Unenforceable Credit Agreements

Paul_Herring

Doublespresso wrote: »

Thanks for the lively debate, but if you don't mind I'd like to move away from the moral question and get back to the real topic of this thread, i.e. has anyone successfully and legally managed to write their CC debt off?
If yes, on what basis? Which Bank or CC? Were there any consequences (e.g. credit rating damaged etc)

I hear IVA's and bankruptcy are successful and legal.

bert&ernie

Doublespresso wrote: »

Thanks for the lively debate, but if you don't mind I'd like to move away from the moral question and get back to the real topic of this thread, i.e. has anyone successfully and legally managed to write their CC debt off?
If yes, on what basis? Which Bank or CC? Were there any consequences (e.g. credit rating damaged etc)

Apart form the informative value, I feel that unless the above is clarified, there will be PLENTY of desperate people signing up to these agencies handing over advance fees and getting into deeper trouble.

Success stories, as such, seem to be a little thin on the ground. Then again, I seem to recall that this was also the case in the early days of bank change reclaiming.

I don't think its easy to draw these cases to a conclusion. From what I've seen on other forums, the process is a long and difficult one - the bank will generally drag it out for as long as possible and will harass you all the way.

As for the effect on a credit rating - I would expect the results to be fairly catastrophic in the short term at least. The lender will follow their normal collections process and this will lead to a default being registered when the account is charged of, if not before. Even if the bank ultimately write-off the debt, you would probably need to take further action against them in order to get the default removed. The basis for removal being that you can't be in default of an agreement that doesn't exist or is otherwise unenforceable. I presume that you could use data protection law to pursue this.

The ambulance chasing claim firms are all over this now. I think its only a matter of time before it becomes mainstream news and the banks get inundated with section 78 requests.

I know of a lender can only recall ~55% of the credit card applications it should have in its archives (I won't cite the source). If this is any sort of indication as to the problems faced by other lenders, then once this becomes widely known, the industry could have a bit of a crisis on its hands.

Obviously, its bank customers who will ultimately pay for this - just as they are paying for reclaimed charges, stoozing, rate tarting... The question is who's fault is it - I prefer to blame the executives and professionals who are responsible for the flawed process that create unenforceable agreements. It would seem that the majority of posters to this thread would rather blame the consumers who chose to take action against the banks. Their view would seem to be that we should all be "good consumers" and play by the bank's "rules" - even if those rules are legally flawed.

normanmark

bert&ernie wrote: »

It would seem that the majority of posters to this thread would rather blame the consumers who chose to take action against the banks. Their view would seem to be that we should all be "good consumers" and play by the bank's "rules" - even if those rules are legally flawed.

How are they so legally flawed? You mean that theres a loophole thats being exploited?

If the rules work for a big proportion of credit card users - what way then it is flawed?

As for blame. If consumers did their bit then these card companies wouldn't be in business quite simply. So i think responsibility lies there first before passing the blame elsewhere. I mean they're not forced into taking out these cards are they now?

bert&ernie

normanmark wrote: »

How are they so legally flawed? You mean that theres a loophole thats being exploited?

If the rules work for a big proportion of credit card users - what way then it is flawed?

As for blame. If consumers did their bit then these card companies wouldn't be in business quite simply. So i think responsibility lies there first before passing the blame elsewhere. I mean they're not forced into taking out these cards are they now?

I say legally flawed, you say loophole. I actually prefer the term legal technicality. Now defining one of those will be fun.

Different customers have different terms and conditions. For many, the agreement will be perfectly legal and enforceable - for some it will not. Its up to the customer to find out where they stands and what action they wish to take.

Your third point doesn't really make a lot of sense. Nobody forced the lender to advance the money. Nobody forced them to screw up the agreement or the way it was processed. Nobody forced them to treat the customer unfairly.

normanmark

My third point makes crystal clear sense. Its just you struggle to see past a consumer struggle and think that everything a consumer does is correct & shouldn't be questioned.

The fact remains that credit cards can be used effectively quite easy. Stoozers are prime examples of working the system to their favour. You cannot then turn around and say its legally flawed. I utilise credit well, i don't have any problem with card companies. If you follow the terms & conditions and just ensure the bill is paid every statement then you don't fall into their hands. Such a simple thing but yet so many struggle to work out that simple answer to beating credit card companies at their own game.

I think sometimes one has to look at what they agree & sign up to use. A lender can only make a prediction based on whats happened in the past in order to advance money.

They cannot look into the future and assume this borrower will do exactly what they think. Its down to the individual ultimately i would say. Its them signing up for the credit card, no one forcing them into it.

Can't trust yourself with credit? A simple solution. Don't sign up for it.

Ian_Griffiths_Halifax

Walletwatch wrote: »

You think that gives you license to get your principal amount written off - A BIG RESOUNDING NO !!!

Read my Post No. 28, and you'll see that I didn't say that.

Walletwatch

Ian_Griffiths_Halifax wrote: »

Read my Post No. 28, and you'll see that I didn't say that.

Ian,

Totally agree with your post no 28. However, the specific post of yours that I was replying to was your response to normanmark when he was suggesting (quite rightly so) that one should be expected to repay the debt he owes (I refer to the principal amount here and not unfair interest charged).

I do agree though, we see eye to eye so far as your post 28 is concerned.

Cheers
WW

bert&ernie

normanmark wrote: »

My third point makes crystal clear sense. Its just you struggle to see past a consumer struggle and think that everything a consumer does is correct & shouldn't be questioned.

The fact remains that credit cards can be used effectively quite easy. Stoozers are prime examples of working the system to their favour. You cannot then turn around and say its legally flawed. I utilise credit well, i don't have any problem with card companies. If you follow the terms & conditions and just ensure the bill is paid every statement then you don't fall into their hands. Such a simple thing but yet so many struggle to work out that simple answer to beating credit card companies at their own game.

I think sometimes one has to look at what they agree & sign up to use. A lender can only make a prediction based on whats happened in the past in order to advance money.

They cannot look into the future and assume this borrower will do exactly what they think. Its down to the individual ultimately i would say. Its them signing up for the credit card, no one forcing them into it.

Can't trust yourself with credit? A simple solution. Don't sign up for it.

OK, I think I see your point now. If all consumers behaved as you suggest, then the credit card companies would go out of business?

Not so sure that would be the case. For instance if everybody tried to stooze - there would be no interest free teaser offers. If everybody paid in full, there would be less grace and whole host of fees for the privilege of using the card.

You think you are beating them at their own game. You may be winning personally, but don't forget that its their game - they will just make someone else lose in order to balance the book. Moneysaving is inherently selfish - in financial services it is simply a method for redistributing wealth from the ignorant to the savvy.

I wasn't talking about how lenders make individual credit decisions. Just pointing out that they aren't forced to lend any more than an individual is to borrow. Of course, there are commercial pressures, just as individuals sometimes find pressures of their own that lead them to chose credit.

Cant trust you systems and staff to write legally enforceable business? Don't lend money (or at least don't be surprised when you cant get it back)

normanmark

I'll just think i'll be going round in circles B&E if i reply back to the post. I'll leave it there.

Paul_Herring

bert&ernie wrote: »

OK, I think I see your point now. If all consumers behaved as you suggest, then the credit card companies would go out of business?

Not so sure that would be the case. For instance if everybody tried to stooze - there would be no interest free teaser offers. If everybody paid in full, there would be less grace and whole host of fees for the privilege of using the card.

You think you are beating them at their own game. You may be winning personally, but don't forget that its their game - they will just make someone else lose in order to balance the book. Moneysaving is inherently selfish - in financial services it is simply a method for redistributing wealth from the ignorant to the savvy.

Lets not forget that the credit card companies make money on each transaction from the vendors.