Default - Removing - Lloyds Bank

TheRedAdmiral

Here is my situation.....

My account was opened in 1997 with Lloyds Bank. There was no agreement signed when opening the account - as a friend opened the account "Over the Phone". Therefore there is no Contractual Agreement signed by me to:

a) Agree to the Charges
b) Authorise the Bank to release information to Credit Ref. Agencies

In 2009 I submitted a claim for Bank Charges. The Claim was stayed in May 2009. The term "Stay" in my opinion means "Suspended" pending something else to happen. As of yesterday the claim remained Stayed - and had not been Struck out.

In June 2010 - despite Court Action underway (above) - Lloyds Bank Registered Defaults against my wife and I. No Default Notices were ever received. I could understand one going missing. However, for both to have not been received suggests to me that they were not sent. Nonetheless the Defaults remain on our files.

I made a SAR and today received a letter from Moorcraft confirming that Lloyds cannot provide a copy of the original agreement opening the account (clearly as one was not signed!).

I therefore take the opinion that:

1) There is no enforceable contract in place
2) All Charges should be refundable
3) There is no contractual right for Lloyds to pass personal data onto Credit Reference Agencies.

I think I am correct. But I would welcome additional thoughts (positive and negative).

My main concern is getting the Default removed

Ballyhoo

If there is a debt outstanding which is owed to the bank, which you have not repaid - the bank will issue a default sooner or later.

You'd have to get specific advice on whether the fact you opened an account over the telephone means that the terms and conditions applicable to the account under normal circumstances no longer apply. My only thought on that is - what the heckins are the terms and conditions then?!

But let's suppose that they are likely to.

Whether or not you believe the charges are fair or enforceable or whatever, the position in law - as I understand it - is that they're not excessive and not penalties, and no one's managed to prove yet that they're unlawful using alternative arguments. Unless your case goes to court tomorrow and you get an order from the judge saying otherwise (if you do, a lot of people are going to be very happy!) - there is a debt outstanding and the bank might default you guys.

Having said that, if it didn't play ball and send the default notices then you could and should argue this, and see what happens. It won't prevent the bank simply trying again in the future though, if the debt's not paid. It might agree to remove adverse data, (can take a while) but then simply issue the notices, comply with the procedures for this stuff and THEN slap a default back on the file.

Hope that's not too negative. And I would emphasise that a) this is stuff I'm not very clear on, and its past my bedtime so is neccessarily a bit vague and b) I'm caveating that view on the basis that the terms and conditions applicable to the account DO in fact apply.

zppp

TheRedAdmiral wrote: »

Here is my situation.....

My account was opened in 1997 with Lloyds Bank. There was no agreement signed when opening the account - as a friend opened the account "Over the Phone". Therefore there is no Contractual Agreement signed by me to:

a) Agree to the Charges
b) Authorise the Bank to release information to Credit Ref. Agencies

In 2009 I submitted a claim for Bank Charges. The Claim was stayed in May 2009. The term "Stay" in my opinion means "Suspended" pending something else to happen. As of yesterday the claim remained Stayed - and had not been Struck out.

In June 2010 - despite Court Action underway (above) - Lloyds Bank Registered Defaults against my wife and I. No Default Notices were ever received. I could understand one going missing. However, for both to have not been received suggests to me that they were not sent. Nonetheless the Defaults remain on our files.

I made a SAR and today received a letter from Moorcraft confirming that Lloyds cannot provide a copy of the original agreement opening the account (clearly as one was not signed!).

I therefore take the opinion that:

1) There is no enforceable contract in place
2) All Charges should be refundable
3) There is no contractual right for Lloyds to pass personal data onto Credit Reference Agencies.

I think I am correct. But I would welcome additional thoughts (positive and negative).

My main concern is getting the Default removed

They don't need to provide the original agreement for two reasons;

1. They are not required to hold it under Data Protection legislation, most only hold data for a period of six years.

2. There is nothing stated in law that an original agreement must be supplied on request. They are able to give you reconstituted agreements for credit.

I imagine they will simply state that they are unable to locate and quote the DPA.

TheRedAdmiral

Ballyhoo wrote: »

If there is a debt outstanding which is owed to the bank, which you have not repaid - the bank will issue a default sooner or later.

You'd have to get specific advice on whether the fact you opened an account over the telephone means that the terms and conditions applicable to the account under normal circumstances no longer apply. My only thought on that is - what the heckins are the terms and conditions then?!

But let's suppose that they are likely to.

Whether or not you believe the charges are fair or enforceable or whatever, the position in law - as I understand it - is that they're not excessive and not penalties, and no one's managed to prove yet that they're unlawful using alternative arguments. Unless your case goes to court tomorrow and you get an order from the judge saying otherwise (if you do, a lot of people are going to be very happy!) - there is a debt outstanding and the bank might default you guys.

Having said that, if it didn't play ball and send the default notices then you could and should argue this, and see what happens. It won't prevent the bank simply trying again in the future though, if the debt's not paid. It might agree to remove adverse data, (can take a while) but then simply issue the notices, comply with the procedures for this stuff and THEN slap a default back on the file.

Hope that's not too negative. And I would emphasise that a) this is stuff I'm not very clear on, and its past my bedtime so is neccessarily a bit vague and b) I'm caveating that view on the basis that the terms and conditions applicable to the account DO in fact apply.

Lloyds Bank have already registered the Defaults against my wife and I. However:

a) They have no served Default Notices
b) Perhaps more importantly - There is no Contractual Agreement between us and the Bank for them to pass info onto the CRAs.

There is a very subtle point here. If truth be told I am not bothered whether the account is in default or not. Where the crux of the argument lies is "There is no Contractual Agreement authorising the Bank to provide Info to CRAs" - and they have already confirmed that they cannot prove that there is.

So my initial thought is, following a Letter of Claim, to issue proceedings against Lloyds Bank for damages (limited to £750) to keep the matter in the Small Claims Track.

Ultimately all I am looking for is to get the default removed.

Premier_2

I'm getting a sense of deja vu here :cool:

https://forums.moneysavingexpert.com/discussion/2809882

Also how did your friend open an account in your name over the phone? :huh:

Esoog

Yesh, that sounds a tad, er, lax? And unlikely?

TheRedAdmiral

LOL.....Forgot I posted that.

It may very well have been lax of Lloyds Bank but, unbelievably, it is true. I remember giving (name withheld) a call from a Telephone Box in Swansea - outside of where I worked at the time. I rang and asked what where the chances of setting up an account - to which a "no problem" was received. Spent about 10 mins on the phone discussing the account, and property, and he set up two accounts for me.

The cheque books and cards followed about a week later. I, quite simply, never signed anything.

Like I said my only concern is "Have I signed a document authorising Lloyds TSB to release info to CRAs". I dont think I have and I therefore think they are acting in an appropriate manner.

Im not to bothered about whether the account is enforceable or not as, once I know they have to remove the the Default, I will offer them £10 per month knowing that they cannot register anything against me legally.

Perhaps I should re-phrase my question.....

"Does a Bank have an authority to register information with CRAs when no legally binding contract to do so has been signed?"

I think that is the crux of what I am getting at.

If I issue against Lloyds Bank they will be required to provide proof that I signed a legally binding contract authorising them to release info to CRAs and, it is my belief, that when they cannot they will be faced with an Unless Order followed by a Strike Out of their Defence - Following which the removal of the default will be automatic

Ballyhoo

TheRedAdmiral wrote: »

Lloyds Bank have already registered the Defaults against my wife and I. However:

a) They have no served Default Notices
b) Perhaps more importantly - There is no Contractual Agreement between us and the Bank for them to pass info onto the CRAs.

There is a very subtle point here. If truth be told I am not bothered whether the account is in default or not. Where the crux of the argument lies is "There is no Contractual Agreement authorising the Bank to provide Info to CRAs" - and they have already confirmed that they cannot prove that there is.

So my initial thought is, following a Letter of Claim, to issue proceedings against Lloyds Bank for damages (limited to £750) to keep the matter in the Small Claims Track.

Ultimately all I am looking for is to get the default removed.

Actually, I'd say that the contractual point is less important than that there's a debt that you owe to the bank. Whether or not they'd broken T&Cs is ultimately a really finely balanced point of law that I'd only be confident about if I was a barrister. And I'm guessing you're not.

Also, why are you issuing a claim without getting proper legal advice on this stuff first?

In the bank's favour: you had an account, incurred charges, and now owe a debt which you are refusing to repay.

In your favour: An unqualified opinion that the terms and conditions applicable to the account do not apply, and a possible failure by the bank to comply with some procedure.

You need to know a) whether the terms and conditions apply b) whether that even matters when it comes to registering defaults and c) what your actual losses are. If you're making a claim in the sum of £750 then you'd better be able to particularise those losses.

As far as I can see, none of these things have been assessed. So why waste the money on a claim?

TheRedAdmiral

Ballyhoo wrote: »

Actually, I'd say that the contractual point is less important than that there's a debt that you owe to the bank. Whether or not they'd broken T&Cs is ultimately a really finely balanced point of law that I'd only be confident about if I was a barrister. And I'm guessing you're not.

Also, why are you issuing a claim without getting proper legal advice on this stuff first?

In the bank's favour: you had an account, incurred charges, and now owe a debt which you are refusing to repay.

In your favour: An unqualified opinion that the terms and conditions applicable to the account do not apply, and a possible failure by the bank to comply with some procedure.

You need to know a) whether the terms and conditions apply b) whether that even matters when it comes to registering defaults and c) what your actual losses are. If you're making a claim in the sum of £750 then you'd better be able to particularise those losses.

As far as I can see, none of these things have been assessed. So why waste the money on a claim?

I appreciate the advice that is coming here.

I do actually work within the legal field. My specialism though is Personal Injury and not necessarily Contract Law.

I have my own opinion on banks, their practices, and whether I should pay the money they allege I owe. My opinion might be different to others but that is not the issue here.

To me this is a question of Contract Law. The question I would pose to the Court is as follows:

1) Do Lloyds TSB have a Contractual Right to pass any information (positive or negative) to any 3rd Party (including, but not limited to, CRAs) - Without a signed contract being in place?

Lloyds Bank would, of course, be offered the chance to enter a Defence and they may very well do so.

But there comes a point where the Court will actually wish to see a document that is signed by me and authorises them to provide data to CRAs - and they cannot provide it - as they have already confirmed.

Now my legal knowledge leads me to believe that Lloyds Defence would be Struck Out in such circumstances. But I accept that I dont know everything and I am sure that there are more knowledgable people on this forum than myself when it comes to Contract Law.

So the question is - Can Lloyds TSB get around this? ....and how?

Azrael_1701

TheRedAdmiral wrote: »

I appreciate the advice that is coming here.

I do actually work within the legal field. My specialism though is Personal Injury and not necessarily Contract Law.

I have my own opinion on banks, their practices, and whether I should pay the money they allege I owe. My opinion might be different to others but that is not the issue here.

To me this is a question of Contract Law. The question I would pose to the Court is as follows:

1) Do Lloyds TSB have a Contractual Right to pass any information (positive or negative) to any 3rd Party (including, but not limited to, CRAs) - Without a signed contract being in place?

Lloyds Bank would, of course, be offered the chance to enter a Defence and they may very well do so.

But there comes a point where the Court will actually wish to see a document that is signed by me and authorises them to provide data to CRAs - and they cannot provide it - as they have already confirmed.

Now my legal knowledge leads me to believe that Lloyds Defence would be Struck Out in such circumstances. But I accept that I dont know everything and I am sure that there are more knowledgable people on this forum than myself when it comes to Contract Law.

So the question is - Can Lloyds TSB get around this? ....and how?

Hello!

Im not sure about whether or not there needs to be a signed contract or agreement before data can be passed to the CRA's.

However, I think that you would need to prove that no such agreement exists. Even though the bank cannot supply a signed agreement, they dont have to, as data protection legislation states that after 6 years they can destroy such data, and they can claim that this has happened and as such get out of supplying you with one. In that case you would need to prove that it never existed in the first place, and I dont see how you could do that, although there may be a way. They are legally allowed to supply you with a blank contract if its been more than 6 years and the original has been "destroyed".

Az

TheRedAdmiral

Azrael_1701 wrote: »

Hello!

Im not sure about whether or not there needs to be a signed contract or agreement before data can be passed to the CRA's.

However, I think that you would need to prove that no such agreement exists. Even though the bank cannot supply a signed agreement, they dont have to, as data protection legislation states that after 6 years they can destroy such data, and they can claim that this has happened and as such get out of supplying you with one. In that case you would need to prove that it never existed in the first place, and I dont see how you could do that, although there may be a way. They are legally allowed to supply you with a blank contract if its been more than 6 years and the original has been "destroyed".

Az

Its certainly going to be an interesting one and I am seriously considering issuing proceedings on this.

If I word my Particulars of Claim right then the "onus" should be on the Defendant to prove that a signed contract is in place.

I personally have copies of contracts going back 10 years. So if a bank chooses, for whatever reason, to discard evidence then that is their lookout. I am not so sure the Court would be wholly sympathetic. In any respect - no contract exists as nothing was signed!