Fixed sum credit agreements

sourcrates

Just come across this whilst browsing the other day, don't know if anyone else is aware of this.
Since 2008, anyone on a fixed sum credit agreement, for example, a loan or car finance, is supposed to receive a statement of account, at least every six months whilst the account is active.

If the creditor fails to provide the statements, they are not complying with the CCA 1974, part V1, section 77 A, they can't enforce the agreement, or charge interest or add default charges, for the full period of non compliance.

This is something I did not know.

Jon81

I had a cheque towards the end of 2014 from tesco bank for this very thing, Ive also had loans from nationwide and no statement but don't think they're being as proactive.

Spuddy27

Wait what?! :-/

I've had a 5 year loan with Santander since October 2013 and have never received any letters other than one telling me i'd been successful and the T&C's. What does that mean?

sourcrates

Spuddy27 wrote: »

Wait what?! :-/

I've had a 5 year loan with Santander since October 2013 and have never received any letters other than one telling me i'd been successful and the T&C's. What does that mean?

If they don't send you statements, they can't enfoce the agreement, should you default, nor can they add further interest or charges for the period until they send you a statement.

Unless you have defaulted it means nothing, carry on as normal.

Spuddy27

Ahh, no defaults and no plans to default any time soon

MrWillyWonka

Is this in regards to this: http://www.moneysavingexpert.com/news/loans/2014/11/tesco-starts-refunding-customers-over-paperwork-blunder

Particularly:

Under the Consumer Credit Act, lenders are not entitled to interest or arrears fees during any period that their statements don't comply with the Act.

The above quote suggests that interest could be refunded even if a default wasn't made? I've had a couple of loans and HP and I've always got statements yearly.

However http://www.legislation.gov.uk/ukpga/1974/39/section/77A states that No such period [of no statements] may exceed a year.

sourcrates

MrWillyWonka wrote: »

Is this in regards to this: http://www.moneysavingexpert.com/news/loans/2014/11/tesco-starts-refunding-customers-over-paperwork-blunder

Particularly:


The above quote suggests that interest could be refunded even if a default wasn't made? I've had a couple of loans and HP and I've always got statements yearly.

However http://www.legislation.gov.uk/ukpga/1974/39/section/77A states that No such period [of no statements] may exceed a year.

This is a separate issue, more about the wording included within the statement itself.

Everything a lender does has to comply with the consumer credit act, there are numerous parts of the act where they can fall down, rendering the agreement unenforceable until they do comply.
Statements are supposed to be sent at least every six months.

rizla_king

sourcrates wrote: »

Since 2008, anyone on a fixed sum credit agreement, for example, a loan or car finance, is supposed to receive a statement of account, at least every six months whilst the account is active.

It's yearly. Not 6 months. http://www.legislation.gov.uk/ukpga/1974/39/section/77A

Notices of sums in arrears if you are behind on an agreement must be 6 monthly. Not the same thing.

sourcrates

rizla_king wrote: »

It's yearly. Not 6 months. http://www.legislation.gov.uk/ukpga/1974/39/section/77A

Notices of sums in arrears if you are behind on an agreement must be 6 monthly. Not the same thing.

But the account is still unenforceable, and the debtor still does not have to pay interest or charges if they fail to provide statements, sec 6, sub sec A, B and C, that was the point I was making.

The statements should be provided so that :

"no such period may exceed a year", so every 6 months, 8 months whatever, is acceptable.

rizla_king

You said

at least every six months

which implies it is 6 monthly or less, and a frequency longer than that would no be acceptable and would fall foul of the law.

That is not true as as it is a least yearly.

So they would only not be entitled to enforce or make charges or ineterest if there was more than a one year gap between statements

sourcrates

rizla_king wrote: »

You said

at least every six months

which implies it is 6 monthly or less, and a frequency longer than that would no be acceptable and would fall foul of the law.

That is not true as as it is a least yearly.

So they would only not be entitled to enforce or make charges or ineterest if there was more than a one year gap between statements

Thank you for your honest, unbiased, opinion, and for correcting my error.