Consumer Credit Agreement

Writetime

Some advice, please! For around 20 years, I have been paying off what Lloyds Bank say were two 'loans' I had been given by them. I have paid every month, in increasing amounts over the years, which are now £25 per month each. Apparently, the interest on these 'loans' was frozen some years ago. After so long, I cannot even remember how much these original loans were for. Never seeing an end to this, I took the advice of Citizens Advice, who told me that the loans were not enforceable without the bank sending me copies of the original agreements. I sent off two £1 cheques to Lloyds, and requested that under the Consumer Credit Act of 1974, I was entitled to receive these copies from them. In the meantime, I have ceased paying each month. I have now been told by Lloyds that they no longer have copies of the agreements, and that by law, they can still enforce payment without them, as they do have records of how much I owe and how much I've paid. Can you please tell me where I stand legally? I have so far received one letter from a company who now represent Lloyds, (Westcott), saying I am obliged to continue paying. To me, 'obliged' does not mean I have to pay, merely that they would like me to pay. I have also been told that Lloyds cannot take me to court to enforce payment of these loans. What do I do?

sourcrates

Hello,

Once again total twaddle from the banks and the debt collectors.

If they have not complied with your request for information about your credit agreements, then those agreements are unenforceable in court until they do so.

As they have admitted they cannot comply, write and tell them you won’t be paying and not to contact you again.

They can still ask you to pay, but all legal means are taken away from them.

fatbelly

I'm surprised Lloyds are so confused by this. You made a request under the relevant legislation, paid the statutory fee and they have not complied (say they cannot comply!) with the request.

The Act itself is quite clear that

'If the creditor under an agreement fails to comply with subsection (1)— (a)he is not entitled, while the default continues, to enforce the agreement.'

The FCA rules, under which lenders must operate , flesh this out a bit in CONC13. It's too long to post here in full (worth googling and reading) but concludes:

However, where a firm is aware that an agreement is unenforceable because of non-compliance with an information request under section 77, 78 or 79 of the CCA, a firm should make it clear when communicating to a customer about a debt that the debt is in fact unenforceable. Failure to do so, in that case, would in the FCA's view unfairly mislead the customer by omission. Any communication that implies expressly or otherwise that a debt is enforceable when it is known that it is not, would be misleading. One way to avoid this would be for the firm to explain to the customer the full meaning of 'unenforceable'

This seems the complete opposite of what Lloyds are doing.

They can of course still comply if they put a bit of effort in, by reconstructing the agreement, but it seems that this requires a level ofcompetence Lloyds do not possess.

Writetime

Thank you very much for this information. Someone from Lloyds phoned me at 7pm tonight, telling me they no longer had my credit agreements. As they were so old, the lady said they no longer needed to keep them. I asked why they would throw away 'live' credit agreements, and she avoided responding. Instead, the lady told me I still had to pay, as the bank had proof of how much I owed and how much I had paid. I told her they could write down anything, but it didn't actually prove a lot without the agreements. I was told by her that I should continue to pay each month and to take my grievance to the Ombudsman. Can my credit rating be affected if I stop paying these monthly payments?

fatbelly

Writetime wrote: »

Thank you very much for this information. Someone from Lloyds phoned me at 7pm tonight, telling me they no longer had my credit agreements. As they were so old, the lady said they no longer needed to keep them. I asked why they would throw away 'live' credit agreements, and she avoided responding. Instead, the lady told me I still had to pay, as the bank had proof of how much I owed and how much I had paid. I told her they could write down anything, but it didn't actually prove a lot without the agreements. I was told by her that I should continue to pay each month and to take my grievance to the Ombudsman. Can my credit rating be affected if I stop paying these monthly payments?

The brief answer is no. The defaults would have been applied a long time ago and the entries dropped off 6 years after that. Only a ccj could bring these back to your credit file, and as things stand any attempt by them to start a claim could be stayed (stopped) by you.

As I see it the ball is in their court. There is no need for you to involve the ombudsman. They just need to comply with your request.

Writetime

Phew! Thank you both for your invaluable advice. I can sleep better tonight. I have been asking for copies of my credit agreements for a number of years, but have always been fobbed off, ignored, or had completely irrelevant replies, such as 'We cannot pay this £1 into your loan, as we cannot find a loan matching this account number'. I have gone round in circles, and until now, just ended up paying each month... which is probably what Lloyds was hoping I would do. Finally, I stuck to my guns and insisted they send me what I was asking for. It's been a nightmare, and I've felt really intimidated at times. I have always paid my debts and I'm not out to avoid paying what I truly owe. But I'm nearly 63, a full-time foster carer, and I think 20 years is more than long enough to pay for something you don't even know for sure if you should still be paying.

datlex

From personal experience with a loan an incorrect CCA can help reduce the amount of interest that you have to pay. In my case I only found out because the bank themselves reviewed the CCA and adjusted my interest accordingly. They did this without my asking. I too paid what I needed to each month until it was down to an amount I was able to pay off. Ask your bank to review the terms of your loan and make sure it meets the requirements of the Consumer Credit Act of 1974.

sourcrates

Writetime wrote: »

Phew! Thank you both for your invaluable advice. I can sleep better tonight. I have been asking for copies of my credit agreements for a number of years, but have always been fobbed off, ignored, or had completely irrelevant replies, such as 'We cannot pay this £1 into your loan, as we cannot find a loan matching this account number'. I have gone round in circles, and until now, just ended up paying each month... which is probably what Lloyds was hoping I would do. Finally, I stuck to my guns and insisted they send me what I was asking for. It's been a nightmare, and I've felt really intimidated at times. I have always paid my debts and I'm not out to avoid paying what I truly owe. But I'm nearly 63, a full-time foster carer, and I think 20 years is more than long enough to pay for something you don't even know for sure if you should still be paying.

This is an all to common occurrence, so just for information purposes only, and for anyone else who may find themselves in such a situation, once you have made the sec 77/79 request for information, enclosing the £1 statutory fee, your part in the process is then over.

Obviously you would keep a copy for your records, the onus is then on the creditor to supply what you have asked for, if they don't do that, or send something completely irrelevant, the account will remain unenforceable in court until such time a correct response is received, however long that may be.

You can chase it up if you wish, but the ball is firmly in their court, and if a court claim was issued, your defense would be non compliance with a CCA request.