Threaten them that you are going to the FOS.

 

If they dont back off report them to the FOS

 

FOS bill them 400 Quid.

 

Still No CCA Still NO Pay

[Monty2007]

Many thanks tomterm, I appreciate your advice and comments.

 

Though given the original CA is now terminated through their default how would interest be treated by a court? I do not wish to avoid the debt but would like to avoid the interest or at least have it reduced.

 

Regards

 

Monty

[Monty2007]

Incidently this has another twist. Amex has not assigned my debt to NCO Europe but have written to tell me that they will NOT answer any more of my letters and I am only to deal with NCO. What is the exact legal position here given I do not have a contract with NCO. This is my proposed response:

 

Dear Sirs

 

Account Ref: xxxxxxxxxxxxxxxxx

 

I hereby request that you supply me with a true and signed copy of my Consumer Credit Agreement for American Express account xxxxxxxxxxx. You will be aware that under the Consumer Credit Act 1974 (Sections 77−79), I am entitled to receive a copy of this agreement upon request. I therefore enclose a payment of £1.00 which represents the fee payable under the Consumer Credit Act. I also understand that a copy of my credit agreement should be supplied within 12 working days from receipt of this letter which has been sent and tracked by the Royal Mail Recorded Delivery Service.

 

Since you are a Debt Collection Agency, I request that you supply a signed true copy of the deed of assignment in relation to the above American Express account. This is, I understand, an obligation, whether you are the original creditor or not, under section 189 of the Consumer Credit Act 1974.

 

I have also asked Amex for the same and told them that the account is now in dispute.

 

Any more angles here?

 

Thanks

 

Monty

[tomterm8]

Many thanks tomterm, I appreciate your advice and comments.

 

Though given the original CA is now terminated through their default how would interest be treated by a court? I do not wish to avoid the debt but would like to avoid the interest or at least have it reduced.

 

Regards

 

Monty

 

unless they have obtained a court order, they are sill obliged to supply a credit agreement on request while any money is due; and an executed copy to enforce it in a court of law. data protection Law (i.e. S.A.R.) remains while they are processing your data.

[reduk054]

Subscribing!

Red

[Monty2007]

Thanks everyone.

I spoke to TS today about Amex's agreements and interest applied following them issuing a default. "Apparently" they (i.e the CCC's) don't have to produce an original agreement since they send one when you open the account?! I asked how could this be verified, the response was by the CCC records, I then asked about having an executed CCA and they said it did not need to be signed by both parties since by using the card you had agreed to their T&C's.

 

I also asked if, having requested disclosure of information under the Data Protection Act if they had to supply an agreement, she said no but I then asked about the Consumer Credit Act 1974 (Sections 77−79) in terms of producing the agreement, she said if you ask them using the law then they can send you a current one. She then told me that she worked for a bank prior to TS and that it only cost 50 p to get a copy!!! I told her it had now gone up to a £1. It suddenly dawned upon me that she knew less than me.....

 

I then asked about the collection of interest following default and they said that it would be in the original agreement/T&C's?! I said I did not have one and that by serving a default notice they had terminated any alleged agreement and any T&C's. The person I spoke to got upset and told me I should send a letter to the CEO of Amex or the FOS.

 

Conclusion; TS are USELESS!

[Monty2007]

Has anyone come across any legal precedent in relation to interest charges following default (terminated CCA)?

 

Plus has anyone actully tested in a court the relevant Act in relation to the provision of an executed credit agreement (i.e. one signed by both parties)? or where a CCC has sought to impose terms of a non-executed CCA?

 

Is it the case that, although you may not contest the debt (since they have your statements and can show you spent the money) that you can contest the interest rates.The Amex T&C's that state they can increase interest rates as they may do so from time to time (theoretically to 10000000 percent!). Are there any unfair contract angles here?

 

I deal with legal commercial contracts as part of my job and employment contracts that are heavily regulated. In both instances the agreements are not valid unless executed and in some cases witnessed. There seems to be a total mess in relation to CCA's? yet I cannot see where any of this has been tested in a court of law?

[tomterm8]

Thanks everyone.

I spoke to TS today about Amex's agreements and interest applied following them issuing a default. "Apparently" they (i.e the CCC's) don't have to produce an original agreement since they send one when you open the account?! I asked how could this be verified, the response was by the CCC records, I then asked about having an executed CCA and they said it did not need to be signed by both parties since by using the card you had agreed to their T&C's.

 

They TS officer is talking bowlarks.

 

I then asked about the collection of interest following default and they said that it would be in the original agreement/T&C's?! I said I did not have one and that by serving a default notice they had terminated any alleged agreement and any T&C's. The person I spoke to got upset and told me I should send a letter to the CEO of Amex or the FOS.

 

They can charge interest between default and judgement. Rights of the IP remain effective, even if the CB has broken the contract.

 

Conclusion; TS are USELESS!

 

Sorry:)

[Chrissielr]

Hi Monty

 

I too have had a long drawn out battle with Amex, although mine was in respect of a charge card which is not subject to a CCA. They froze interest when I first requested it due to personal circumstances.

 

I firmly believe in no CCA = no enforceable debt = no pay, however, I wanted you to know that after 5 years and 5 court hearings it has ended with Amex accepting final settlement of 10% of original debt in manageable instalments. I also explained to the District Judge that a registered CCJ could effect my job (at the time I worked for a BIg 4 and had to sign a "fit and proper" declaration annually) and he agreed not to register the judgement.

 

Re what is actually required of a "copy" CCA - I don't think anyone knows for sure (see the requesting a CCA thread), but I do know that at court Amex produced a copy of the actual charge card agreement I had signed.

 

Good luck!

[Monty2007]

Thank you for your comments tomterm, are they able to charge any interest rate they feel like? what is the basis for the (new) interest rate given that they have terminated the CA through issuing a default?

 

It seems to me that the wording of the standard Amex T&C's appear extreme given that the decision is essentially theirs and is broad and all encompassing "we may chose from time to time to change interest rates at our sole discretion" or words to that effect.

 

Has anyone thought through the approach of challenging through claiming that this is an unfair contract? I recall a judge made a decision on the case on this basis??

[tomterm8]

Thank you for your comments tomterm, are they able to charge any interest rate they feel like? what is the basis for the (new) interest rate given that they have terminated the CA through issuing a default?

 

It seems to me that the wording of the standard Amex T&C's appear extreme given that the decision is essentially theirs and is broad and all encompassing "we may chose from time to time to change interest rates at our sole discretion" or words to that effect.

 

Has anyone thought through the approach of challenging through claiming that this is an unfair contract? I recall a judge made a decision on the case on this basis??

 

The basis is contractual interest. a judge can review the interest rates charged under the contract on the basis of whether they are extortionate. If they repeatedly increased interest rates before and after the agreement with no regard to the changes in base rates, a judge might consider that an agreement that gives them basically the right to charge anything they like for the credit would be extortionate.

 

next year, the unfair relationships sections come into force for existing open credit agreements, and at that point the judge would be able to consider these actions in light of fairness as well as whether the agreement itself was extortionate.

[Monty2007]

But they have cancelled the agreement by issuing a default notice? So what you are essentially saying is that they can terminate the CCA and still maintain the contract provisions (interest rates etc) while I get a default notice?

 

They have also not been able to provide the CCA and just sent their T&C's and said this is the only document that they have to supply?

 

Amex just seem to make it up as they go along, they are also refusing to correspond and I have to go through RMA, however they don't respond at all? My accounts have not been assigned, just "managaged". Has anyone else had this from Amex?

[tomterm8]

But they have cancelled the agreement by issuing a default notice? So what you are essentially saying is that they can terminate the CCA and still maintain the contract provisions (interest rates etc) while I get a default notice? Yes.

 

They have also not been able to provide the CCA and just sent their T&C's and said this is the only document that they have to supply?

 

if they can't supply the executed (i.e. signed) Credit Agreement then they can't enforce any debt entered into before 4/07.

 

Amex just seem to make it up as they go along, they are also refusing to correspond and I have to go through RMA, however they don't respond at all? My accounts have not been assigned, just "managaged". Has anyone else had this from Amex?

Did you send the Credit Agreement request before or after April 7th? if after, I would request a copy of the companies complaint procedure and start formal complaint taking it to the Financial Ombudsman Service if they fail to ackowledge/respond. otherwise, I'd issue another credit agreement request.

 

..

[payingonlyencouragesthem]

I do not wish to avoid the debt

 

 

Why not?

[itsamomentintime]

Why not?

 

 

 

lol

[Monty2007]

Thank you for all your comments and advice.

 

Amex returned my CCA cheque while the DCA cashed it but have also not supplied the CCA. I know from one other Amex customer that they suspended interest payments which is really my objective or to negotiate a lower amount.

 

My understanding is that they can prove that I incurred the debt through (i) providing the statements showing I spent the money on the CC and (ii) have acknowledged the debt through previous payment history.

 

I am not sure as to how I could claim that the debt if not mine?

[tomterm8]

Thank you for all your comments and advice.

 

Amex returned my CCA cheque while the DCA cashed it but have also not supplied the CCA. I know from one other Amex customer that they suspended interest payments which is really my objective or to negotiate a lower amount.

 

My understanding is that they can prove that I incurred the debt through (i) providing the statements showing I spent the money on the CC and (ii) have acknowledged the debt through previous payment history.

 

I am not sure as to how I could claim that the debt if not mine?

 

Assuming this is a credit card / credit agreement, they have no right to enfoce a debt unless they can provide a executed (i.e. signed) copy of the credit agreement with all the prescribed terms.

 

it's not that the debt doesn't exist... they may very well show the statements, but these are irrelevant. They simply have no legal right to enforce payment of the debt, through the court or otherwise.

[Josie8]

Thank you for all your comments and advice.

 

Amex returned my CCA cheque while the DCA cashed it but have also not supplied the CCA. I know from one other Amex customer that they suspended interest payments which is really my objective or to negotiate a lower amount.

 

My understanding is that they can prove that I incurred the debt through (i) providing the statements showing I spent the money on the CC and (ii) have acknowledged the debt through previous payment history.

 

I am not sure as to how I could claim that the debt if not mine?

 

The House of Lords ruled in Wilson v Minister for Trade & Industry that in the event the creditor could not produce a legally executed CCA then they had no other recourse to reclaim the debt. The avenue of ordinary contract law was not open to them. So it matters not whether you have acknowledged the debt or not ...no cca = no money for the lender. They have draconian powers granted to them by the cca I.e. interest rates, defaults etc. If you complain they say its in our T's & C's. So unfortunately for them the penalty for no valid cca = no money.

 

Incidentally they have to provide you with a true copy of the agreement you signed with all documents referred to in it & a statement of account. They can omit signatures and addresses but everything else should be a true copy (i.e have your handwriting on).

[payingonlyencouragesthem]

So why pay when you can CCA:D. That's my motto.

[Monty2007]

Many thanks for the replies, I appreciate your help with this. Incidently I recieved the following from Cambridge Trading Standards:

 

The default notice states that unless you rectify any contractual breach regarding the agreement (usually falling behind in payments) then you will be deemed to be in material breach thereof. Interest is still repayable on the debt as if you had not breached the agreement. The Information Commissioner oversees Data Protection issues. The right to get a copy of the credit agreement is governed by Section 77 Consumer Credit Act and you will need to send the lender £1 and they should provide it within 14 days.

Amex have sent back my cheque and stated that I have their documentation - just a print out of their T&C's! The DCA have cashed my cheque (as per usual in these situations) but sent nothing.

What should I do next?

[payingonlyencouragesthem]

Amex are trying it on. Just don't pay them anything and see what they do. Report back here when they make their next move (preferably using a new thread with a more interesting and eye catching title:D)