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

petermb_2

Good post rog2. I totally agree with you. I would go a little further in that I think that if the lender has failed to provide a copy of the agreement I do not think a judge would allow them to enforce it by going to court. I may be wrong.

rog2

petermb wrote: »

I would go a little further in that I think that if the lender has failed to provide a copy of the agreement I do not think a judge would allow them to enforce it by going to court. I may be wrong.

That is quite true - in fact there is a case where it was found that by not complying with the terms of the Act, the lender was judged to have 'gifted' the money to the lender - I'm sure that fermi will be able to supply the details.

Normally, though, a Court should rule any such agreement as 'irrideemably unenforceable'.

fermi

rog2 wrote: »

I'm sure that fermi will be able to supply the details.

Court of Appeal Judgement.

Wilson v First County Trust Ltd [2001] EWCA Civ 633 (2 May 2001)

In effect, the creditor – by failing to ensure that he obtained a document signed by the debtor which contained all the prescribed terms – must (in the light of the provisions in sections 65(1) and 127(3) of the 1974 Act) be taken to have made a voluntary disposition, or gift, of the loan monies to the debtor. The creditor had chosen to part with the monies in circumstances in which it was never entitled to have them repaid;

10past6

fermi wrote: »

Court of Appeal Judgement.

Wilson v First County Trust Ltd [2001] EWCA Civ 633 (2 May 2001)

It's important for any defendant to print and include the above details within their defence.

Many judges of a lower ranking (Deputy DJ) are not fully aware re Court of Appeal rulings.

Never take it for granted that because it's a "Judge" they're upto date with comsumer law.

fermi

Also useful when they try to fob you off with unconnected bits of paper:

Wilson & Anor v Hurstanger Ltd [2007] EWCA Civ 299 (04 April 2007)

Paragraph 9.

It is not necessary or rewarding to go on a grand tour of the legislation in order to explain the issues we have to decide. Put shortly section 60 (1) of the Act gives power to the Secretary of State to make regulations as to the form and content of documents embodying regulated agreements. Section 61 (1) provides that a regulated agreement is not properly executed unless it is in a document containing all the prescribed terms and conforming to the regulations made under section 60 (1).

An improperly executed agreement is enforceable against the debtor only on an order of the court (section 65 (1)), but no such an order can be made unless it contains all the prescribed terms (section 127 (3)).

Paragraph 11.

Schedule 1 to the 1983 Regulations sets out the “information to be contained in documents embodying regulated consumer credit agreements”. Some of this information mirrors the terms prescribed by schedule 6, but some does not. Contrasting the provisions of the two schedules the Judge said:

“In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under section 61 that all the terms should be in a single document, and backed up by the provisions of section 127 (3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement. More detailed requirements, which are designed to ensure that the debtor is made aware, so far as possible, of specified information (including information contained in the minimum terms) are to be found in Schedule 1.”

I agree. The discretionary power under section 65 (1) to order enforcement of an agreement which does not comply with schedule 1 may be exercised on terms discharging the debtor from having to pay any sum payable under the agreement (section 127 (2)).

dvs

Hi there

Where is the 12+2 template? I just can't seem to find it today (I've saved too many threads on this subject!) The National Debtline website has a template for when a creditor has refused to send you a CCA but it takes you to the letter requesting a CCA. I've just worked out that MBNA have failed to reply to a letter sent 30 working days ago.

Thanks

rog2

dvs wrote: »

Hi there

Where is the 12+2 template? I just can't seem to find it today (I've saved too many threads on this subject!) The National Debtline website has a template for when a creditor has refused to send you a CCA but it takes you to the letter requesting a CCA. I've just worked out that MBNA have failed to reply to a letter sent 30 working days ago.

Thanks

There are two options in the following thread:

http://forums.moneysavingexpert.com/showthread.html?t=963087

Either option is fine - personally I prefer the option posted by GeorgeUK.

Ansu

rog2 wrote: »

Therefore, in my opinion, if an agreement is found to be 'flawed' and, therefore, unenforceable through even a minor technicality, then the creditor should accept that decision. Perhaps any future agreements, made by that lender, will be compliant.

I strongly agree with what you're saying, however...

rog2 wrote: »

It is at this stage where the debtor can cease making payments.

In the event of no, or non-compliant, cca being provided within the legally prescribed time-scale, cease payments to that creditor/dca.

I don't believe that payments should be stopped until you are certain the agreement is void (not just unenforceable) as this may have an adverse affect on your credit file.

Reporting to the credit reference agencies does not count as enforcement, in the event that a creditor breached the 12day timescale, and provided the documents six months later, the agreement would once again become enforceable (assuming the agreement meets the requirements of the rest of the Act).

While in default they simply cannot commence litigation. Interest, charges and reporting data can continue until an agreement is void and being unenforceable does not necessarily make it void. While a judge cannot enforce, they also would not discharge the debtors liability without good cause.


Still a great post rog2.

louiser123

am i right in thinking that the cca must contain the debtors signiture? if they send one without a signiture of the debtor is this classed as unenforcable??

fermi

louiser123 wrote: »

am i right in thinking that the cca must contain the debtors signiture? if they send one without a signiture of the debtor is this classed as unenforcable??

For the purposes of a section 77-79 request the creditor is permitted to omit the signature box in the copy agreement.

For the purposes of enforcement by the court, a signature is required for agreements made before April 6th 2007 to be enforceable. For agreements made after that date that absolute requirement has been removed from the legislation.