Author Topic: Reconstitutd credit greements  (Read 5123 times)

shocksoc335

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Reconstitutd credit greements
« on: Feb 17, 2011, 06:31:00 PM »
Reconstituted agreement suffices 24.02.10
   

In the latest in a line of decisions in favour of finance companies engaged in writing Consumer Credit Act 1974 (CCA) regulated business, the High Court has provided further guidance arising out of s78 CCA request for information.
In Carey & Others v HSBC Bank PLC & Others, His Honour Judge Waksman QC held:
 
  • Lenders can satisfy a s78 (and s77) request by providing a reconstituted version of the executed agreement, which may be reconstituted from sources other than the actual signed agreement. A copy of the original signed agreement itself does not have to be provided.
  • The copy provided must contain, amongst other things, the name and address of the debtor as at the date of the agreement.
  • The document need not comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 (CCAR) as to form, as at the date the agreement was made.
  • If an agreement has been varied, a (reconstituted) copy of the original agreement must be provided along with a (reconstituted) copy of the amended agreement.
  • A breach of s78 does not of itself give rise to an unfair relationship within the meaning of s140A CCA.
  • The court can exercise its discretion and make a declaration that there has been a breach of s78, depending upon the facts of the particular case. If the lender has admitted the breach in the proceedings, the court will not make such a declaration.
  • In determining whether the debtor has signed a document stated to contain the "prescribed terms", the court held that, for the purposes of s61 and of s127(3) CCA, the document need not be a single piece of paper. A physical connection between several pieces of paper is not necessary. Where the debtor's signature and the prescribed terms are on separate pieces of paper, the question of whether together they constitute one document is a question of substance, not form. Mere cross-reference to prescribed terms without a copy being supplied to the debtor at the time of signature would not suffice.
  • If the lender cannot establish, following a trial, that there was a document signed by the debtor containing the prescribed terms, that would not of itself entail an unfair relationship.
  • Comment This decision will hopefully put an end to many cases currently being dealt with which were instigated by claims management companies.
    It is clear now that a reconstituted copy of the original document will suffice. The judge held that, as a matter of good practice, lenders should consider telling debtors that a reconstituted document is just that. Even if an agreement cannot be reconstituted and therefore there is a breach of s78, although the agreement may be unenforceable pending compliance, that does not mean there is an unfair relationship.
    Procedures should be put in place to ensure that the information required to reconstitute documents is retained.



    Can anyone explain what this really means?



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    Shocksoc335

     
     
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    solvent

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    Re: Reconstitutd credit greements
    « Reply #1 on: Feb 18, 2011, 09:36:14 AM »
    That is very interesting......

    Although this is his guidance and one case only that went to High Court.

    We must hope that (and it usually does) that when delaing with a DCA directly and requesting CCA they have to find original CCA. Also with reclaiming credit card charges, the letter will be enough, as small claims court is the end situation not the high court.

    I wonder if that was a company representing a bunch of customers or something, as am wondering why it went to high court. It might have been one of these companies trying to get it written off as unenforcable.

    I wouldnt change any practice just yet, DCA's get CCA's as well as credit card companies.




    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #2 on: Feb 21, 2011, 07:22:04 AM »
    Thanks Solvent I'm inclined to agree!
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    James Falla

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    Re: Reconstitutd credit greements
    « Reply #3 on: Feb 22, 2011, 05:07:18 PM »
    My feeling on this is that ultimately the courts will try to take the view that common sense must prevail. As such if there is clear evidence that an agreement was made between a creditor and debtor and especially where some repayments have been made, the court will take the view that both parties did intend for there to be an agreement and that is should stand even if the origional signed agreement can not be found as long as the terms were fair.
     
    The arguements for and against unenforceable credit agreements are still rumbling on but recent judgements seem to have been ruled in favour of the banks an I get the distinct feeling that more and more claims that agreements are unenforceable will be thrown out. I guess we will have to wait and see.....
     
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    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #4 on: Feb 27, 2011, 10:59:08 AM »
    I know the Financial Ombudsman Service are also finding in favor of the creditors once a client has complained to them about not receiving a copy of a credit agreement. It seems the creditors are providing proof that the debt exists by way of statements that show payments have been made to the account.

    Ummmmmmmmmmmmmmmmmmmm
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    James Falla

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    Re: Reconstitutd credit greements
    « Reply #5 on: Feb 28, 2011, 04:03:57 PM »
    I know that to some people this will be somewhat of a controversial view, however my feeling is that if someone has already made a number of repayments towards a debt, this does go along way to proving that an agreement was in place and can therefore be enforced. At the end of the day, why would anyone start making repayments to a debt that they did not feel they owed?
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    L-E-E

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    Re: Reconstitutd credit greements
    « Reply #6 on: Mar 09, 2011, 09:49:27 AM »
    agreed James!
     
    Yes i think there may be some issues of mis selling but i do feel that with the backing of certain people/companys have used this as a beacon to attract people to other products that they offer.
     
    Lee

    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #7 on: Mar 12, 2011, 07:43:36 AM »
    Would this apply to Cat debt prior to April 2007?
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    James Falla

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    Re: Reconstitutd credit greements
    « Reply #8 on: Mar 14, 2011, 11:56:36 AM »
    Not sure what you mean exactly Shocksoc. Can you expand?
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    joanne1012

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    Re: Reconstitutd credit greements
    « Reply #9 on: Apr 27, 2011, 01:58:14 PM »
    hi i wonder if anyone can help me my partner was given a county court summons a while ago and agreed to pay a debt to a catalogue since then i have been on different websites and found that if they do not have the evidence that you have signed a contract then they cannot claim that you owe the debt with no proof the cab told us to pay it so we agreed the thing is we don't want this resting on our heads for the next 10 years this county court judgement can you tell me if we can do anything about this or is it too late hope you can help Joanne. :)

    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #10 on: Apr 27, 2011, 02:09:16 PM »
    Too late I'm afraid, once a CCJ has been issued you have lost the right to defend a claim on the basis of the company bot providing you with a signed credit agreement.

    You don't have grounds to set aside the CCJ either.

    The most important thing is to meet payment by the due date if not further enforcement action can be taken against you such as bailiffs etc.

    However there may be other options for you if you outline your full situation.

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    Shocksoc335
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    James Falla

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    Re: Reconstitutd credit greements
    « Reply #11 on: May 11, 2011, 06:49:43 PM »
    Hi Joanne
     
    Unfortunately shocksoc is absolutely right. The fact that the CCJ has been issued basically means that the court has recognised the debt and considers it lawfully owed by you. Interestingly, I was speaking to one of my legal collegues recently and they confirmed to me that even if a CCJ has been issued against a debt, if you make no further payments towards it and the creditor takes no further action against you, then after 6 years, the debt becomes statute barred.
     
    However, I would not recommend ignoring the debt once a CCJ has been issued. At this stage the creditor has two main options to enforce the debt. One is applying for an attachment of earnings against you to force payment from your wages. The other is to apply for a charging order against your property if you are a home owner. Non of these are appealing options.
     
    Can you afford to make the payments as required by the CCJ?
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    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #12 on: May 11, 2011, 06:54:09 PM »
    Technically James your colleague is incorrect under CPR the debt can still be enforced if a CCJ was issued but only AFTER the creditor applies for leave of the court.

    This means a district judge will have to agree. The creditor can at this stage send bailiffs out etc

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    Shocksoc335
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    James Falla

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    Re: Reconstitutd credit greements
    « Reply #13 on: May 11, 2011, 07:09:16 PM »
    Agreed Shocksoc
     
    A creditor can certainly enforce a debt once a CCJ has been issued. However, my understanding is that if they do not to do this (for whatever reason) for 6 years form the date the CCJ was issued, the debt then becomes statute barred at the same time as the CCJ comes off the credit file. Of course, if they do try to enforce the debt after 6 yaers and the debtor decides to fight on the basis that the debt is statute barred, the court will ultimately have to resolve the issue. Unfortunately there does not seem to be much case law around to give a very clear picture as to what would be ruled at this point. I have to assume the reason for this is that most creditors do take enforcement action before the 6 years is up.....
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    shocksoc335

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    Re: Reconstitutd credit greements
    « Reply #14 on: May 11, 2011, 08:08:03 PM »
    The Civil Procedure Rule 27 - rules 5 (Of the top of my head forgive me if I'm wrong) specifically state if the creditor applied for leave of the court after 6 years the debt can still be enforced via bailiffs, Attachment of Earnings Orders etc

    It very rarely happens though!

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