Unenforceable Credit Agreements

NickX

UNDERGROUND wrote: »

Just out of curiosity, does anyone have any evidence that the whole un-enforceability thing has paid off for anyone? i.e. any court successes, precedents set, personal experiences?

I know of cases of success with the "unenforceability" argument, one involved debts of around £83k being written off.

The case did not go to court, it was more geared around disputing the debts with the creditors on the basis that they were unenforceable and they had no legal right to requesting repayment. In every case, after a protracted period of negotiations, the creditor would agree to either write the debt off completely or offer a "Full and Final" settlement at substantially less than the amout outstanding on the account. It would appear that they would rather take the hit on writing off substantial amounts rather than risk it going to court and getting thrown out because the debt is legally "unenforceable".

Naturally the lenders are not going to agree to this immediately and it tends to require input from a legal professional, but once they know you mean business and know your rights, and their legal team has indicated that the debt is "unenforceable" there is not a lot more that they can do apart from right the debt off.

Also, if they have effectively admitted that the debt was unlawful then they would be obliged to remove any negative feedback from the debtor's credit file. So, in essence, I do fully believe that it is possible for the canny debtor to walk away with the debts written off and a clean credit file. It is not a quick process though and for sums approaching £100k it would take many months of negotation and litigation before a settlement was finally agreed.

System

Thanks NickX.

I have previously been over to CAG and had a browse around but all the cases I've looked at are still in-process.

I'm amazed that with such vast sums being written off this issue hasn't received more media attention.

Would still be interested to hear from individuals about successes or if anyone has found any media articles documenting successes.

I'm not interested in this because I wish to carry out the process, I'm interested because I read so much debate on the subject but see nothing of the successes / failures / associated problems from people that have decided to take the plunge.

Regards
UNDERGROUND

NickX

UNDERGROUND wrote: »

I'm amazed that with such vast sums being written off this issue hasn't received more media attention.

Well the most famous case was that of the Rankines.

They managed to get £100k worth of debts written off, but they then pushed for more and decided to take some of their Creditors, who hadn't written the debts off, to court. Basically their successes went to their heads and they got greedy.

In the courtroom the judge realised what they were doing and, although the debts were deemed unenforceable, he insisted that the Rankines paid all the legal costs, ironically around £100k, leaving them back to square one.

Going to court is going to be a very risky course of action, but it would appear certainly for smaller debts the Creditors will not want to go to court and will eventually either write the debt off or suggest a "Full and Final" settlement.

I know Proliant will be reading this, and to clarify I am not supporting this process in anyway or recommending that people should do this, I am simply stating the facts as I have seen them.

PROLIANT

NickX wrote: »

Well the most famous case was that of the Rankines.

They managed to get £100k worth of debts written off, but they then pushed for more and decided to take some of their Creditors, who hadn't written the debts off, to court. Basically their successes went to their heads and they got greedy.

In the courtroom the judge realised what they were doing and, although the debts were deemed unenforceable, he insisted that the Rankines paid all the legal costs, ironically around £100k, leaving them back to square one.

Going to court is going to be a very risky course of action, but it would appear certainly for smaller debts the Creditors will not want to go to court and will eventually either write the debt off or suggest a "Full and Final" settlement.

I know Proliant will be reading this, and to clarify I am not supporting this process in anyway or recommending that people should do this, I am simply stating the facts as I have seen them.

I do respect your un-biased opinion Nick.

~Brock~

The only reason most creditors dont want to go to court is down to costs. They know that even if they win and are awarded costs, the likelyhood of their opponent paying them out of their benefits is remote. I say benefits because surely no half intelligent person would let it get this far unless they were on legal aid !

The bravado and arrogance being demonstrated by the Rankines, via their 'business' website is quite breathtaking. Their Rankines 'success' was based on the above - ironically their case was thrown out in the examples that did actually get to court.

I have said this before in another thread - the impression that all these debts can be wiped out is more down to misleading advertising than any common 'flaw' in pre 2007 agreements.

MABLE

aj2703 wrote: »

YAWNS the same old people moaning and being self riteous. If you can't answer the actual question without having a dig then SHUT UP.

Whats your problem girl. Time of the month. Chill out. :rotfl:

fatbelly

starM wrote: »

Hi,

My friend had a Credit Card with Barclaycard. He made the application online but he cannot remember if he really received an agreement through the post to sign it.

I know some card companies do not send agreement through the post but the customer just confirms the application while doing it online. Is Barclaycard one of them?

Also are these debts enforceable? How ill the credit company confirms the debt on the court without signed agreement?

Thanks
M

If the application was made after 6 April 2007, then CCA 2006 applies and no signature is needed for the debt to be enforceable in court.

bert&ernie

The battle lines on this debate seem to be fairly well defined. On one side, you have those who believe it is morally wrong to avoid repayment of a any debt that you knowingly and voluntarily incurred. On the other, you have those who believe that the banks have a legal obligation to comply with the law and that they forfeit the right to enforce debts when they don’t.

Both arguments have merit. The moral case for repaying debt is a strong one. Trust in a borrower to repay what they owe is a foundation of our society. The rights of lenders to recover debts are well recognised in common law. However, as a progressive society we have built on common law and have enacted a range of laws to protect consumers from the sharp practises of commercial lenders. These laws recognise that the relationship between a bank and a consumer is not equal - the parties are not peers and they do not negotiate the loan arrangement as such. It is fair to say that nobody forces the consumer to borrow - the terms are offered on a "take it or leave it" basis, but this does not make the consumer an equal party to the arrangement.

The lender is also under no obligation to lend to a consumer. They typically spend a great deal of effort marketing their products and selecting which customers to lend to. The law does however, oblige them to include certain terms in the agreements that they make with borrowers and to ensure that the evidence of this agreement is preserved. It is not technically very difficult to achieve this, but it does incur a small cost and, perhaps more importantly, it can interfere with a highly streamlined sales process. For the last 20 years, the unsecured lending business has been dominated by a sales and marketing culture which saw regulatory compliance as nothing more than an inconvenience that must be dealt with at the lowest possible cost. This unabashed short-sightedness has only just begun to be challenged - partly because the regulators were toothless, but more importantly because individual consumers were unlikely to exercise their rights.

Now the legal issues surrounding unenforceability are, at best, unclear. The case law is far from settled, but I believe we are fast approaching a tipping point where the lenders will have to acknowledge that they have a problem and begin to proactively manage it. The very fact that this issue appears almost daily on this and other MSE boards is evidence that the issue is coming to the attention of a growing number of consumers. This is not unlike the story of bank charge reclaiming - except, in this case, the consumers already have the banks money - hence the tipping point will come much sooner and the result will be much more pronounced.

Here we encounter another strand of the moralist argument - that the cost of unenforceable agreements will be passed on to the remaining bank customers and possibly the taxpayer as a whole. Given the unprecedented government bail out of the financial sector is impossible to deny that bank losses are everybody's business. However, it is clear that the blame for this result lies clearly with the banks own incompetent lending practises.

Lenders have obscured their incompetence for so long because they so very rarely take anyone to court. It is true that litigation is expensive and the results typically poor. For this reason, the standard collection treatment consists simply of escalating levels of telephone harassment followed by charge-off and sale to a debt buyer for as little as pence in the pound. The banks rarely gave two hoots about enforceability because they rarely found it economically viable to "enforce" the debt legally themselves anyway. The problem is now that consumers, often aided by claims managers and solicitors are seeking to establish the likelihood of enforceability prior to default. This makes it more difficult for the lender to follow their normal collection strategy and offload the debt onto a buyer. Simply dealing with the statutory requests for information and running the complaints procedures is significantly increasing collections costs.The current trend is unsustainable and I believe that the banks will, at some point, be forced to look to either the courts or the government to resolve the issue.

I really do wonder about the motivation of those who post into these threads simply to pour scorn on those who would choose to pursue unenforceability as a remedy for their debts. It seems unlikely to me that these arguments would have any success in changing the mind of anyone considering this course of action. It simply comes across as opinionated, smug, self-satisfied and ultimately rather self-indulgent - its as if these people a need to reaffirm their view of themselves as morally superior. I would rather they indulged in their superiority complex in private or resolved only to vent their spleen on the comments pages of the Daily Mail where they are at least assured the company of like minded idiots.

aj2703

bert&ernie wrote: »

The battle lines on this debate seem to be fairly well defined. On one side, you have those who believe it is morally wrong to avoid repayment of a any debt that you knowingly and voluntarily incurred. On the other, you have those who believe that the banks have a legal obligation to comply with the law and that they forfeit the right to enforce debts when they don’t.

Both arguments have merit. The moral case for repaying debt is a strong one. Trust in a borrower to repay what they owe is a foundation of our society. The rights of lenders to recover debts are well recognised in common law. However, as a progressive society we have built on common law and have enacted a range of laws to protect consumers from the sharp practises of commercial lenders. These laws recognise that the relationship between a bank and a consumer is not equal - the parties are not peers and they do not negotiate the loan arrangement as such. It is fair to say that nobody forces the consumer to borrow - the terms are offered on a "take it or leave it" basis, but this does not make the consumer an equal party to the arrangement.

The lender is also under no obligation to lend to a consumer. They typically spend a great deal of effort marketing their products and selecting which customers to lend to. The law does however, oblige them to include certain terms in the agreements that they make with borrowers and to ensure that the evidence of this agreement is preserved. It is not technically very difficult to achieve this, but it does incur a small cost and, perhaps more importantly, it can interfere with a highly streamlined sales process. For the last 20 years, the unsecured lending business has been dominated by a sales and marketing culture which saw regulatory compliance as nothing more than an inconvenience that must be dealt with at the lowest possible cost. This unabashed short-sightedness has only just begun to be challenged - partly because the regulators were toothless, but more importantly because individual consumers were unlikely to exercise their rights.

Now the legal issues surrounding unenforceability are, at best, unclear. The case law is far from settled, but I believe we are fast approaching a tipping point where the lenders will have to acknowledge that they have a problem and begin to proactively manage it. The very fact that this issue appears almost daily on this and other MSE boards is evidence that the issue is coming to the attention of a growing number of consumers. This is not unlike the story of bank charge reclaiming - except, in this case, the consumers already have the banks money - hence the tipping point will come much sooner and the result will be much more pronounced.

Here we encounter another strand of the moralist argument - that the cost of unenforceable agreements will be passed on to the remaining bank customers and possibly the taxpayer as a whole. Given the unprecedented government bail out of the financial sector is impossible to deny that bank losses are everybody's business. However, it is clear that the blame for this result lies clearly with the banks own incompetent lending practises.

Lenders have obscured their incompetence for so long because they so very rarely take anyone to court. It is true that litigation is expensive and the results typically poor. For this reason, the standard collection treatment consists simply of escalating levels of telephone harassment followed by charge-off and sale to a debt buyer for as little as pence in the pound. The banks rarely gave two hoots about enforceability because they rarely found it economically viable to "enforce" the debt legally themselves anyway. The problem is now that consumers, often aided by claims managers and solicitors are seeking to establish the likelihood of enforceability prior to default. This makes it more difficult for the lender to follow their normal collection strategy and offload the debt onto a buyer. Simply dealing with the statutory requests for information and running the complaints procedures is significantly increasing collections costs.The current trend is unsustainable and I believe that the banks will, at some point, be forced to look to either the courts or the government to resolve the issue.

I really do wonder about the motivation of those who post into these threads simply to pour scorn on those who would choose to pursue unenforceability as a remedy for their debts. It seems unlikely to me that these arguments would have any success in changing the mind of anyone considering this course of action. It simply comes across as opinionated, smug, self-satisfied and ultimately rather self-indulgent - its as if these people a need to reaffirm their view of themselves as morally superior. I would rather they indulged in their superiority complex in private or resolved only to vent their spleen on the comments pages of the Daily Mail where they are at least assured the company of like minded idiots.

~HEAR HEAR~

Feather

Is it correct that for any credit cards issued prior to April 2007 and with a balance of £2000+, that this debt could be wiped off? I am told that this is because the credit card companies have put credit limits up without the card holder asking for an increase. The 'company' who contacted me is charging a fee of £977.50 which is put on your credit card and then, if they are successful, it is wiped off with the rest of the debt. However, they say that if, after a primary investigation, there is no case to answer, then the fee is fully refunded. Too good to be true? HELP! Thanks