What does “unenforceable” actually mean?

Magic86

I sent off a CCA as suggested on this forum for on of my credit cards which had been sold onto a 3rd party.

It has been confirmed that up until now the debt is unenforceable however this may change if they can locate the correct paperwork at a later date. Which I expect them to do if I’m honest.

But if not, what does unenforceable actually mean?

The letter indicates the only difference is they can’t take me to court? Is that correct?

Thanks

fatbelly

This is from the FCA CONC guidance:

5) In the judgment of McGuffick -v- The Royal Bank of Scotland plc [2009] EWHC 2386 (Comm) Flaux J held in a case under section 77 of the CCA that passing details of a debt to a credit reference agency and related activities do not constitute enforcement under the CCA. He also held that steps taken with a view to enforcement, including demanding payment from a claimant, issuing a default notice, threatening legal action and the actual bringing of proceedings, are not themselves 'enforcement' under the CCA. On the other hand he confirmed that the actions listed under sections 76(1) and 87(1) of the CCA did amount to enforcement notwithstanding that some of the actions 'less obviously' amounted to enforcement. These actions are demanding earlier payment, recovering possession of goods or land, treating any right conferred on the debtor by the agreement as terminated, restricted or deferred, enforcing any security and terminating the agreement.

(6) While Flaux J agreed with the decision of HHJ Simon Brown QC (sitting as a Deputy High Court Judge) in Tesco Personal Finance v Rankine [2009] C.C.L.R. 3 that commencing proceedings was not enforcement, but a step taken with a view to enforcement, both he and HHJ Simon Brown appear to have been drawing a distinction between commencing proceedings and entering judgment in those proceedings.

(7) This guidance deals only with the question of whether an agreement is unenforceable in relation to sections 77, 78 and 79 of the CCA. A lender's rights to enforce an agreement may be restricted for a variety of reasons, by the Act, by or under the CCA and by virtue of the general law.

(8) 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'.

So the courts decided that 'unenforceable' means they can do pretty much everything except get a judgement (ccj) against you. In practice it would be pointless a creditor paying for a court claim when a judge would be unable to give them a ccj.

However, as you say, this may just be temporary unenforceability if they do indeed come up with a copy of the agreement.

sourcrates

If they cannot provide what they are supposed to, then that means they cannot take action through the courts to recover the debt.

So they cannot force you to pay, they can ask you to pay, they can still record the default on your credit file, but they cannot enforce there rights though the courts.

Edit, cross posted with fat belly.

Lynnyr3

Could I ask for a bit of advice please? Should I continue to make payment of an agreed amount while waiting to hear back about a CCA request? Thanks in advance.

sourcrates

Lynnyr3 wrote: »

Could I ask for a bit of advice please? Should I continue to make payment of an agreed amount while waiting to hear back about a CCA request? Thanks in advance.

If you have made a request under sec 77/79 CCA 1978, you are not obliged to carry on making payments, but it may be best practice until you know the outcome.