Is My Agreement Enforceable - Useful

[Redfish]

Hi there,

 

I wanted the experts advice on the best way I go about finding out if my debts are enforceable?

 

I have been reading through many threads on this forum for the last few days and have read so many discoveries, but as people have discovered new things over time I wanted to clarify some things. We have debts with Abbey Credit Card, MBNA, Virgin, Barclaycard and Egg and we're really struggling.

 

Please let me know if this is the best procedure I should take:

 

1. Send off CCA letters quoting s78 to each of the creditors.

 

2. Wait for 14 days (12+2). If they don't reply with a true copy of our agreement they are in default and cannot enforce the agreement without going to court; they also cannot assign the debt to a DCA as the debt is in dispute. I can now stop my direct debit payments to them and issue them a notice explaining that.

 

3. If they still don't produce the agreement one month later they have committed a criminal offence. I can now ask my bank to repay me anything these creditors have taken from me through the Direct Debit Guarantee promise as they obtained these payments through deception (deception being that they claimed they had a legal right to take money from my account when they didn't).

 

Am I right in believing that also

 

a) A signed application form is not counted as a properly executed agreement as it refers to a potential future agreement rather than a present day agreement.

b) All T&Cs must be contained within one document and not refer beyond the document to further T&Cs?

c) Am I also right in believing that nowadays many of the lenders have been alerted to their faults in not following the correct procedures for loans and are now attempting to tamper with documents to fabricate a properly executed agreement? If so would it be wiser to start with a Subject Access Request first (so that they don't get wind of the fact they have no proper agreement as they are busy collecting all the information they have to send) - and only then follow up with a CCA s78 request if I notice they don't have a properly executed agreement?

 

Also, if I find my agreement is enforceable, how do things stand with s85? If lenders did not send a copy of the signed agreement when issuing new credit card replacements, do they forfeit profits over that time? Does that mean they have to pay back all the interest and any penalties they have been charging?

 

I know you may have been asked these questions before, but it seems that what was talked about in late 2006 is not quite the same as what is being talked about in early 2009 - so obviously there have been discoveries and legal cases clarifying things, as well as amendments to the law/fightback from the lenders.

[Redfish]

Hey Shadow, thanks for your response to each of my points...very useful! In particular your opinion: "Most of the lenders will not respond to a s77/78 request with an application/agreement now, you will either have to get it via a Subject Access Request or via the CPR method." It's very valuable to learn how things have changed in terms of what we might expect, to what the ground realities are now. I really appreciate this insight.

 

I started learning about all this from a great thread which began in 2006, read the first 50 odd pages and got exhausted!! Couldn't read through all the 170 pages to find out how things unfolded, instead jumped to present day where posts and advice seemed so different...so I was wondering if it all was a pipe dream...though I did read a lot of success stories. Good to be brought into today's picture of what I might have in store for me, and how best to tackle it from the outset (psychologically as well as practically).

 

Cheers!

[Redfish]

John, I can see your details, you need to go over with the black marker a few times!

 

Check your sums, if they are charging you interest on the loan protection insurance then this agreement is unenforceable. It looks like they may have lumped it all together and then charged interest on the whole, in which case this is exactly what they shouldn't have done. See the judgement on Spurway as well, they should have used the term 'Amount of credit' to separate out what amount is actually being given to you on credit, they have only used the terms 'loan', 'cash loan' and 'total loan' which the Spurway judgement says is not sufficient.

[Redfish]

NP you may well be right there, let's see what others say.

[Redfish]

You mean they can because they can get away with it?

 

If you look at the link to my scans in my thread below, the calculations are wrong. If they add the PPI into the loan and charge interest on the whole shebang, then the total amount of credit offered is incorrect! That is what the judge mentioned in London North Securities Ltd v Mr.

 

My thread: http://www.consumeractiongroup.co.uk/forum/payment-protection-insurance-ppi/210160-ppi-amalgamated-into-loan.html#post2300718

 

Thanks, Dipply, for bumping my link again.

 

I'm no expert, but maybe the Meadows case is judged that way because the PPI was not optional??? It could be that if it is not optional it becomes a charge for credit, and therefore should not incur interest. There seems to be an issue at stake in the Meadows judgement about whether it was optional or not.

 

Anyone care to comment?

[Redfish]

'The judge declared that the agreement was unenforceable under Section 127(3) of the Consumer Credit Act 1974 because the mortgage arrears and insurance policy were within the total charge for credit'

 

Yes, he is. Or am I being thick? The fact that the initial court ruled on it must mean that it is contentious to lump in the PPI within the full term of the loan.

 

 

FlyboyAgain, if I understand right, it is contentious to lump in PPI with the loan and charge interest on it all if the PPI was not optional.

 

I think the point N.P. was making (correct me if I am wrong N.P.) was that in that particular case you mention the insurance could be classified as a 'cost' for the credit because it was not optional. The Act says that you cannot charge interest on something that is a charge (cost) for the credit, even though you are paying that back over a period of time.

 

BUT where the insurance is optional it can't be classified as a cost for the credit, as it would be seen as something you chose to buy with the money you were borrowing. So this would mean that they could charge interest on it.

 

But as N.P. has also noted, in the case for an optional PPI, it should really be laid out as two separate parts in the agreement, each with their own prescribed terms: the main loan as one part being an unrestricted use credit and the PPI as another part being restricted use credit. HOWEVER I think Bradley Say has lost a recent court case based on this multiple agreements issue (dividing an agreement into parts and insisting each part should have its own prescribed terms), so it might be that this bit on PPI being considered to make the agreement a multiple agreement depends on the judge whether they would see it like that.

 

Going back to the issue of the cost for credit, this is why an admin charge is definitely a cost for the credit, not something you can say you had a choice in taking on or not. So if you had an admin charge that was lumped in with the total credit and interest was charged on it then it makes the agreement unenforceable as per the Wilson case.

 

I hope that's what you were saying N.P.??

 

So IF I AM RIGHT, that means on your agreement FlyboyAgain, that particular argument about unenforceability due to the inclusion of PPI in the total amount of credit rests on whether it was optional or not. If it was optional and you opted for it then you wouldn't have a case for unenforceability (on that point). But if you had an admin charge in there which was being lumped in with the rest of the loan and interest was being charged on all of it then it would make the agreement unenforceable.

Edited July 22, 2009 by Redfish

[Redfish]

The admin charge is lumped in with the loan; it is part of the total repayment.

 

Well that's all you need! If that's so, and you are paying interest on it, then your agreement is unenforceable. See First County Trust v Wilson.

 

How can the PPI be classified as a cost, whether it is optional or not?

 

If it's not optional then it means you couldn't have the loan without this 'cost', i.e. it was a cost pretending to be something nice (like insurance), when in fact it was just a plain old cost that wasn't necessary - just feeding the greed of the lender. Insurance should be optional - that is why N.P. says when it isn't optional it can also be pursued under mis-selling.

 

Reviewing this case with my wife - who has a better memory than I - we had to accept the PPI and have the loan tied to the house, as security. That was a stipulation of the bank at the time.

 

If you had to accept the PPI then it was not optional and therefore should not have been lumped in with the loan and charged interest, but even if you find it difficult to prove that, you already have the case with the admin charge being added in so it doesn't matter. Your agreement is unenforceable.

[Redfish]

Of course your not, none of us are, not

 

Who cares? A shady agreement is a shady agreement. It`s irresponsible lending on their part.

 

It was different when they used to bombard us all with Loans and Credit Cards, and hammer us with extortionate charges to make a quick buck for the fart arse at the top in his big house with a big telly on the wall.

 

I say bomb them all, lets go back to the days of pay in hand, instead of in the Bank, only to find half of it gone in charges.

 

I'll second that !!!

[Redfish]

Also no credit limit in the agreement which IS a prescribed term but can that be stated as we will advise you of the credit limit instead and be valid?

 

Captain2, you can argue this renders the agreement unenforceable, see my comment here. http://www.consumeractiongroup.co.uk/forum/legal-issues/188093-egg-credit-agreements-what-59.html#post2406581

[Redfish]

Can anyone advise if/how this affects CCA unenforceability claims?

 

 

http://business.timesonline.co.uk/to...cle6868968.ece

 

 

https://www.eversheds.com/uk/home/ar...ements_07Oct09

 

Thanks for posting these Chickenboy. I see that Eversheds are solicitors acting for banks, so it would be best to get a copy of the judgement for us to see ourselves what the judge did or did not say. This is the judgement: http://www.judiciary.gov.uk/docs/judgments_guidance/mcguffick-v-rbs.pdf

[Redfish]

Just having a quick read through of that judgement, McGuffick vs. RBS. I really don't understand why the CMC brought such a poor case as a test case - even they accept that the agreement was a valid and properly executed agreement.

 

In this case, after borrowing the money, the consumer had never personally paid anything on the debt, two years later the CMC made a CCA request and the bank could not provide a copy of the agreement in the prescribed time. Later the agreement was found and sent, and was accepted as properly executed by both sides. Why would anyone be so stupid as to still take such a case to court and make it a test case???

 

The CMC took the case to court to test what unenforceability would mean if the full requirements of s. 77 CCA request had temporarily not been met. The argument was weak because it was not a case of unenforceability because the agreement was irredeemably unenforceable. But nevertheless the judge went on to define what might or might not be classified as 'enforcement'.

 

The case goes on to establish whether reporting the debt to credit reference agencies amounted to 'enforcement' while the consumer claims a debt to be unenforceable (even only temporarily unenforceable). The judge seems to have accepted that reporting the debt to a CRA is more about banks sharing information to 'promote responsible lending' (yes the banks' solicitors have mastered the persuasive art of using currently fashionable language to their advantage), rather than CRA reporting being necessarily about 'enforcement'.

 

Who knows if a better case might have been argued more convincingly and with appropriate evidence to show the motive for reporting to a CRA was one of blackmail or coercion.

 

The judge noted that the consumer had a recourse because he could ask the CRA to record against the entry that the agreement was unenforceable and the CRA would have to add this to the record or give legitimate reasons why it could not to the Information Commissioner.

 

Following on from that the judge also deemed it was alright for banks to send letters demanding payment, pass the debt on to other agencies for collection, telephone calls etc. He classified all these as taking steps with a view to enforcement, not enforcement itself (just like taking action to bring the case to court), and therefore permissible. Basically, my understanding of this is, the bank can try to get you to consent to paying them the debt by these methods, but they can't grab your possessions or money.

 

I think this case undermines the CMCs because they were more proactive, trying to establish that banks could not ask for the repayment of debts. But for us caggers, we are more reactive, most of us wait for the banks to take us to court, or to try and settle out of court, or to write off the debt because they haven't got the resources to keep chasing. Most of us have lived with the bad credit record, the telephone harrassments and threats of court action until it is statute barred or the banks give up chasing because of exhaustion. So nothing changes for us. If an agreement is unenforceable, it is still unenforceable, it means they can't take our homes, our money, our possessions without our consent - all they can do is keep asking and hope one day we might cave in and consent.

 

That's my understanding after reading the test case, but I am not an expert - so I welcome any other views that might enlighten us further.

 

Just tried to post this on the test case thread but realise a lot of people have been arguing (quite ungraciously) over opinions on this judgement already on that thread, so that thread is closed!

Edited October 28, 2009 by Redfish

[Redfish]

simply

 

where a fully executable agreement exists and is not disputed- the reporting of information to CRA's is not considered enforcement

 

the judge made it clear that this was a very narrow case and the judgement could well be different in different circumstances

 

so UNLESS you have a valid agreement and are seeking to have your credit record expunged- it means diddly squat!

 

:-D:-D:-D

[Redfish]

Just wondered; if a creditor finds the original agreement isn't enforceable because it does not have the correct proscribed terms or whatever, then what is to stop them altering the document to add the correct terms to make it enforceable?

 

Nothing stops them altering the agreement, but you can ask them to prove this is the original agreement in court. If they are clever enough to make something look like it is the original, you can still question them on anything that gives the game away...they are usually not clever enough to have a faultless agreement even when they have tried to tamper with it.

 

They cannot present a reconstituted agreement if they have varied the terms since (which they will have done). Also if your defence case rests on the doubt that these actually are the terms of the original agreement they would have to present the original agreement to prove it.

Edited March 27, 2010 by Redfish

[Redfish]

Agreed GH, no Total Amount of Credit, clearly unenforceable...there's no way it's clear to an ordinary consumer how much they owe in full.

 

Nothing about variation, but have they in fact varied it? If they haven't then it's not an issue, if they have then it is an issue.

[Redfish]

Hi I am challenging my credit card agreements and I have applied for my CCA's from MBNA, Mint & Citi.

 

Citi did not send my cca within the 12+2+30 and I refered them to the ombudsman - they are still requesting my monthly payments which I am witholding - they say, "since the recent court case" ? That I am not allowed to withold my monthly payments despite being in dispute with them ?? Is this true ? Any advice ??

 

MBNA have sent me a copy of my application form - this also says underneath, "Application Form Credit Agreement Regulated by the Consumber Credit Act 1974 - How to Apply", as does my Mint application form - are these the specified documents that they are supposed to supply me with ? or do I have a case for them failing to supply me with a signed credit card Agreement ?? advice would be very welcome Thanks Mike

 

Firstly, I don't think you'll get much joy from the Ombudsman...they don't consider what the law says, they even admit that themselves, and many people here have found they even side with the banks.

 

Secondly, you only needed to wait 12+ 2, not 12+2+30 - before it was the case that after 30 days they would have committed an offence, but that provision has been repealed.

 

Thirdly, the recent court cases they may be referring to are the Waksman and Carey judgements. Even though they are legally obliged to send you your agreement and they are in breach and can't enforce the debt if they don't, they can still harass you for payment as this harassment was not regarded by the judge as 'enforcing' the debt and therefore it was considered okay. He also stated that they can also put a negative record on your credit file. You will have to be okay with both the harassment and your credit rating being affected if you want to challenge them.

 

It sounds like you have application forms and this is usual with MBNA, they often don't have agreements and try and tart up an application form to look like an agreement. Check if there are any prescribed terms included, even if there are, check that this isn't an application form with terms cut and pasted onto the side or back to try and make it enforceable. This kind of photoshop job is very common with MBNA. Best to scan it blank out the personal details and post it up for people to comment.

 

Basically lenders will try anything to scare you and get you to pay up. You can't reason with them. Just do the homework to ascertain whether what they've sent you is enforceable, and if it isn't, then just sit tight and wait it out.

 

BTW I have an MBNA application form which they've stuck terms onto, but a deeper investigation shows clearly that those terms don't match the current terms they have sent, and the application form itself doesn't match the current terms either. They eventually shot themselves in the foot by sending out a default notice and terminating the account - the contents of the default notice gave even more ammo to this argument and was in itself faulty...so they're stuffed.

Edited April 20, 2010 by Redfish

[Redfish]

After 2 years of trying to get copy of CCA having been asked for copies of my signature and recieving serious harrasment and unfounded threats to make me bankrupt.

 

My rep now tells me of a change of law saying that they don't need it anymore to enforce debt is this true.

 

stressed again

 

OSW :-?

 

Certainly not true, they do need to have an enforceable agreement! There was a recent ruling which made it possible for lenders to send you a reconstituted agreement (not the original) in response to your CCA request, but it also confirmed if they have varied the agreement (most of them have varied it, interest rates, charges etc), then they have to send you a copy of the original.

[Redfish]

Hi

 

I am not sure how it works in the financial sector, but I have had experience of groundless threats in a trademark dispute against my company - there is a legal response you can make which is that to make groundless threats against a company or individual is in itself an offence and that they should "cease and desist form making those threats".

 

This was the basis of a recent test case, to rule that harassment was illegal, but unfortunately the consumer lost out on that issue, the judge ruled that this was ok. If you're interested do a search on this site for McGuffick, and you'll find out about how that test case worked out.

Edited April 20, 2010 by Redfish

[Redfish]

Thanks Red Fish - this has been going on so long -

 

You have relieved me this site is definatly my guardian angels

 

I'll post again tomorrow after the call to rep which I AM DREADING not very ascertive anymore (I don't know if thats spelt correctly:oops:

 

OSW

 

If your 'rep' is a Claims Management Company then they are probably trying to get out of refunding your money ... if you haven't paid them then get rid of them, they'll do you more harm than good. These CMCs lost out in a test case because it was shown that they could not take the lender to court to write off the debt - the CMCs wanted quick money. But if you are not paying the debt then the onus is on the lender to prove the terms of the debt by producing the agreement. You can't take them to court and expect to win. But they will find it impossible to enforce the debt (they can only harass you), unless they can produce the original agreement and it has to have all the prescribed terms correct.

 

This is the wording from the actual judgement that you can ask your rep to refer to - about the need for lenders to provide a copy of the original agreement in response to a s.78 CCA request if the agreement has been varied:

 

Citing HHJ Waksman QC in Carey v HSBC, 23 December 2009, when an agreement has been unilaterally varied “Reg. 7 requires a copy of the executed agreement in its original form as well as a statement of the terms as they are at the time of the request”.

 

Remember that most agreements have been varied - the lender has altered the interest rates, or altered the charges. If your account goes back before 2007 then there is every likelihood that the agreement will have been varied.