New OFT Guidance on agreement requests under s77-79 of the Consumer Credit Act

fermi

See press release here: http://www.oft.gov.uk/about-the-oft/legal-powers/legal/cca/unenforceable-credit-agreements

Borrowers and hirers are able to ask creditors to send them information about their credit agreements. If information is not provided within 12 working days, the debt becomes unenforceable.

Sections 77, 78 and 79 of the Consumer Credit Act 1974 outline the information creditors must provide to debtors under fixed-term, running account and hire agreements.

Under these sections a debtor can pay £1 to get:

• a copy of their agreement
• copies of some of the other documents mentioned in their agreement
• a statement of account.

If this information is not provided within 12 working days the debt becomes unenforceable. This means a creditor:

cannot:

- make the debtor pay the debt before they're supposed to
- get a court judgment against the debtor
- take back anything hired or bought on credit, or take anything used as security in the agreement.

can:

- ask debtors to pay what they owe
- send a default notice
- pass information on to a credit reference agency
- pass information on to a debt collector
- sell the debt to someone else
- take the case to court.

If you are a business and would like more detailed guidance, download OFT1272 - Guidance on section 77, 78 and 79 of the Consumer Credit Act 1974 - the duty to give information to debtors and the consequences of non-compliance on the enforceability of the agreement (pdf 330kb).

If you are a consumer and would like more information or you are a business that would like to send information to your customers view OFT1266 - Need information about your credit or hire agreement? (pdf 83kb)

SouthCoast

Thanks for the link. I liked this bit:

Unfortunately, consumers have often been given an exaggerated expectation of what the creditor or owner must do in order to comply with an information request, as a result of misleading claims by claims management companies and inaccurate information on the internet.

DarkConvict

Its not new information, but I am glad the OFT has published something official that backs up the work of Never-In-Doubt. Hopefully people will better understand CCA and not be ripped off or use it incorrectly.

fermi

It's new as in new official guidance from the OFT

The previous info published by them was merely a draft put out for consultation. So couldn't be relied on until this official release.

DarkConvict

fermi , Your point is well made.

3Dogs

fermi wrote: »

Borrowers and hirers are able to ask creditors to send them information about their credit agreements. If information is not provided within 12 working days, the debt becomes unenforceable.


If this information is not provided within 12 working days the debt becomes unenforceable. This means a creditor:

• cannot:
  - make the debtor pay the debt before they're supposed to
  - get a court judgment against the debtor
  - take back anything hired or bought on credit, or take anything used as security in the agreement.
• can:
  - ask debtors to pay what they owe
  - send a default notice
  - pass information on to a credit reference agency
  - pass information on to a debt collector
  - sell the debt to someone else
  - take the case to court.

This seems to say that a creditor can take you to court over an unenforcable debt, but can't obtain a judgement against you in court - is this correct?

Also, a creditor can sell the debt to someone else even though the debt is unenforcable/in dispute, which goes against current views?

And, in reading the MSE Guy article, it would seem that, if a debt is deemed unenforcable due to no/incorrect agreement, the debt will become enforcable as soon as the creditor corrects the agreement terms - is this correct too?

fermi

3Dogs wrote: »

This seems to say that a creditor can take you to court over an unenforcable debt, but can't obtain a judgement against you in court - is this correct?

Yes. They can start legal proceedings, but the court is prohibited from granting a judgement.

A somewhat mixed/confused message from the OFT, as they also say that a creditor should not try to mislead a debtor that a debt is enforceable.

So more of a technical point of law it seems?

Also, a creditor can sell the debt to someone else even though the debt is unenforcable/in dispute, which goes against current views?

Not really. It's just a part/extension of the Carey vs HSBC ruling in the Hight Court on what constitutes "enforcement". Has been clear for some time, but I think a lot of people haven't caught up?

And, in reading the MSE Guy article, it would seem that, if a debt is deemed unenforcable due to no/incorrect agreement, a debt will become enforcable as soon as the creditor corrects the agreement terms - is this correct too?

If unenforceable due to non-compliance with section 77-79, then yes. As soon as the creditor supplies an agreement that complies with the provisions, then the obligation under that section is satisfied. Meaning that the creditor can enforce the agreement. That copy must genuinely reflect the original though, plus any varied terms. They can't just make up a new correct version to comply if the original didn't.

However, for agreements made before April 6th 2007, it still remains the case under the separate section 127(3) that the debtor must have signed an agreement containing the prescribed terms. It is up to the creditor to satisfy the court that such an agreement was signed.

Much of the confusion on this comes from people mixing up the consequences and requirements of s77-79 and 127.

Does that help?

3Dogs

Yes, Fermi many thanks - I think it does - thankfully, more knowledgeable minds than mine will be working on it

fermi

Small bump

fermi

goldengirl1384 wrote: »

hi all, im new to this but could really do with some advice. i read a thread or two on here a few weeks ago and so wrote to cabot with the following email

Hi.

This should really be posted in it's own thread.

I'll move the above post into one and add a link to the new thread below.

Click ---> https://forums.moneysavingexpert.com/discussion/3597403