Are banks obliged to provide a CCA for an OD facility?!

[Fred_Funk]

Was hoping someone might be able to advise my whether I'm within my rights to ask NatWest for a copy of the CCA relating to my overdraft?

 

I've just read somewhere that a bank should be able to provide a properly executed credit agreement for any overdraft facility. Unfortunately, there are so many conflicting viewpoints on here nowadays that I'm just seeking some reassurance this is the case before I get too excited.

 

I'm about to issue a court claim for unlawful charges and had pretty much resigned myself to the fact that should I be successful, a significant part of my claim would go towards offsetting my overdraft.

 

However, I'm now led to believe that without a properly executed CCA this debt is unenforceable.

 

Given I have no recollection of ever having signed anything, this is an avenue I'm keen to pursue - if, that is, someone can confirm that it is indeed the case.

 

Over to you guys!

 

Thanking you in anticipation of your help and co-operation

Fred_Funk

[ian1969uk]

Hi, there is no obligation for the bank to have a credit agreement for an overdraft facility. Overdrafts are not covered by Sections 77/78 of the CCA 1974.

[Peterbard]

hI

This is something that UNI and I have gone over on the CCA thread.

But ballically section 74 of the act says that any overdraft is exempt from section v of the act and there fore does not need to have an agreement to oppperate. Since there is no agreement there is nothng to send on your CCA request.

The bank account itselfis not covered by the CCA but regulated by the FSA.

Now there is a section of the Act that says that any agreement encompassing a regulated agreement must be suplied on request.THe bank is not prone to the actions of the cca if they do not comply but you can report them to the FSA for not doing so.

 

Best regards

Peter

[Fred_Funk]

ian1969uk

 

May I ask, on a scale of 0-10, how certain are you of that?! ;-)

 

I dare say you're right but, certainly, on other threads people - and people who appear to know what theyre talking about - have argued that this is not the case.

 

As a mere mortal, I have no idea who to believe. Hence my reason for starting this thread.

 

Fred_Funk

[Fred_Funk]

hI

This is something that UNI and I have gone over on the CCA thread.

But ballically section 74 of the act says that any overdraft is exempt from section v of the act and there fore does not need to have an agreement to oppperate. Since there is no agreement there is nothng to send on your CCA request.

The bank account itselfis not covered by the CCA but regulated by the FSA.

Now there is a section of the Act that says that any agreement encompassing a regulated agreement must be suplied on request.THe bank is not prone to the actions of the cca if they do not comply but you can report them to the FSA for not doing so.

 

Best regards

Peter

 

Thanks for that. I see, I think, where you are coming from.

 

Will now endeavour to locate the CCA thread on which you and UNI have contributed in order that I can have a good read.

 

In the meantime, can you advise me of the likely consequences if I ask NatWest for a copy of the regulated agreement and it fails to comply?

 

Thanks again

Fred_Funk

[stebiz]

http://www.consumeractiongroup.co.uk/forum/general-debt/87855-overdraft-cca.html?highlight=overdraft

 

Interesting.

 

Stebiz

[stebiz]

The s74 determination in respect of bank overdrafts (see Q1.4) applies subject to the following conditions:

· the creditor must inform the OFT in writing of his general intention to enter into such agreements;

· the debtor must be informed, at or before the time an agreement is concluded, of the following:

o the credit limit (if any)

o the annual rate of interest and any charges applicable, and the conditions under which these may be varied

o the procedure for terminating the agreement;

· the above information must be confirmed in writing.

Have you got written confirmation?

 

Stebiz

[rory32]

From the Consumer Credit Act 1974:

 

Facts. The manager of the C Bank agrees orally with D (an individual) to open a current account in D’s name. Nothing is said about overdraft facilities. After maintaining the account in credit for some weeks, D draws a cheque in favour of E for an amount exceeding D’s credit balance by £20. E presents the cheque and the Bank pay it.

Analysis. In drawing the cheque D, by implication, requests the Bank to grant him an overdraft of £20 on its usual terms as to interest and other charges. In deciding to honour the cheque, the Bank by implication accept the offer. This constitutes a regulated small consumer credit agreement for unrestricted-use, fixed-sum credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a determination under section 74(3).

 

Facts. F (an individual) has had a current account with the G Bank for many years. Although usually in credit, the account has been allowed by the Bank to become overdrawn from time to time. The maximum such overdraft has been is about £1,000. No explicit agreement has ever been made about overdraft facilities. Now, with a credit balance of £500, F draws a cheque for £1,300

 

Analysis. It might well be held that the agreement with F (express or implied) under which the Bank operate his account includes an implied term giving him the right to overdraft facilities up to say £1,000. If so, the agreement is a regulated consumer credit agreement for unrestricted-use, running-account credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a direction under section 74(3). It is also a multiple agreement, part of which (i.e. the part not dealing with the overdraft), as referred to in section 18(1)(a), falls within a category of agreement not mentioned in this Act.

 

Facts. Under an oral agreement made on 10th January, X (an individual) has an overdraft on his current account at the Y bank with a credit limit of £100. On 15th February, when his overdraft stands at £90, X draws a cheque for £25. It is the first time that X has exceeded his credit limit, and on 16th February the bank honours the cheque.

Analysis. The agreement of 10th January is a consumer credit agreement for running-account credit. The agreement of 15th-16th February varies the earlier agreement by adding a term allowing the credit limit to be exceeded merely temporarily. By section 82(2) the later agreement is deemed to revoke the earlier agreement and reproduce the combined effect of the two agreements. By section 82(4), Part V of this Act (except section 56) does not apply to the later agreement. By section 18(5), a term allowing a merely temporary excess over the credit limit is not to be treated as a separate agreement, or as providing fixed-sum credit. The whole of the £115 owed to the bank by X on 16th February is therefore running-account credit.

 

Facts. The G Bank grants H (an individual) an unlimited overdraft, with an increased rate of interest on so much of any debit balance as exceeds £2,000.

Analysis. Although the overdraft purports to be unlimited, the stipulation for increased interest above £2,000 brings the agreement within section 10(3)(b)(ii) and it is a consumer credit agreement.

Statute Law Database

[Fred_Funk]

rory32 et al

 

Thanks for your input. However, I'm still not entirely clear: are banks obliged to provide a CCA for an OD facility?!

 

Fred_Funk

[rory32]

In most circumstances, yes they are but it will be a looser document than for a credit card or loan.

[Laughing Boy]

Hi,

 

I am in the process of changing banks and as stated by Rory the agreement I signed for my arranged OD on the new account was a looser document. The previous Bank I don't remember signing anything (6 years ago), but they are constantly ringing to transfer it to a loan ?

[stebiz]

Reading this it appears that it is covered by the consumer credit act but

since overdraft facilities are excepted from having to comply with the documentation requirements of the Act.

Francis Bennion - Law - 1999.029 'Addendum re multiple agreements'

 

Stebiz

[stebiz]

There are two further, highly specialised, types of exemption which can be granted by

the Office of Fair Trading from, among other things, the rules on form and content of

agreements. A general exemption has been granted for the Bank of England, other banks

and licensed deposit-taking institutions, in respect of their arrangements for providing

overdraft facilities on current accounts.

 

http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft019.pdf

 

Stebiz

[rory32]

Hence my previous statement that it is a looser document Stebiz.

[stebiz]

Agreed - just thought I'd add 'some meat to the bones'

 

Stebiz

[stebiz]

I'm actually wondering what part of the Consumer Credit Act they need to adhere too - if they are exempt from the above. I will delve a bit further.

 

Stebiz

[Laughing Boy]

It also says,

 

"Any qualifying organisation intending to take advantage of the exemptions must notify the OFT in writing. This intention will then be included in the appropriate entry in the consumer credit public register"

 

So who is on the register?

[stebiz]

It also says,

 

"Any qualifying organisation intending to take advantage of the exemptions must notify the OFT in writing. This intention will then be included in the appropriate entry in the consumer credit public register"

 

So who is on the register?

 

Yes I notice that but assumed automatically that the banks would have. Perhaps I shouldn't have. I'll check this out.

 

Stebiz

[rory32]

To search the public register, telephone 020 7211 8608 between 9.30am and 4pm Monday to Friday.

[Laughing Boy]

Hi,

 

Heads or Tails,

Clutching at straws or Mad rush to register

[Fred_Funk]

rory32

 

Okay, I appreciate it's a 'looser document' but, be that as it may, should the bank be unable to provide a copy of it then is it unenforceable?

 

And what from should my letter my asking for a copy of this document take? Would a SAR be appropriate?

 

Fred_Funk

[Fred_Funk]

hI

This is something that UNI and I have gone over on the CCA thread.

 

Can anyone point me in the direction of this thread? I don't doubt it's here somewhere but I've tried searching for it to no avail. Cheers.

 

Fred_Funk

[Laughing Boy]

Hi,

 

Its very very long, you may have to do a search!

 

Consumer Credit Act Agreements

[rory32]

Okay, I appreciate it's a 'looser document' but, be that as it may, should the bank be unable to provide a copy of it then is it unenforceable?

 

Yes.

 

And what from should my letter my asking for a copy of this document take?

Just use the CCA template letter and enclose a £1 postal order. The template is here http://www.consumeractiongroup.co.uk/forum/general-debt/20758-creditors-dcas-letter-templates.html template N.

[Fred_Funk]

Thanks guys. Using template N would it be better to refer to my overdraft agreement - as opposed to credit agreement - so as to avoid any confusion as to precisely what it is I am asking for?!

 

Once again, thanks in anticipation

Fred_Funk