Robinson Way Court Claim

[Angry Cat]

Re: Robinson Way Court Claim

Notice of sums in arrears for fixed sum credit/hire agreements

A new Section 86(B) in the 1974 Act requires notices of sums in arrears to be served on debtors/hirers under fixed sum credit or hire agreements.
Points to note in relation to this new section include:

• The first arrears notice must be sent if the debtor/hirer must have made at least two payments under the agreement and the agreement is in arrears by no less than the amount of the last two payments.
• The first arrears notice must be sent within 14 days of the above.
• After the first notice, so long as the account is in arrears, subsequent notices must be sent at least once every six months (even if further arrears accrue).
• The need to send a notice ceases when the customer is no longer in arrears or a court judgment has been given concerning the debt.

Again the Regulations contain specific requirements as to content (see below). Significantly, the requirements vary between that which must be contained in the first required notice and that required in subsequent notices. This reflects concerns expressed during the DTI consultation that it would be technically very difficult to develop systems to identify the initial trigger point requiring the arrears notice, particularly for agreements which pre-date 1 October 2008 where this may have happened some time in the past. Consequently, the first arrears notice concentrates on the amount of the arrears, whereas subsequent notices must contain more detail about the amounts of payments made and payments missed.
Each notice will require:

• A statement that the notice is given in compliance with the 1974 Act and a form of wording encouraging the debtor/hirer to discuss the state of his account with the creditor/owner. NB there is flexibility in the wording that may be used.
• Certain information giving contact details and information to identify the agreement.
• A statement notifying the debtor/hirer if default sums and interest will accrue.
• A statement that notices will be served every six months while the account is in arrears.
• For subsequent notices the Regulations require, among other things, information relating to payments in, interest or other charges accruing, and the amount and date of any other movements in the account during the period to which the notice relates together with the account balance at the end of that period.

Notice of sums in arrears for running account credit agreements.

A new Section 86(C) in the 1974 Act and the Regulations impose similar requirements to those outlined above in relation to running account credit agreements. The requirement for timing and frequency of service of such notices is, however, calculated by reference to the existing obligation to serve periodic statements. There is no 'first and subsequent' notice distinction.