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Is a Default Notice required for unregulated loan

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  • Is a Default Notice required for unregulated loan

    I wanted to know if it is a requirement that a default notice be served on an unregulated secured agreement and if it has been served would it have to comply with the default notice regulations?

    Thanks to all in advance
    Tags: None

  • #2
    Re: Is a Default Notice required for unregulated loan

    If a Lender & Broker both state that gave no advice regarding a loan how would a borrower know to expect. If the broker charged a fee for their services would they not be bound and have a duty to warn the borrower of any potential risks they might endure?

    How can a loan be granted if both Lender & Broker do not take any responsibilty in advising anything about loan the borrower takes out?

    Comment


    • #3
      Re: Is a Default Notice required for unregulated loan

      I assume this applies to a pre 2008 loan of over £25000?

      I know this may not be what you want to hear, but there is a clear responsibility on the borrower to make sure they know exactly what sort of agreement they are entering into. When you signed for the loan did you see the terms and conditions of it?

      Comment


      • #4
        Re: Is a Default Notice required for unregulated loan

        Yes casper this is pre 2008 and no I did not read all the terms and conditions.......long story...and my agreement is not headed with any information as to what type of agreement it is. I do know that it is an secured unregulated agreement after............but no info as to what it is.

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        • #5
          Re: Is a Default Notice required for unregulated loan

          Originally posted by jumper999 View Post
          Yes casper this is pre 2008 and no I did not read all the terms and conditions...
          Unwise.

          Comment


          • #6
            Re: Is a Default Notice required for unregulated loan

            ------------------------------- merged -------------------------------
            Originally posted by jumper999 View Post
            Can someone advise if a DN the DN below is accurate if a lender has to serve one on unregulated agreements, and if so must they complay with the DN regs?

            If the lender does not have to send a DN on an unreg agreement then why did they send...........and also the sum of arrears calimed on the DN are 100% incorrect.

            Any help or advice is appreciated.


            Last edited by jumper999; 28th October 2011, 10:45:AM. Reason: Automerged Doublepost

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            • #7
              Re: Is a Default Notice required for unregulated loan

              There was a Bank Holiday which was on the 3 May 2010 and default date to remedy was by 13 May 2010 giving 12 days to rectify.

              Comment


              • #8
                Re: Is a Default Notice required for unregulated loan

                I do not know about UNregulated DN's but I know that a DN for regulated agreements are 14 clear calender days so bank hols make NO difference for them


                Duno if this helps you or not jumper

                Comment


                • #9
                  Re: Is a Default Notice required for unregulated loan

                  If unregulated it is a contract. Due to the date it looks likely you should be reading the small print of the T&C's and looking at the possibility of an unfair relationship. CPUTR 2008?

                  Comment


                  • #10
                    Re: Is a Default Notice required for unregulated loan

                    Hi
                    The short answer is no, a DN is not required.
                    Default notices are a feature of the act. The court would have expected the creditor to have issued a letter before action, and to have explored all possible actions in order to resolve the problem as per the CPRs, but there is no legislative requirement that I am aware of that says the creditor must give the lender a defined notice before commencing proceedings in court.
                    Peter

                    Comment


                    • #11
                      Re: Is a Default Notice required for unregulated loan

                      I'm not too well up on this aspect of Default notices but what I have found is this.
                      Sparkie
                      Accurate Default Notices are vital

                      Introduction

                      Businesses engaged in lending or hiring regulated by the Consumer Credit Act 1974 should be aware of a recent Court of Appeal case highlighting the potential pitfalls of creditors failing to ensure that their documentation complies with the regulations.

                      In the vast majority of cases, before a lender or hirer can take action against a debtor or borrower, a default notice has to be served. The default notice has to comply with the Act and the relevant regulations (Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983). If a default notice in the proper form is not served, the action cannot proceed.
                      In this case*, the defendant hired a photocopier but failed to pay a quarterly instalment of its rent. The plaintiff served a default notice which substantially overstated the arrears which were then due. Despite this, the judge at first instance held that the default notice was valid and entered judgement for the plaintiff.
                      Correct procedures must be adhered to

                      On appeal, Lord Justice Kennedy held that the Act was enacted to protect consumers, most of whom were likely to be individuals. When contracting with a financial organisation, a consumer was bound to be at a disadvantage. The contract was likely to be in standard form and complex. His Lordship said that if it was said that a consumer had broken the terms of the agreement, the consumer needed to know precisely what had been done wrong and what was needed to put matters right. The lender has the ability and resources to do this and, if it does not do so accurately, it is only right that it should not take the next step. Under s88(1) of the Act there is a requirement that the lender should 'specify' not only the nature of the breach, but also what action is required to remedy it. In the context of this case, that meant specifying with reasonable accuracy what sum the hirer had to pay to remedy the breach.
                      The Court went on to say that an error that could be described as minimal might be overlooked, but the substantial inaccuracy in this case rendered the default notice ineffective, so the appeal should be allowed.
                      Tens, if not hundreds, of thousands of default notices are issued every day. This case illustrates how vitally important it is that any default notice is correct in form.

                      Comment


                      • #12
                        Re: Is a Default Notice required for unregulated loan

                        Section 87 9f the act
                        87 Need for default notice
                        (1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default
                        notice”) is necessary before the creditor or owner can become entitled, by reason of any
                        breach by the debtor or hirer of a regulated agreement,—

                        Peter

                        Comment


                        • #13
                          Re: Is a Default Notice required for unregulated loan

                          Thanks sparkie & peter.........looks like this only applies to regulated agreements.........what a bummer.

                          One thing if I may ask peter is that in an unregulated agreement must there be some reference or section of the borrowers rights?

                          I mean if they have any complaints can they go to the FOS or any other regulatory board.........or a section of the lenders complaint procedure be in the agreement?

                          Also is the CCTA (Consumer Credit Trade Association) a place where borrowers can submit their complaints to if they cannot reslove any complaints with the Lender.

                          Appreciate your input on this please and thank you in advance.

                          Comment


                          • #14
                            Re: Is a Default Notice required for unregulated loan

                            I was reading this term below which could be looked at as being an unfair term:

                            ). It applies to any clause which excludes or hinders the right of the consumer to take legal action or exercise any legal remedy (including the reference of any disputes to arbitration); unduly restricting the evidence available to the consumer or imposing upon him a burden of proof which should rightly lie upon the seller or supplier. All of these clauses are subject to restrictions under the Act except for that relating to arbitration. Under s 13(2) any written agreement to refer a dispute to arbitration is not subject to any of the Act's controls. The inclusion of this provision in the Schedule is to be welcomed as although it can be argued that such references can be to the benefit of the consumer,there have been occasions where the consumer has not in fact benefitted therefrom 29


                            I have read that the CCTA operates a reconciliation secvice and arbritation scheme for customers who cannot reslove their complaints with member firms.

                            Who on god's earth would know what an arbritation was.......................................

                            Comment


                            • #15
                              Re: Is a Default Notice required for unregulated loan

                              This was useful reading

                              Compulsory arbitration clause in consumer contract not binding on the consumer; right of access to courts should be reserved (Commercial contracts newsletter, October 2008)


                              Summary and business impacts: All businesses which deal in some way with consumers will be interested in Mylcrist Builders Ltd -v- Mrs G Buck [2008] EWHC 2172 in which the High Court held that a clause in a consumer contract submitting all disputes to arbitration fell foul of the Unfair Terms in Consumer Contracts Regulations 1999 (the "Regulations") and as a result was not binding on the consumer. Several authorities were found to support this approach, indicating as a general rule that dispute resolution provisions in consumer contracts should preserve the right to bring proceedings before a court. Ramsey J noted in particular:
                              • the clause was of a type listed in the "grey list" (Schedule 2 to the Regulations) as potentially unfair;
                              • its effect was to prevent the consumer having access to the courts;
                              • it was insufficiently clear and prominent; and
                              • the consumer would have been surprised by, and would have objected to, its inclusion, had she been made aware.

                              My agreement states if I have any complaints or issues I should contact the CCTA as they run and maintain a arbritation and reconsiliation scheme............now a bit confused as to which codswollop is right.............

                              Comment

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