Unenforceable Credit Agreements

druss

Soubrette wrote: »

Like dunstonh says - unforceable does not mean it disappears and I don't understand why the advertisements can say this

Sou

Unenforceable does not equal a cancelled debt.

HOWEVER

If the case were to go to court then the judge would order a removal of the debt.

Most lenders will back down prior to a court case (as often court costs and legal fees are often more than the value of the debt) and get clients to sign a non disclosure agreement as part of the write off.

This is why there are so few success stories out there.

There are a couple of stories that have slipped through the lenders media blackout, usually where the lender has taken the borrower to court for non payment.

The unenforceable legal arguement was used as a defence.

Bank of Scotland vs Mitchell - 3rd June 2009
A Wetherby man has had over £15,000 of credit card debt written off after Bank of Scotland backed down minutes before the case was due to be heard in a Leeds court.

Judge Langham at Leeds County Court believes that the bank didnt fight the case because it feared highlighting failings and opening the floodgates to further claims.

Self-employed Mr Mitchell, 60, had a judgement against him after delaying payments to his credit card while he waited for the bank to supply specific information that he had requested on a number of occasions.

His case was won on an appeal that his credit card application didn't contain the prescribed terms and conditions and therefore didnt comply with the Consumer Credit Act.

The Bank of Scotland argued that the terms and conditions had been given as a separate document when Mr Mitchell applied for the card at the Wetherby branch of Halifax, but he denies ever receiving them.

However, under the law, a credit agreement is only binding if it is a single document that has been signed by both parties and contains all the prescribed terms.

Although the Bank of Scotland gave up its fight and agreed to write off Mr Mitchells debt, amazingly they refused to pay his costs.

However, as a final blow to the lender Judge Langham ruled that the bank needed to pay all the costs in full and said that the bank was trying to shy away from highlighting this issue.

druss

Now as to the claims companies.

With the help of consumer action group and other websites you can apply for documents yourself, they will the assess these documents for you. But they wont take the case to court.

If you are going to use a claims firm ensure that:-

They hold a valid ministry of justice licence and consumer credit licence.

Most important is check to see if the process includes having a solicitor litigate (go to court), otherwise they will just write to the lender asking them to write off the debt.

ie We think the agreement is unenforceable please write the debt off.

Lenders response - No

The only way forward is the court system or possibly a negotiation outside of court for a reduction.



If they make claims that

The process only takes a month
Success is guaranteed.

Run away as fast as you can.


As to paying fees for the service my take is this:-

If the service you are offered includes legal representation to litigate via the court system a small upfront fee to cover some of the costs is not unreasonable. In fact if you wanted to get a solicitor to represent you you would probably pay more than the fees many cmc's are charging.

Check you will get a refund if when reviewed the agreement is found to be enforceable.

If the service is just for an audit then dont pay anything, you can do this yourself with help from the CAG forum.

Do not pay large fees to the firms if they are successful, these can be avoided!

The process of taking to court will take 9-12 months if not longer as lenders will drag there heals.


Questions for you


Preparing for a court case and representation will cost a solicitor roughly £1500, would they do this for £300 if they thought they had little chance of winning and getting costs awarded?

A solicitor will take out after the event insurance to cover themselves and the client if they did lose in court, this pays the lenders legal fees. Would an insurance company grant ATE insurance if there was no legal arguement for the cases ( They would be liable for thousands of pounds in costs on each and every case)?

dunstonh

I am able to provide you with am email with iriputable proof that some pre April 2007 Credit card , loans and O/D can be unenforcable and written off

We all know some are. However, its far less than many claims companies are advertising. Statistically, the odds are against you.

rog2

valcor wrote: »

I am able to provide you with am email with iriputable proof that some pre April 2007 Credit card , loans and O/D can be unenforcable and written off

Nobody doubts that, and I am glad that you say 'some' pre April 2007 consumer credit agreements can be proven irrefutably to be unenforceable.

My 'issue' is that many of these 'companies' are insinuating that all pre 2007 agreements are intrinsically flawed, thus rendering them unenforceable. This gives the 'debtor' false hope and he is all too easily 'duped' into handing over a hefty and usually non-refundable deposit without being made aware that his agreement may, in fact, be perfectly compliant and, therefore, fully enforceable.

Now IF a debtor has reason to believe that his 'agreement' may be flawed, that 'debtor' can, on payment of a £1 Statutory Fee, easily request a copy of the consumer credit agreement without the need to resort to the 'services' of one of these 'companies'. There are template letters freely available - both on this site and from the Debt Counselling Charities - for example National Debtline:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=getting_a_copy_of_your_credit_agreement_and_account_details

What happens after the debtor has submitted his/her request, along with the Statutory £1 fee, will depend on the response of the creditor/dca:

• If the Creditor/DCA fails to provide a copy of the original executed consumer credit agreement within 12 working days of receipt of the debtor's request, then the Creditor/dca is 'in default'. Whilst the creditor/dca remains in default he can, no longer enforce the agreement, without the permission of the courts - the Courts would, on seeing the defencence of the 'debtor' normally require the Creditor/dca to explain exactly why he did not meet his legal obligations under The Act. The Court can, and should, declare the agreement to be 'irrideemably unenforceable' - period.
• If the Creditor/dca does provide the debtor with a cca, within the legally prescribed timeframe, then the 'debtor' can easily check the 'agreement' to see if it is, in fact, compliant, by either checking against the 'Prescribed Conditions' that can be found on this site or, if the 'debtor' is unsure, by talking to one of the Debt Counselling Charities.

If the agreement is found to be flawed it may, indeed, be legally unenforceable and the 'debtor' has a legal right to refuse to make further payments - this may, or may not, involve threats of legal action by the creditor/dca and, in some instances, actual litigation (although as previously mentioned this rarely happens). Any 'debtor' who wishes to pursue this course of action should prepare themselves properly by quoting the relative cases, as not all district judges will be 100% familiar with Consumer Credit Law and could be swayed by the creditor/dca who will, almost inevitably, quote cases which found in favour of the creditor - even though the judgements were, later, ruled as flawed, on appeal. The DFW board contains references to the relative cases (Cost £zero). When presented with irrefutable evidence, the Court should again judge the agreements as irrideemably unenforceable and that, by failing to comply with the conditions of the Consumer Credit Act, 1974, the creditor has, in effect, 'gifted' the money to the 'debtor' and the 'debt' should be written off.

However the vast majority of cases, that we see on the DFW board are not from people who wish to take advantage of 'flawed' agreements in order to get debts written off. Most have genuine issues - whether with the original creditor or with a dca who is fleecing them through the addition of unlawful charges - and the 'cca request procedure' is a very important 'tool' to help them 'deal with their debts' - the provision of a true and compliant cca can assist greatly when entering into a Debt Management Plan.
On the other hand, if a creditor/dca is unable to provide the debtor with a true and compliant cca, then this puts the 'debtor' firmly in the driving seat - of course some debtors will say 'no cca - no debt' but many will also see the situation as more favourable when it comes to negociating lower payment schedules or making 'full and final settlement offers'.

Either way, there really is no need to go to a 'fee charging company' - you just need patience, realistic expectations and sites like this and the Consumer Action Group.

Oh and, of course the £1.00 Statutory Fee.

rog2

Rallydriver wrote: »

Whats to stop these companies that are taking a big up front fee from suddenly being liquidated with all the assets moved abroad?

As the Law stands - very little.

micchaeljohnuk1

I can confirm today I have received a letter from RBS confirming their agreement is unenforceable. However, they would like me to pay!

while admitting they cannot enforce the debt in court, they say if I do not pay they will issue a default notice on my credit record.

This is 100% genuine, I have been chasing this for over 12 months and now got the result I wanted.

natweststaffmember

micchaeljohnuk1 wrote: »

I can confirm today I have received a letter from RBS confirming their agreement is unenforceable. However, they would like me to pay!

while admitting they cannot enforce the debt in court, they say if I do not pay they will issue a default notice on my credit record.

This is 100% genuine, I have been chasing this for over 12 months and now got the result I wanted.

If you go to the debt free wannabe board and there is a thread on unenforceable credit agreements. Never in doubt is the username who can advise you on this one.

nottoolate

this one?

https://forums.moneysavingexpert.com/discussion/2305463

Paul_Herring

micchaeljohnuk1 wrote: »

However, they would like me to pay!

I don't really blame them.

while admitting they cannot enforce the debt in court

Loophole ahoy!

they say if I do not pay they will issue a default notice on my credit record.

As they are entitled to.

This is 100% genuine, I have been chasing this for over 12 months and now got the result I wanted.

You actually wanted a 6 year default on your credit report for not repaying money you borrowed(+ interest)?

Whatever.

I'd rather pay it off and be able to get credit elsewhere before 2016.

natweststaffmember

nottoolate wrote: »

this one?

https://forums.moneysavingexpert.com/discussion/2305463

That's the one that will help the OP.