"Unenforcable" Credit Agreements - let's get it out in the open

ross1979

Outwith the arguments for and against going down the "unenforcable" route, it is true to say that there are many people across the UK making a living charging people to test their previous loan agreements.

I believe that these people charge £300+.

As far as I am aware, all they are doing is requesting some documents from the bank and looking for any errors as per the CCA.

Is there anyone here on the forum who can say definitively what errors these people are actually looking for, and how they word their objections to the loan providers.

If this information could be posted here, in the public domain, it would put any unscrupolous businesses out of the game, and also give people the freedom to choose if they want to pursue this or not - without laying down good cash.

Once again, I'd like to make clear that I don't want to get into an argument on the morals of this practice - I'd just like to see the goons who profit out of the system put to bed.

fermi

There can be other issues with agreements, but this is the crux of it..............

Note: These provisions have been in the Act since 1974, so the claim that it is due to "new legislation" is twaddle.

And just because an agreement may be unenforceable does not mean that the debt is "wiped out".

Section 127(3) as mentioned below:

127. Enforcement orders in cases of infringement.

(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

IS MY AGREEMENT ENFORCEABLE (Via section 127(3) CCA1974).

PRESCRIBED TERMS FOR THE PURPOSES OF SECTIONS 61(1)(0) AND 127(3) OF THE CONSUMER CREDIT ACT 1974 Taken from schedule.6 (1983/1553) regulations

Please note that these Prescribed terms where not changed in any way by the 2004/1482 Amendments although the form in which they appear on the agreement was. Subsection 127(3) was repealed on the 6th of April 2007 so that unenforceability due to 127(3) will only apply to agreements executed before that date.

(If you just want to find out, skip the bits in between the stars it’s just some extra information)

**What do we mean by unenforceable?

In the Consumer Credit Act 1974 section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

How does unenforceable differ from enforceable with a court order only?

When an agreement is unenforceable it means that the court or the judge cannot make a ruling on it. The court cannot make it enforceable.

When an agreement is enforceable only by ruling of the court it means that the agreement can be stopped by the debtor but the court has the power to re-instate it and allow the credit to continue to enforce.**

The Prescribed Terms are these:

A Amount of credit

A term stating the amount of credit

B Repayments

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following:-

(a) Number of repayments;
(b) Amount of repayments;
(c) Frequency and timing of repayments;
(d) Dates of repayments;
(e) The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable.

C Rate of interest

A term stating the rate of interest to be applied to the credit issued under the agreement

D Credit limit

This may be a term or the manner in which it will be determined or that there is no credit limit.

---

Which of these applies to you depends on the type of agreement you have?

For a Running Account (credit card) agreement

BC and D Apply

For a Restricted Use Debtor Creditor Supplier

• Where the dealer is the supplier and the creditor is the one providing the finance.
• The money can only be used for the purpose it is given.
• There is no interest on the purchase (the cash price is the same as the total price)
• And there is no advance payment

A is applicable

For a fixed Sum Credit Agreement

A conventional credit agreement with none of the above restrictions

A and B apply

For a Hire Agreement

B is Applicable

This paper only covers section 127(3) of the Act agreements can also be unenforceable by contravention of sections 1 and 4.

fermi

Also when making a request under s77-79 for the agreement the CCA1974 states:

78.—(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of [£1], shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer...

It also states:

78.—(6) If the creditor under an agreement fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement;

See: Factsheet | Getting a copy of your credit agreement, account details and a statement of account.

The above is from a professional and FREE debt advice service, not a company out to fleece you.

orangetrader

I’ve looked into DIY and from what I can gather there are some fairly complex calculations which need to be carried out. You also need to establish if the formulas applied to the individual agreement are correct and these will vary from agreement to agreement.
I completely agree, avoid companies that charge for a check at all costs. But there are companies that will do it for free (and after that there is nothing to stop you approaching the lender directly) see http://forums.moneysavingexpert.com/...html?t=1478569

Ansu

Everything fermi said is spot on, the key thing people need to realise is that unenforceable does not mean written-off.


The companies are not doing anything that you cannot do yourself.

They request CCA agreement, then send another templated letter to claim that the debt is unenforcable due to exeeding 12day timescales/not signed/terms on seperate pages etc. Non of these warrant a debt being written-off, and most of the claims are inaccurate anyway.


If they were so sure of their chances, they would offer their service on a no-win no-fee basis. If they want a fee (especially up front) forget them.

fermi

orangetrader wrote: »

I’ve looked into DIY and from what I can gather there are some fairly complex calculations which need to be carried out.

I presume you mean the "Permissible tolerances in disclosure of the APR" under schedule 7 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553)?

That sort of "forensic" examination of an agreement is often not necessary. You would be amazed how many agreements we see on the DFW board and on CAG where one (or even all) of the prescribed terms are missing, or that the agreement was never signed. A basic and obvious error to spot, given even minimal research.

A lot of people were never issued with a valid agreement to start off with by the lender. Certainly not as high a % as is claimed by these 'ambulance chasers', but it is still scary how lax some of the lenders have been when issuing credit in the past.

petermb_2

Ansu wrote: »

Everything fermi said is spot on, the key thing people need to realise is that unenforceable does not mean written-off.


The companies are not doing anything that you cannot do yourself.

They request CCA agreement, then send another templated letter to claim that the debt is unenforcable due to exeeding 12day timescales/not signed/terms on seperate pages etc. Non of these warrant a debt being written-off, and most of the claims are inaccurate anyway.


If they were so sure of their chances, they would offer their service on a no-win no-fee basis. If they want a fee (especially up front) forget them.

Although I agree with most of your statement I cannot agree with your opinion that the loan is not written off if it is deemed unenforceable. The Balance of the loan will not be recoverable by the lender and they lose claim to the goods or property secured on the loan.

I can assure you that this is the case because I have been involved in claims where this has happened.

druss

Ansu wrote: »

Everything fermi said is spot on, the key thing people need to realise is that unenforceable does not mean written-off.


The companies are not doing anything that you cannot do yourself.

They request CCA agreement, then send another templated letter to claim that the debt is unenforcable due to exeeding 12day timescales/not signed/terms on seperate pages etc. Non of these warrant a debt being written-off, and most of the claims are inaccurate anyway.


If they were so sure of their chances, they would offer their service on a no-win no-fee basis. If they want a fee (especially up front) forget them.

Ansu, thats a bit short sighted although i agree if a company is taking your money, chases the agreement and they do not get a reply then declares it unenforceable without ant legal proceedings then dont use them.

You will find a lot of the claims / solicitor firms are taking money upfront so they can take the case to court which does cost money hence they charge for it!

If you actually want the debt written off there is no other way of doing this except taking a lender to court so do not get scammed.

fermi

petermb wrote: »

Although I agree with most of your statement I cannot agree with your opinion that the loan is not written off if it is deemed unenforceable. The Balance of the loan will not be recoverable by the lender and they lose claim to the goods or property secured on the loan.

Depends how you define "written off".

As far as I am concerned writing off a loan/debt is a decison by the lender takes.

Even if a loan is deemed unenforceable in a court, the lender may still keep it on their books and the debtor still has the option of paying it.

petermb_2

fermi wrote: »

Depends how you define "written off".

As far as I am concerned writing off a loan/debt is a decison by the lender takes.

Even if a loan is deemed unenforceable in a court, the lender may still keep it on their books and the debtor still has the option of paying it.

But the unenforceability is often created from other major issues surrounding the setting up of the agreement. ie fraud, bribery and breach of contract.

many agreements will be both voidable and unenforceable at the same time.

fermi

petermb wrote: »

But the unenforceability is often created from other major issues surrounding the setting up of the agreement. ie fraud, bribery and breach of contract.

many agreements will be both voidable and unenforceable at the same time.

That may be true, but I think the vast majority of people on these boards are looking at it on from the perspective of unenforceability, especially if they are thinking of doing it themselves.

So my comment stands.