If a lender has no signed agreement from a customer, is the debt enforceable?

AndyT678

So basically the bank made a mistake and paid £16k into your friend's account.

They will figure it out and they will want it back. There is zero chance that your mate is going to get to keep this "free" money.

Foxy-Stoat_3

AndyT678 wrote: »

So basically the bank made a mistake and paid £16k into your friend's account.

They will figure it out and they will want it back. There is zero chance that your mate is going to get to keep this "free" money.

OP wants to know legal precedents not opinions...I made that mistake already...doh !

timbo58

If (what I am assuming is) your assertion is accurate, then it would be the same as a bank error in your favour erroneously crediting your account with £16k.

If this was the case then as soon as the lender realises they are 'down' £16k they can ask for it back since there is a traceable route -the account it was credited to.

Rhind v Commercial Bank of Scotland (1860)
This is further touched upon more clearly in the 1968 Theft act.

It states that: "A person is guilty of an offence if:

(a) a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest;

(b) he knows or believes that the credit is wrongful; and (c) he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled."

I think the absence of the paperwork being used as a reason to not at least make the repayments properly falls into the latter clause.

The fact they do not have a paper trail showing a legal agreement isn't really a major issue, in fact it could be a hindrance to the debtor -since without evidence of an agreement between them both, the lender could demand an immediate repayment of the loan.

In which case Stators advice is very good, provided it goes into an instant access account with reasonable interest (open a tesco current account for example).

Of course I am not a fully qualified solicitor, but it's highly unlikely you'll get one of those giving advice on a free forum, so you can accept my advice or not.

InsideInsurance

Tom_R wrote: »

Yes, I googled that just now (the change in the loophole re lenders no longer having to produce an ORIGINAL agreement) but my understanding from what i read was that they still had to produce a COPY of an agreement, as a minimum compliance with the consumer credit act.

Yes they have to be able to produce a reconstituted copy. IE as these things are computer generated they need to be able to have the computer regenerate the document as it would have on the date it was issued. These wordings dont change often and they will have the things like the APR/ your name etc on file to be able to do it.

Tom_R

This is a minefield, and I'm hearing many differing opinions from here and from another forum also. very difficult to know what the hard and cold legalities really are.


SO...

* It's commonly agreed that a lender DOES have to provide a facsimile or copy of a signed agreement as the minimum compliance with teh CCA, in order to stake claim on a debt
* They can't do that, by their own admission. And at this point they claim they haven't even made payment on this agreement.

However, it doesn't take a genius to consider that eventually their P&L will have a £16k hole in it and will be picked up at some point.

So, I think my friend should stick the £300 a month that was due to this lender in to a savings account for his kid.
If and when the lender spots this gap in their accounts and comes a-knocking, then they can begin the process of legalities in the safe and comfortable knowledge that he has the funds to make all the payments owed, should the judgement fall against him.

What you reckon? Reasonable strategy?

glentoran99

I reckon the department he contacted hasnt recieved the paperwork yet and it will be there in a matter of course, and everything will be in order and this thread rendered pointless

Tom_R

glentoran99 wrote: »

I reckon the department he contacted hasnt recieved the paperwork yet and it will be there in a matter of course, and everything will be in order and this thread rendered pointless

haha.
Very possibly!

Clive_Woody

Tom_R wrote: »

Hi,
They tell him that they have yet to receive any signed paperwork back from my friend. As such, the loan in question is actually still in application status, hence why they haven't paid out.

See if you can get them to confirm this in writing........

DevCoder

Tom_R wrote: »

This is a minefield, and I'm hearing many differing opinions from here and from another forum also. very difficult to know what the hard and cold legalities really are.


SO...

* It's commonly agreed that a lender DOES have to provide a facsimile or copy of a signed agreement as the minimum compliance with teh CCA, in order to stake claim on a debt
* They can't do that, by their own admission. And at this point they claim they haven't even made payment on this agreement.

However, it doesn't take a genius to consider that eventually their P&L will have a £16k hole in it and will be picked up at some point.

So, I think my friend should stick the £300 a month that was due to this lender in to a savings account for his kid.
If and when the lender spots this gap in their accounts and comes a-knocking, then they can begin the process of legalities in the safe and comfortable knowledge that he has the funds to make all the payments owed, should the judgement fall against him.

What you reckon? Reasonable strategy?

For your first point, there does not need to be a signed copy, as previously mentioned they can just reconstitute an agreement with the T&C's , APR and capital and interest amount. They will have proof funds were transferred to the relevant party. Thats all a court would need.

rizla_king

They dont need to provide a copy of any agreement.

The law says under s77 or 78 that on request that

"shall give the debtor a copy of the executed agreement (if any)"

and it shall not be enforceable until they do.

The "if any" part is there to take account of cases where there is not an executed agreement, such as here, which means their duty to supply a copy does not apply. So neither does the sanction of unenforceability for that reason.

The only other part of that which would forbid enforcement would have been under s127 which blocked enforcement if no original was signed.

s127 was repealed in 2007 to prevent people getting away with that sort of thing, so now if the bank can prove your FRIEND received the money they can sue your arsse off for it with nothing legally to stop them.