Is a debt enforceable if the terms of the Consumer Credit Act 1974 are breached?

apm902

I took out a £12K loan Start Up Loan from a lender in 2018. I got into difficulty paying the loan back and entered into a reduced payment plan to prevent the account being defaulted. However, when I contacted the lender 9 months after paying the agreed reduced repayment plan each month, they told me that they had defaulted me. They admit to not sending the correct default notice as is required by section 88 of the CCA 1974. Whilst the default was on my file, I applied for finance to fund a purchase order I received from a Chinese client worth circa £500K. Because of the default that had been registered on my credit file without my knowledge, my application for finance was rejected. What are my legal rights? Is the debt enforceable? Can I claim compensation for the loss of opportunity to supply the Chinese client?

apm902

Incidentally, the loan documents stipulated it as a personal loan and was to be under the jurisdiction of the CCA 1974.

[Deleted User]

Yes, the debt is still enforceable.

You can't claim compensation.

apm902

If a default is served without the correct paperwork, the lender has acted improperly surely? Otherwise why have the CCA? Do consumers haven protection from lenders?

[Deleted User]

Yes they do have protection.

The breach can be easily rectified by sending a default notice now.  However, at the moment, you got lucky by having an older default registered.  That is preferable to either an ongoing arrangement or a newer default.

apm902

thanks for your comment but I'm not sure I agree. The default that was registered without following the correct legal protocol (as is required by section 88 of the CCA 1974) caused me to be turned down for finance to fund a significant purchase order that would have got my business up and running. I fail to see what is lucky about that.  

[Deleted User]

It's lucky because an older default is far better than the newer one you would be arguing for.  

The arrangement would also have meant you wouldn't have got further credit.

apm902

thanks again, but any default, particularly one that was registered in breach of the CCA 1974, is not welcome at all. And in reference to the reduced repayment plan, I had mitigated all of our exsiting debt and paid nearly all of it off and I had a guarantee from a business partner with an exemplary credit record. In addition, the credit broker had knowledge of lenders who were willing to fund us but we weren't aware of the incorrectly registered default - that's why it was so damaging.

[Deleted User]

Defaults are rarely welcome.  But since you have one, and your only possible route is to swap it for a newer one, you need to deal with the situation.

apm902

Gosh, I didn't realise lenders could operate outside of the terms of the CCA!  I thought the whole point of it was to protect consumers from unscrupulous lenders. I genuinely thought lenders were legally bound to operate within the laws of England and Wales, I didn't realise the CCA is not worth the statutory paper its written on. If I am not presented with an opportunity to respond to a default, I am not given a fair and reasonable opportunity to prevent it. Doesn't seem fair and right to me. I have lost all faith in the legal statutes of this country if your comments are correct. 

[Deleted User]

apm902 said:

I didn't realise the CCA is not worth the statutory paper its written on. 

Neither did I. 

But then again, I haven't heard anyone say that.