yup Pt2537 is here now too

[Guest]

Re: yup Pt2537 is here now too

Peter, the problem I have with this point is that if a creditor controls the destination of some of the credit but not the rest, e.g. a consolidation of debt, but the agreement is not multiple and says that the debtor is being advanced the whole amount but isn't, then its a partly restricted and partly unrestricted agreement. Such an agreement should either be multiple or there should be 2 agreements. Otherwise it is misleading and should be uneforceable for lack of clarity.

I was also under the impression that the draftsman of the CCA 1974 differed from the courts on the interpretation of ss 11 and 18?

Hii

yes Francis Benion is very vocal on the subjet, but there again he is talking about creditors avoiding regulation by concealin one loan in another.

Very naughty. i totally agree with him on this unfortunately the courts havnt as yet.

Personally i believe that if a loan is regulated and consists of sepperate parts but those parts have a common repayment interest rate etc then the section simply allows the various parts of the act fall into whatever parts of the legislation fits that particilar type

Peter
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On the multiple agreements subject, bit randomly but while you CCA peeps are looking , these flexiloans - where you have a lump sum advance and a total charge for credit, but then it rolls over and you use the loan account like a credit card with a credit limit, monthly payments etc - would that be a multi agreement ?

Does te available credit depend on the orriginal ballance being reduced, in other words you pay 100 off your initial advance then you have 100 to draw on.

So total credit = credit limit so to speak

peter

[Ihaterbs]

Re: yup Pt2537 is here now too

Hii

yes Francis Benion is very vocal on the subjet, but there again he is talking about creditors avoiding regulation by concealin one loan in another.

Very naughty. i totally agree with him on this unfortunately the courts havnt as yet.

Personally i believe that if a loan is regulated and consists of sepperate parts but those parts have a common repayment interest rate etc then the section simply allows the various parts of the act fall into whatever parts of the legislation fits that particilar type

Peter

An agreement states: credit advanced £20k with a PPI element of £6k taking the total amount of credit to £26k. Monthly payment is stipulated both jointly and separately and the interest is same on both.... multiple agreement or has the creditor avoided the Act.

[Guest]

Re: yup Pt2537 is here now too

An agreement states: credit advanced £20k with a PPI element of £6k taking the total amount of credit to £26k. Monthly payment is stipulated both jointly and separately and the interest is same on both.... multiple agreement or has the creditor avoided the Act.

Hi you could say that it was one being restricted one unrestricted you may well be right.

Do i think they both require sepperate agree ments no i dont.

I think the act contains any regulations nessesary for both/iether.

What applies to one will effect that part what effects the other affects that part

peter

[Guest]

Re: yup Pt2537 is here now too

Hi you could say that it was one being restricted one unrestricted you may well be right.

Do i think they both require sepperate agree ments no i dont.

I think the act contains any regulations nessesary for both/iether.

What applies to one will effect that part what effects the other affects that part

peter

Sorry just re-read your post, you mean an agreement before the financial limit was`raised.

I think this probably would require sepperate agreements as otherwise as you say the loan would escape regulation. Sorry about that brain not working

peter

[militantconsumer]

Re: yup Pt2537 is here now too

What did the Judge make of the multi-part agreement argument?

Just to clarify on this, Ihaterbs.

1. Egg Cards
The case we are all talking about was regarding an Egg CARD and it mainly hinged on the fact that the old Egg Card agreements did not contain the prescribed term "credit limit" but instead used various terms such as "approved limit" and "individual limit". I have included a copy of an example agreement below.

PT's main argument was that a layperson would not understand that these alternative limit terms were in fact the "credit limit".

Thus there was a failure to state a prescribed term, and this would render such pre-2007 agreements unenforceable due to s127(3) of CCA 1974.

PT also had other more minor issues with the agreements such as the APR being incorrectly stated due to the impact of cash advances.

Until we see the full judgment we won't know whether those other points are still valid for defending any claim, but it sounds like the "credit limit" defence no longer has any mileage in it.

2. Egg Loans
The multiple agreements point under section 18 of CCA 1974 relates to Egg LOANS such as the second image below.

This is NOTHING TO DO WITH the Slater court case judgment that we are all waiting for.

But PT did have a case ongoing with one of these agreements. It was settled out of court.

The argument here was the PPI was added to the loan and that PPI was "restricted credit" whereas the principal loan was "unrestricted credit". Those two terms are defined by section 11(?), and then section 18 talks about so-called "multiple agreements" which mix the two types of credit, saying they should be treated as two separate agreements with two sets of prescribed terms.

As you will see, the Egg Loan agreement below (2nd image) just lumps it all in together, and it's very unclear what the monthly payment is for and whether interest is being charged on the PPI (which it actually was, at the same APR as the principal loan).

Hence again a failure to state the prescribed terms properly, and again potentially unenforceable by virtue of s127(3).

Below are extracts from the two different types of agreements.


TYPICAL EGG CARD AGREEMENT

TYPICAL EGG CARD AGREEMENT

TYPICAL EGG LOAN AGREEMENT WITH PPI

TYPICAL EGG LOAN AGREEMENT WITH PPI

[pt2537]

Re: yup Pt2537 is here now too

An agreement states: credit advanced £20k with a PPI element of £6k taking the total amount of credit to £26k. Monthly payment is stipulated both jointly and separately and the interest is same on both.... multiple agreement or has the creditor avoided the Act.

HHJ Platts gave a judgment in Yates & Nemo where he held such an agreement would be multiple and would fall within the act

He distinguishes heath very well too and refers to the relevant parts of the heath judgment

[basa48]

Re: yup Pt2537 is here now too

Is there any mileage left in the argument that Egg "ended" a large number of agreements in early 2008, yet still required repayment???

[Guest]

Re: yup Pt2537 is here now too

iHi Just joining in if thts ok, this from benion imo it shows how an agreement can be multile but not require seppeerate agreements

The Act does mean that. However the effect is not as troublesome as these commentators
think. All section 18 says about say a fixed-sum debtor-creditor agreement is that it is to be
treated as an agreement in both of those categories. It is a fixed-sum credit agreement, and it
is a debtor-creditor agreement. So any provision of the Act expressed in terms of fixed-sum
credit applies to it, and any provision expressed in terms of debtor-creditor agreements
applies to it. That is only what one would expect. The agreement is a multiple agreement, but

this presents no practical problems.

Peter

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Is there any mileage left in the argument that Egg "ended" a large number of agreements in early 2008, yet still required repayment???

Hi
NO in my view there never was.

There is no reason why a creditor cannot terminate a credit card agreement whenever they want without notice, there is nothing in the act tht prohibits it so it is a purely contractural matter, down to the t and c.
This is to be remedied when the Euroeain directive which comes into force next year this adds sections into the act tht requires creditors both to give notice and explain why they are terminating

Peter

[pompeyfaith]

Re: yup Pt2537 is here now too

I thought a termination notice was notice confused now

[basa48]

Re: yup Pt2537 is here now too

Hi
NO in my view there never was.

There is no reason why a creditor cannot terminate a credit card agreement whenever they want without notice, there is nothing in the act tht prohibits it so it is a purely contractural matter, down to the t and c.
This is to be remedied when the Euroeain directive which comes into force next year this adds sections into the act tht requires creditors both to give notice and explain why they are terminating

Peter

So if a creditor can terminate an agreement at any time for no reason why did Bennion write sections 87/88/89 & 98 in the Act?? If the creditor can terminate at any time it would not matter whether the debtor was in default or not.

If as you say it becomes a purely contractual matter is it not an unfair term to allow the creditor to terminate the line of credit whilst still requiring the debtor to make regular repayments. i.e. the benefit to the creditor is not diminished whilst the benefit to the debtor is removed.

[Guest]

Re: yup Pt2537 is here now too

So if a creditor can terminate an agreement at any time for no reason why did Bennion write sections 87/88/89 & 98 in the Act?? If the creditor can terminate at any time it would not matter whether the debtor was in default or not.

If as you say it becomes a purely contractual matter is it not an unfair term to allow the creditor to terminate the line of credit whilst still requiring the debtor to make regular repayments. i.e. the benefit to the creditor is not diminished whilst the benefit to the debtor is removed.

Hi

No, i know it doesnt sound fair but it is howver the case. If the creditor wishes to pursue in court of coursehe has to terminate under section 87, but otherwise as a none default termination he does not have to give notifictio on an open ended agreement.

I suppose if you think about it it has to be the casethat either party can terminate this kind of agreement at any time.

Otherwise wvery agreement would last eternally.

If you said that an agreement can only be terminated by the consnt of both parties than the creditor have to provide credit forever if the debtor did not consnt not a likely scenario.

Peter
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Hi
Sorry didnt annswer the second part of your question.

I suppose they would say the benifit to the debtor was that they still had ther money. if the t and cs did not contin some sort of notice period before termination or it was very short there may be a case for a unfair terms regs, dont think it would succeed but as far as the CCA goes currently this is the case.

Peter

peter

[Guest]

Re: yup Pt2537 is here now too

Hi
This may helpit is from the OFT postcontractural informatio guidlines

6.8 Under section 98 of the 1974 Act, the creditor is not entitled to
terminate a regulated agreement (in non-default cases) unless he
provides the debtor with a notice of his intention to terminate at least seven days before taking such action.

6.9 Enforcement and termination notices are not needed where an
agreement is for an indefinite duration or where notice is served at the end of the period specified in the agreement for its duration.

Peter

[basa48]

Re: yup Pt2537 is here now too

I thought a termination notice was notice confused now

I'm not confused, just well and truly screwed!!

I mistakenly understood from early posts in a CAG thread that the 'approved' argument was decided and we were only awaiting a decision on costs. Fool me!

Also I was led to understand the Ending letter was subject of a possible class action and Egg were so scared they would never take action. That is obviously bo**ocks too.

Thanks CAG.

[Angry Cat]

Re: yup Pt2537 is here now too

HHJ Platts gave a judgment in Yates & Nemo where he held such an agreement would be multiple and would fall within the act

He distinguishes heath very well too and refers to the relevant parts of the heath judgment

We all put in a massive amount of work OTR re: multi-part agreements.

Have links to the above judgements been posted up on this site yet?

[Angry Cat]

Re: yup Pt2537 is here now too

A default notice is required under s87, before an agreement can be enforced or, terminated.

One also has to look at matters relating to the Unfair Relationships:
http://www.oft.gov.uk/about-the-oft/...unfair/#named2

At this stage, Egg may have won a battle (?) but they have NOT won the war!