CCA and overdraft, Enforcement Notice, DN etc...........

[nelliewops]

Hi folks!

Wonder if anyone can help me on this one please?

I have an agreed overdraft on my current account which has an outstanding balance entirely made up of bank charges.

I realise that the CCA 1974 doesn't cover current accounts per se, but believe from reading around the forums that under section 78 of the CCA it is possible to request a copy of the overdraft facility letter. Am I right in this assumption?

Firstly I have done this and my bank have written back as if my request was for a credit card, saying the number provided is incorrect - this appears to be either a fob-off or else they are unaware that overdrafts are covered by section 78...........unless I am wrong in my assumption that section 78 does indeed cover overdrafts

Secondly, the bank issued an Enforcement Notice served under section 76 (1) of the CCA 1974 in relation to this overdraft balance - is that correct or should it have been served under section 78?

Also, what is the difference between a DN and an Enforcement Notice please?

This is Lloyds, btw............

Many thanks,

Nellie x

[Guest]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi
No I am afraid the bank do not have to send a copy under section 78.
Section 74 of the act exempts overdrafts from part V of the CCA.
This means that an agreement is not required to be made for an overdraft
The section 76 notice is to tell you that they intend to terminate your agreement and demand early payment, usually.
They cannot take you to court on the strength of this for that they have to send you a default notice under section 87.
　
Regards
Peter

[TomThumb]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi
No I am afraid the bank do not have to send a copy under section 78.
Section 74 of the act exempts overdrafts from part V of the CCA.
This means that an agreement is not required to be made for an overdraft
The section 76 notice is to tell you that they intend to terminate your agreement and demand early payment, usually.
They cannot take you to court on the strength of this for that they have to send you a default notice under section 87.
　
Regards
Peter

Are you sure on this Peter? My bank continuously tell me that an overdraft is not covered by the CCA1974, I have quoted back from the Coutts case and await them admitting its covered but exempt from most of the CCA. To date I've not received a default notice from them just a Formal demand for repayment.

S.

[Guest]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Are you sure on this Peter? My bank continuously tell me that an overdraft is not covered by the CCA1974, I have quoted back from the Coutts case and await them admitting its covered but exempt from most of the CCA. To date I've not received a default notice from them just a Formal demand for repayment.

S.

Hii

Absolutely positive.

The overdraft is coverd by the CCA but as i said section 74 of the act says that you do not have to have a sepperate agreement for it so there is nothing for them to supply.
All other requirements ,protections and remedies apply.

Peter

[dad]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Nellie,

I acknowledge that PeterBard's view is the generally accepted position, and indeed he is a highly respected poster, however I am going to dissent with his position as follows:

1. CCA Section 74 and more importantly the determination exempts Banks from complying with Part V of the CCA74, which means they can give an overdraft without a written agreement, ONLY PROVIDED that they have complied with all three requirements of the determination issued by the OFT. See 'Coutts v Sebestyn' in the Court of Appeal. This includes sending the appropriate letters when the overdraft was granted. I doubt whether these letters can be requested under section 77-79 of the CCA. But if proceedings are started against you you should seek disclosure of the letters to see if the bank is entitled to the exemption from Part V.

2. If, not withstanding the exemption, you did in fact sign a written overdraft credit agreement, I believe that you are entitled to request it under section 78 as it actually exists. (Note: this view has never been tested in court and any bank is likely fight it tooth and nail if you do argue this line).

3. You said you had an agreed overdraft. If you are not in breach of the agreement and the bank wishes to take one of the actions listed in CCA74 section 76(1) then a s76 notice is the correct way forward.

HTH

Dad

[Guest]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi
Section 78 requests a true copy of the executed agreement, there isnt one.

You could try requesting a copy of the letter you mentioned under an SAR,from previous experiance you will find that they will say that notification obligation was fulfilled by generally available information, this is a matter of argument. They cannot take you to court untill theyu issue a section 87 default notice that is fact.

Regards
Peter
------------------------------- merged -------------------------------

Nellie,

I acknowledge that PeterBard's view is the generally accepted position, and indeed he is a highly respected poster, however I am going to dissent with his position as follows:

1. CCA Section 74 and more importantly the determination exempts Banks from complying with Part V of the CCA74, which means they can give an overdraft without a written agreement, ONLY PROVIDED that they have complied with all three requirements of the determination issued by the OFT. See 'Coutts v Sebestyn' in the Court of Appeal. This includes sending the appropriate letters when the overdraft was granted. I doubt whether these letters can be requested under section 77-79 of the CCA. But if proceedings are started against you you should seek disclosure of the letters to see if the bank is entitled to the exemption from Part V.

2. If, not withstanding the exemption, you did in fact sign a written overdraft credit agreement, I believe that you are entitled to request it under section 78 as it actually exists. (Note: this view has never been tested in court and any bank is likely fight it tooth and nail if you do argue this line).

3. You said you had an agreed overdraft. If you are not in breach of the agreement and the bank wishes to take one of the actions listed in CCA74 section 76(1) then a s76 notice is the correct way forward.

HTH

Dad

Hi
Just read this

Seems pretty accurate to me ,in what way do we differ?

Except to say that really they did not need to send a notice under section 76 at al unless the facility was issued for a set periodl.

Peter

[dad]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi


Seems pretty accurate to me ,in what way do we differ?

Section 78 requests a true copy of the executed agreement, there isnt one.

For one of my overdrafts there WAS a written agreement (not withstanding the s74 exemption).

In such a case if the bank chooses not to rely on the exemption and make you sign a written agreement then I believe you are entitled to make a s78 request.

HTH

Dad

[Guest]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

For one of my overdrafts there WAS a written agreement (not withstanding the s74 exemption).

In such a case if the bank chooses not to rely on the exemption and make you sign a written agreement then I believe you are entitled to make a s78 request.

HTH

Dad

Hi

Well yes of course, you are entitled to make a 78 request anyway the quesyion is will the creditor have to, respond.

I suppose they would the section does say "IF ANY" so prviding they are honest and admit theere is an agreement.

Peter

[TomThumb]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi

Well yes of course, you are entitled to make a 78 request anyway the quesyion is will the creditor have to, respond.

I suppose they would the section does say "IF ANY" so prviding they are honest and admit theere is an agreement.

Peter

Hmm this is getting interesting... I can remember back to the year dot when I took out the account and I had to fill in a load of stuff... the overdraft came with the account so would the document I filled out become the "executed agreement" if it allegedly mentioned the terms of the overdraft at that time?

Nellie, can you remember how you took out the account and how the overdraft came about?

[pandora]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi ...

As far as I am aware from my own research, ODs are partially covered by the CCA, partially being just the OD element which is classed as a debtor creditor agreement. This is supported as already said by the Coutts case, but also verified by CRAs regarding their permission of recording of data, in saying that it is done so as the OD element of a bank acc is a debtor agreement, which is regulated under The Act.

That being said, no there isn't as such a signed agreement as one would expect with a credit card or loan, but when the OD was granted they should/would have sent you a letter confirming the amount of authorised OD, the rates of interest applicable and should have also included how the OD may be withdrawn i.e how much notice they would give you, under what circumstances.

Each time the level of authorised OD changes (either increase or decrease) .. you should have got a replacement letter confirming the revised arrangements, with the same info.

This is what they need to supply you in respect of an equivilent "CCA" request.

If the OD is withdrawn, lets say just because the bank feel like it ... then they issue a S76 (formal notice of request requesting the repayment of your OD).

If you are in breach of your OD (creditor/debtor) agreement (and lets face it thats why they are normally withdrawn by the bank) i.e exceeded your authorised amount, then the default notice issued is done so under s87(1) of the CCA - and as such the DN has the same requirements for compliance as if issued for a CCard or Loan i.e it must comply with the required time for service, amounts requested i.e genuine arrears (which is where it can get a bit sticky under what is terms as arrears under an OD recovery ... ), correct format etc ... if it isn't compliant than IMHO the same consequences arise i.e the credior is unable to benefit from s87 (i.e entitled to any sum payable/due in the future .. which is where it can be a bit sticky with ODs) ... but if it come to it and it were me .. I wouldn't tell them they were entitled to the arrears, I would simply say you have lost the benefit of S87 and let them tell me what they think they are entitled to.

Once you go into unauthorised terrority ... they need to send you within 3 months of this, notification of the rate of interest being charged monthly & annually(which will be higher than than of your authorised OD) , and details of recurring charges relating to the unauthorised OD.

It is my understanding that if they don't do this, the OD looses the benefit of part V exemption and becomes fully regulated under the CCA74, and accordingly for enforcement a correctly executed CCA must be presented to the Court, which of course they can't because technically (and generally) there isn't one. (I say generally becuase you have said you have definately signed an agreement).

Anyway, just my observations and understandings from my own experiences and research ... but it all goes in the mix and hopefully will be of some benefit to you ... or stir more discussion which will have the same result.

Hope I've been of some help ... :tinysmile_grin_t:

P

[Chalkitup]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Wow ... coincidence ..... just happened to look at this thread after ten mins ago I posted the following on "another" site as I have a thread going there for this particular account .......

Can someone please confirm that what Nat West have put in their recent letter to me is incorrect.

Basically I added a CCA request in my last letter ....... I know overdrafts are exempt from part 5 but there is of course the OFT Determination ...... where the bank must inform me of credit limit, annual rate interest, charges, procedure for terminating ....... all of which must be in writing ........ OR so I had always understood.

Nat West replied with the following ......... which surely is totally misleading ....

"Under s74(1)(b) of the CCA, overdrafts are exempt from part 5 of the CCA which is the part governing the content and format of credit agreements."

(OK so far I think .... but then they continue)

"This means that for borrowing which is by way of overdraft, no written agreement is required - this fact has been accepted by the Office of Fair Trading and the FSA". (This is the bit I take as misleading as OFT Determination not mentioned).
"The authorisation of a debit by a customer and the paying away of money by the bank on their behalf is sufficient contract for the purposes of an overdraft."

[pandora]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi Chalky ...

Part V is ok - we know what letter they have to send though ..

But if NW are to believed .. and they don't have to provide or send you any written agreement ... which IMHO is utter tosh ... how on earth do you know:-

1. How much your authorised od is ? ( so that you don't exceed it ???)
Or
2. What the rates of interest are, and penalties &how it may be recalled .. (but my guess is that they will wriggle out of this saying this info is freely available in branch)

Main thing to me is ... if they say that there is no written notification or agreement required .. how on earth do you know amount of authorised OD you have been granted, or when the limit is amended to ensure that you don't exceed it ? (unfair relationship test?)

IMHO utter poop ... and I'd take great delight in telling them this...but then thats me ..

P

[Guest]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Hi
Dont know if this helps i was researching this in 07 and eventually recieved this letter from the DTI


Dear Mr Bard
CONSUMER CREDIT ACT 1974 (the Act)
Thank you for your emails of 15 March 2007, concerning overdrafts, and of 22 March 2007, concerning credit card agreements, which have been passed to me to reply. I apologise for the delay in replying.
I should note that unfortunately the Office of Fair Trading (the OFT) cannot comment on or intervene in individual matters. This is because such actions fall beyond the remit of the OFT and because the OFT cannot be aware of all of the relevant information in each instance. Similarly, the OFT cannot comment or express a view on particular practices, save where the OFT has considered a practice in the round and its view is in the public domain. The following points are therefore general in nature.
Overdrafts are normally not subject to those elements of the Act governing form and content of an agreement. This is because the OFT has issued a Determination under Section 74(3) of the Act excluding overdraft agreements from the need to comply. As a result of this there is usually no written agreement that a consumer can request under Section 78 of the Act. However, I should note that any Bank wishing to avail itself of the benefit of the Determination must notify the OFT of its intention to do so and is required to provide information to the prospective debtor. Specifically, the creditor must provide, in writing, at the time the agreement is concluded or before details of the credit limit if any, the annual rate of interest and any charges available, and the process for terminating the agreement. Typically banks make such information readily available via a variety of media on an ongoing basis.


The stinger is in the last sentance
Peter

[dad]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

I thought it might be helpful to set out the determination in full:

Determination under section 74(1)(b)

21 December 1989

[2.2]
1 Under the powers conferred upon me by section 74(3) and (3a) and 183 of the Consumer Credit Act 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1 February 1990 the Determination made by me in respect of section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1 February 1990 section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.
2 This Determination is made subject to the following conditions:
(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;
(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded:
(i) of the credit limit, if any,
(ii) of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,
(iii) of the procedure for terminating the agreement;
and this information shall be confirmed in writing.
(c) that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than three months, the creditor must inform the debtor in writing not later than seven days after the end of that three-month period of the annual rate of interest and charges applicable.
3 In this Determination the terms ‘creditor’ and ‘debtor’ shall have the meanings assigned to them respectively by section 189 of the Consumer Credit Act 1974. The term ‘bank’ includes the Bank of England and banks within the meaning of the Bankers’ Books Evidence Act 1879 as amended.
This revokes a determination made in 1983, and adds conditions 2(b) and (c) which did not appear in the revoked determination. Its effect is to exempt ordinary bank overdrafts on current amounts from all of the CCA 1974, Pt V except the CCA 1974, s 56.

If they do not fully comply with this then CCA 74 Part V applies to the overdraft.

HTH

Dad

[pandora]

Re: CCA and overdraft, Enforcement Notice, DN etc...........

Thanks for posting that up DAD ...

It was my own understanding that they had to send you the letter of facility ... glad I hadn't given duff info ... phew !!!

If NW actually think about what they have said, how do they explain how you are to know what your authorised OD limit is .. or are they saying there wasn't a limit...!!! (ouch that could hurt if you took a trip christmas trip round John Lewis !!! )

Going on Peters post, the OFT states "typically" so not all banks operate ODs to the bear minimum of legislative requirements, as is apparent in the case of NatWest ... operating to minimum requirements doesn't show a particularly good business practice does it .. !! Further to which we know, even if they don't, that they do have to send a letter confirming arrangements - I mean its common sense for goodness sake otherwise screams unfair relationship ... in that they would know all the cards and you wouldn't !!!

They have infered they don't need to send you anything, so nail them down, ask them and make them tell you, how they communicated the requirements of the OFT re interest rates etc, level of auth OD etc, when your OD commenced, and every change since ... see what they squirm back with ...

Don't forget to check all validity of all docs recd - and any DN you have recd, what section of the act was it issued under, did you recieve one at all, is it compliant?

It all adds to cobbling together the best possible defence to any court threats that may rear their ugly head ...

P