Credit card and Debt Management issues

GINAZEFRO

Hi,

Two weeks ago I attended a CAB financial adviser who is helping me sorting out my debt issues. She is sending letters to my creditors advising I can no longer pay, and we are looking to settle an agreed repayment programme.

I still have my credit card, and it is still active.

Can I continue using it? Is it fraud?

Thanks for letting me know.

Gina*

chattychappy

Interesting question and I don't think the answer is obvious.

It could be fraud by false representation (s2 Fraud Act 2006). This would be the case if your T+Cs say that you're no longer entitled to use the card if you've entered discussions with creditors because of inability to pay. (Most say something like that.) By using the card in these circumstances you are making a false representation - by tendering the card you are representing you are entitled to use it when you're not.

You may also have committed a fraud by failing to disclose information (s3) if you face payment difficulties and haven't informed the CC company (so you can go on using the card). Here there must be a legal duty of disclose the information - there often is in the T+Cs. So if in anyway you haven't given them the full picture, you could be tripped up here if you use the card.

If you know you ultimately can't pay for the stuff you're considering putting onto the card then this is also likely to be a fraud offence (implied representation that you can pay for stuff that you are buying when you can't).

To establish fraud there are a number of steps depending on the particular offence. One is "dishonesty". If having made full disclosure of your circumstances and agreed a plan, the CC company allows you to continue using the card and hasn't told you that you can't, then I don't think there is any fraud - if nothing else because you're not really being dishonest.

Not a very clear answer. I think it will come down to your T+Cs, your intention re repayment of transactions you might put through now, and the extent of the repayment plan - ie do you have a temporary cashflow problem or are you really insolvent.

There may be other offences which kick in if you go bankrupt. Eg if running up to bankruptcy you go on a spending spree. I don't think that's relevant here.

bengal-stripe

GINAZEFRO wrote: »

.......letters to my creditors advising I can no longer pay, and we are looking to settle an agreed repayment programme.
I still have my credit card, and it is still active. Can I continue using it? Is it fraud?

It’s about the same as going into a restaurant when you know you have no money.

Nevertheless, you order from the menu whatever takes your fancy; as you know full well you won’t be found out for the next two hours. Then you just say: “Can’t pay!”.

I don’t know what it is, fraud, deception, whatever; it is dishonest as your intention is to deprive the restaurant of it's goods.

PNPSUKNET

sure you can, spend £100 then offer to repay at £1 a month

bengal-stripe

PNPSUKNET wrote: »

sure you can, spend £100 then offer to repay at £1 a month

Why stop at £100?
Spend £1000, then offer to repay it £1 a month.

Hax

Your CC should be included in you DMP. As soon as the CC company receive the DMP letter they'll block the card.

Exclude the CC from the DMP and other creditors will find out, end their agreement and persue you through the courts for the debt.

chattychappy

bengal-stripe wrote: »

Nevertheless, you order from the menu whatever takes your fancy; as you know full well you won’t be found out for the next two hours. Then you just say: “Can’t pay!”.

I don’t know what it is, fraud, deception, whatever; it is dishonest as your intention is to deprive the restaurant of it's goods.

Yep - it's fraud. s11 Fraud Act 2006 - obtaining services dishonestly. The OP in his senario could also be caught by this one too if his intention really is not to pay.