Court claim issued by HSBC on a faulty DN & TN

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Just piched this from a few websites,


The fact that a default notice is technically non-compliant will not necessarily invalidate the notice if it can be shown the borrower has suffered no prejudice as a result of the non-compliance.



In American Express Services Europe PE Limited v Brandon, Brandon failed to make payments on his credit card. AMEX served a default notice under s87(1) of the Consumer Credit Act 1974 (CCA). It required a minimum payment to be made "within 14 calendar days from the date of this default notice". No payment was made. AMEX ended the agreement and demanded the unpaid balance. Brandon's default also meant that late payment charges of £25 and over limit charges of £25 were applied to his account.
S88(2) CCA provides that a notice given after 1 October 2006 must give the debtor at least 14 days after service to remedy the breach. By s 176 CCA, a default notice is deemed served on a date it would be delivered in the normal course of the post. The notice here was served on 19 June 2007 and demanded that Brandon make payment within 14 calendar days from the date of the default notice. Service would have been deemed after 19 June and Brandon alleged the notice period was therefore too short, did not give the statutory period required, was therefore invalid and AMEX could not rely on it. He also alleged that the charges were penalties and therefore irrecoverable.


The court held that as AMEX did not take any further steps until 11 July 2007, Brandon had not been prejudiced by the technical breach. The default notice was therefore valid.
As to the default charges being penalties, the judge at first instance held that lenders do suffer loss when borrowers fail to make payment on time or go over the agreed limit and that default puts pressure on cash flow and reserves. He held that the charges applied here were a reasonable pre-estimate of loss and therefore recoverable. This was upheld on appeal.



THIS IS THE BIT I LIKE!!!!!!!!!!!


Things to consider
So long as no prejudice to the borrower can be shown, this judgment will be very useful in trying to persuade the courts that technical breaches should be overlooked. As a High Court decision this judgment will bind County Courts, although we understand that leave to appeal is being sought from the Court of Appeal.





Banking update: report and review on recent cases and issues

21.10.10


No prejudice to borrower

The fact that a default notice is technically non-compliant will not necessarily invalidate the notice if it can be shown the borrower has suffered no prejudice as a result of the non-compliance.


In American Express Services Europe PE Limited v Brandon, Brandon failed to make payments on his credit card. AMEX served a default notice under s87(1) of the Consumer Credit Act 1974 (CCA). It required a minimum payment to be made "within 14 calendar days from the date of this default notice". No payment was made. AMEX ended the agreement and demanded the unpaid balance. Brandon's default also meant that late payment charges of £25 and over limit charges of £25 were applied to his account.



S88(2) CCA provides that a notice given after 1 October 2006 must give the debtor at least 14 days after service to remedy the breach. By s 176 CCA, a default notice is deemed served on a date it would be delivered in the normal course of the post. The notice here was served on 19 June 2007 and demanded that Brandon make payment within 14 calendar days from the date of the default notice. Service would have been deemed after 19 June and Brandon alleged the notice period was therefore too short, did not give the statutory period required, was therefore invalid and AMEX could not rely on it. He also alleged that the charges were penalties and therefore irrecoverable.


The court held that as AMEX did not take any further steps until 11 July 2007, Brandon had not been prejudiced by the technical breach. The default notice was therefore valid.
As to the default charges being penalties, the judge at first instance held that lenders do suffer loss when borrowers fail to make payment on time or go over the agreed limit and that default puts pressure on cash flow and reserves. He held that the charges applied here were a reasonable pre-estimate of loss and therefore recoverable. This was upheld on appeal.

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

So what I can make or understand is that if prejudice can be shown and proven then that would be another case.

The judgement does not give full details, still trying to get a copy. I would like to know, why did Brandon fail to make payments? what was his situation leading up to Amex issuing him with a DN?

Did Brandon make any contact or try to an agreement with Amex between being served with the DN and when Amex terminated his agreement?

I am sure we will get the full story one day, soon, but I do not think that this judgment should be based on everyone. Case by case on their own merit I believe is the way the court works, if it does not then I better surrender now.

6 Dec 10 is the appeal date I believe, have to see what happens.

[middenmess]

Re: Court claim issued by HSBC on a faulty DN & TN

As to the default charges being penalties, the judge at first instance held that lenders do suffer loss when borrowers fail to make payment on time or go over the agreed limit and that default puts pressure on cash flow and reserves. He held that the charges applied here were a reasonable pre-estimate of loss and therefore recoverable. This was upheld on appeal.

Read more at: Court claim issued by HSBC on a faulty DN & TN - Page 8 - Legal Beagles Consumer Forum

If default charges for late payment are not penalties but just compensate the lender for

suffering loss when borrowers fail to make payment on time or go over the agreed limit and that default puts pressure on cash flow and reserves


what then is the term to be used when the lender then charges interest on these compensation fees after 28 days?

it should also be remembered that as different rates of interest are applied to individual accounts it could be argued that some people were being penalised more than others as their interest rates were much higher than other peoples but the 'pressure on cash flow and reserves' would be the same for the lender initially whether the rate of interest on an account was 15% or 40%.

IMO the judges reasoning might hold water if all accounts were on the same interest rate but the rate of interest charged is directly proportional to the amount of expected loss meaning that the lender already has his compensation for late payments already built into the agreement by way of higher interest rates for higher risk borrowers.

The judges decision suggests that not only can lenders have their cake and eat it but the borrower has to supply the plate to serve it on and the cake fork with which to eat--it makes it a win,win,win and then some situation for the lender!

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Very well put mm, and I totally agree.

Don't you think that the lenders have all along been having their cake and eating since time began......only problem for them is now that we the average joe's have found mama's secret receipe and found a way of not letting them have too much cake and get as fat as they have.

If the lenders get in trouble they have the government to fall back on, where as if we get in to trouble our homes are taken away unless we take drastic actions, and at such a drastic times many of us get hooked in by sub prime lenders and we all know what they have done.

If you read the UTTCR & UTCR Acts, I for one am made to feel like I can fly as there is so many rights and help available to the consumer, but then again how many thought that if they had a faulty DN and the lender terminated then they were out of the woods.........mmmmmmmmmm....quite a lot I believe.

Like I said earlier whenever we find a way out the woods these institutions, some with the backing of the courts always find a way to block us and keep us in there, and if we look at the Heath, Walker and now the Brandon case then we don't have to guess to much.....oh I forgot the OFT V Banks charges,

I for one had quite a hope the consumer would win, and everyone would get their charges refunded...that just went up in smoke. So I am thinking negative and if something from now on positive happens then I will think of it as a bonus.

We should find a way of putting something in this cake that these lenders keep having and eating so they get indegestion and diareahha for a very long time hehehehe!

Maybe some laxatives?

Tomorrow is the 6th, so one month and counting, so many of us waiting for the judgment and lord knows how Brandon must be feeling, he's probably had more publicity than the X-Factor.

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Back to what I was going to ask about the true copy of my cca agreement. I believe that HSBC have sent me a reconstructed agreement and is not like the one I originally had, as I do not have a copy but maybe find as I found OH's copy today.

Can I ask them again for a copy? If so do I just write an ordinary letter or have to make a CPR request, and I did not receive a letter before action prior to HSBC issuing me with a claim form........which is not a good thing either.

[middenmess]

Re: Court claim issued by HSBC on a faulty DN & TN

Don't you think that the lenders have all along been having their cake and eating since time began......

They have and we have accepted it as being the way of things up until recently when,with the advent of the internet and the fact that we are all more 'street wise' today then we ever have been,we have railed against their omnipotent position which they have abused for ever.

I feel for you and understand your stance on this matter and agree that you have a case of sorts but I have to be honest and say that it's likely to be a complicated defence to put across to a Judge who due to the judge lottery could well be a 'you spent ,you pay,no excuses' type.

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Thanks mm, I am not disputing not paying at all. I have said that from day one and I stand by that stiill today.

What I am saying is how unfair I have been treated and also there is a lot more to my case which I do not want to post up as would like to keep it for my defence.

But thank you for your support, just have to wait and see what happens.

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Could it be looked upon as unfair that HSBC agreed to accept my OH's payment in installments and not mine. I remember once when my OH phoned the HSBC when he received a letter to make an arrangement and the guy on the other end was very rude to him, he said that my OH should get a job in mc donalds and with that pay his debt off , so my OH complained to HSBC in writing, and it only took them a couple of times to agree to a plan,

And like me he was offering more in the beginning and by the time they agreed it was 3 times less than what he was offering in the first place and they took off approx £550 off the balance, now how come I was not allowed? Is that not prejudiced or what?

First DG said no then a week later they agreed

It was easy as 1,2,3,


This was all going around the same time I was writing to them too.

[ed.]

Re: Court claim issued by HSBC on a faulty DN & TN

Apologies Jumper for another ramble, but I'll make it as quick as I can:

PT first off and as is right, as per PM. Apologies no slight was intended. I simply did not correctly finish my train of thought, I jumped off to the next point in my ramble without qualifying that you then followed up your posts with proof, with Judgements and further discussion on them that helps us all - I'm not alone in being grateful for that.

Sorry again if you thought I was attacking you, your comment in the reply:

i was merely trying to get the point across, you cannot come on here and start firing off that you have this golden nugget that will win the day and then not say what it is.

Was my thrust, but you said it far more appropriately than it appears I managed to lol

Lord Mr Alcohol, my friend, my salvation and my vice (hence upsetting people after a few and not explaining myself appropriately lol)

Yeah faulty DN's, S77-79 requests without a signature etc etc etc People who two years ago thought if they didn't receive a signed agreement back (but never kept up with changes or visited forums to see if things have changed) - well I don't like having no alternative but to tell them they really don't want to try and argue in Court. It's not just Brandon, it's McGuffick, it's Carey et al. Ame will giggle because she knows my temper and style of writing (BT letters lol) - maybe I'm due another fortnight holiday?????

I agree wholeheartedly with the rest of your post though, if a debtor believes they only have 14 days to rectify, but doesn't at any point because they think it makes no difference, who the hell is a judge to determine 'they didn't try' anyway. As PT says, being able to prove effort can go far, loan application, seeking a higher credit card limit, even maybe a witness statement asking family etc.

It all goes to effort, but if you have a Judge who thinks 'you didn't regardless' and dismisses a legislatively required 14 days, then it goes towards the belief Judges should be trained and accountable in my mind.

Justice will never be served when the determination is based on 'who tells the best story'. But I'm rambling again!

Jumper, I wouldn't recommend it given what I've read, BUT if you are adamant for your day in Court then you need unfair rels. I wouldn't be a trailblazer here though....let somebody with deeper pockets take that risk. I'm as arrogant as they come, but sometimes you have to concede.

Maybe in your case you are better getting things in hand, then looking at behaviour with the FOS without risk??? You talk about the Judge 'not' finding for you, but there's the Judge who found a debt was enforceable based on a cut up credit card, their's the Rankine's cases where enforcing a credit agreement literally now means only gaining a judgement.

Judges are human. Ergo they are prone to error. Are you prepared to take the risk (and I'm trying to be polite) of finding a Judge who didn't get laid the night before, who cut themselves shaving, who broke a breakfast bowl, and has spent the last 4 hours listening to inane arguments and cases????

Sadly you didn't pay, they are entitled to treat that as a breach, all effort to sort other payments go to possibly unfairness, but bottom line is they acted within the law. So even with my thoughts of unfairness, I can see a Judge saying 'what's unfair, they didn't do anything they weren't entitled to'.

Do you really want that risk?

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Thank you ed for your comments, support and advice. All taken aboard.

OK, if we look at it through the eyes of the lender and according to them I am the 1st party to breach the agreement.

Also it their legal right if they want to accept a lower payment and if not there nothing the borrower can do.

All I am saying is that HSBC are taking me to court because they believe that I have breached the agreement and have not paid.

Although there is a bigger picture behind all this and is not as cut and dry as HSBC have put in their POC.

The judge whether he is related to hitler or not will want to know why I didn't pay.......and my defence will be that it is not that I did not want to pay but that HSBC from day one have been very unreasonable towards me.

The judge will want to know what I mean, then I will explain how I informed HSBC that I would be expecting to be in financial difficulty due to British Gas making an error in sending me my gas & electric bill. I done everything I could to try and balance things but was a bit hard so I found the CCC.S website, I even have a ref number which they gave me.

I was advised as utility bills were a priority debt then I would have to pay them 1st, and I could offer HSBC a token payment of £1 a month. I the wrote to HSBC and offered them more than this and they refused, even after I told them my situation.

Anyways, according to my credit file HSBC closed my account prior to serving me with a DN and showed that I was in 6 months arrears, and the sum they showed which I owed in that month was not the same sum according to that months statement. They then went and disable my account so I could not have access to it.

After being served with the DN I wrote again to make an offer and try and negotiate but I was refused again. In total I have 5 letters refusing my offers.........then during negotiations HSBC go and terminate my agreement and request the full balance.

I then kept receiving letters from them requesting payments and knew that whatever I said or offered they would continue to refuse......so had no choice but to complain to the FOS. HSBC agreed with the FOS that I could pay £1 a month for 6 mths then review, now I would have happily accepted this offer but as HSBC had failed to send me my Data Request I could not agree as I did not know the true sum I owed and could not sign blindly.

After contacting the FOS I wrote to HSBC and accepted their unlawful repudiation of my agreement and informed them of the DN they sent which was faulty, HSBC wrote back and said that it was not and if I was to bring any legal action against them they would vigorously defend it.

Since I received that letter in Jan 10 I heard nothing until Sept 10 from them saying that they were intending legal action and to apply for a CO.

Then last week I received a claim form. I am not disputing paying them neither am I denying that I owe them........but I am afraid and from experience I know that whatever I offer or do they will refuse......so I think it will be better if I did go to court and get this mess sorted out once and for all.

Fair enough I know I will get a CCJ against me, but at least I will know where I bloody stood, I have tried my best to negotiate and I will prove this.........only when all else failed I tried the faulty DN route etc etc.

So you see, the conclusion is that I am was not am not an unreasonable person neither did I have any intention of not paying.....I truly believe that I have been prejudiced against, and I am not going to court to get out of paying or get my debt written off, far from it.

In fact I will say it would be a relief to get this sorted out once and for all. If HSBC had co-operated then we would not have been in this position, but then again this is nothing new to them.

I can use the unfair relationship because HSBC have been very unreasonable to my reasonable requests. OK I get Hitler for a judge the end conclusion will be that I have to pay, and only what I can afford and get a CCJ. Story closed.


Ed, HSBC will say that they acted within the law and that is their right, but I am not disputing the debt and never have, it's just I have found it literally impossible to set up an arrangement to pay them.......and due to their initial refusals I have had to take drastic steps to find out my rights and how I can complain etc etc

If I was defending on the basis that I refused to pay, on the faulty DN, and termination on the back of this then I would seriously not do it............but I am not disputing the debt.........what I am is the way HSBC have treated me, and the faulty DN, termination, recording a Default on my credit file prior to serving me with a DN are just a few things against them.

In the end if the judge turns around and says everything I said does not matter at all, you have breached the agreement and now you must pay x amount each month then so be it I shall. It's not about me having my day in court or getting them back either.

I just want this to end as I have bigger fish to fry. I know I will lose, there is no question about that, but that is not why I will be going........the point of all of this is so that an arrangement can be made so that I can start paying off my debt and I think the judge will not be impressed with HSBC and how they have treated me as I am not a customer disputing paying.

I will just sit there and shine my halo, and if the judge has been to bed with HSBC the night before and says I have to pay, all I will say is thank god, when do I start?

I am not a debt avoider, and my actions and trail of evidence will prove this.............after all this I am sure that the judge will take in at least some of what has happened and sit up and if not then no problem, not much I can do.

THE END!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Forgot to mention prior to getting served with a DN I ran around like a headless chicken trying to find out what I could do to sort this mess out and I contacted the national debt line and the ccs and went to my CAB, all three agencies advised that I could make a token payment of £1 a month............so I will tell the judge that I mis advised and thought that I was doing the right thing.

Now obviously I have found out that I was not.

[Lord_Alcohol]

Re: Court claim issued by HSBC on a faulty DN & TN

Ed.

I agree wholeheartedly with the rest of your post though, if a debtor believes they only have 14 days to rectify, but doesn't at any point because they think it makes no difference, who the hell is a judge to determine 'they didn't try' anyway. As PT says, being able to prove effort can go far, loan application, seeking a higher credit card limit, even maybe a witness statement asking family etc.

It all goes to effort, but if you have a Judge who thinks 'you didn't regardless' and dismisses a legislatively required 14 days, then it goes towards the belief Judges should be trained and accountable in my mind.

I think this goes to the heart of the matter. Jumper did not have 14 days available, and the unalterable fact remains that this is contrary to s88 and the 1983 Regs.

We see that much effort was made at the time and I am finding very little wrong with the basic proposition that, had the prescribed time been given, the outcome may have been very different. My view, for what it's worth, is that it is hard to argue that there was absolutely no possibility of jumper sorting the problem had she been given full entitlement to remedy. It is easier to argue that, as jumper was making considerable effort to remedy, the full timescale may have made all the difference.

The result is that HSBC unilaterally reduced jumper's choices and so influenced the final outcome in their favour. IMO, this is the prejudice that differentiates jumper's case from Brandon.

LA

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Thanks LA for your comments, yes I was making an effort and not ignoring my responsibilities.........but the main thing is that I also seeked advice from three different places, CAB, CCCS and the National Debtline and they advised that I had to pay priority debts first and should make a token payment towards unsecured creditors.

I even have a CCCS ref number to prove that they were advising me, should I ask them to join in at the hearing? So the judge can ask them why they advised me this?

Anyway that is neither here or there is it, I believe that I am being not only prejudiced against but also victimized to a degree and maybe HSBC's intentions are not just to get a CCJ against me but to place a CO on my house, which going by their treatment of me I would not be surprised.

HSBC have contradicted themselves by agreeing to the FOS that they will accept £1 a month for 6 mths and knock off charges for the year 09, so why did they not agree in the first place where I had no charges and a lower sum to pay?

If I did agree to the paying the £1 as the FOS said then I would have signed an agreed to a figure which I had no knowledge of knowing what it could have been. How could I have been certain what the figure was, apart from the DG Sols letters, and as HSBC did not send me my Data Request until Jan 10.

If was just the matter of HSBC not allowing me enough days in the DN to remedy that would be a different story, but they have done much more than this and they are still not stopping.

They have also registered my account as Defaulted and closed prior to sending me a DN, they have marked my credit file that I was in 6 months arrears. All of this information is not true, as they had decided to close my account before issuing me with a DN and giving me a chance to clear myself.

Anyone who is reading this thread should take a lesson of what can happen if you breach your agreement. I should be a prime example of what a creditor/lender can do...............AND WE HAVE NOT EVEN BEEN TO COURT YET, THAT IS WHERE THE REAL FUN WILL BEGIN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!

[Lord_Alcohol]

Re: Court claim issued by HSBC on a faulty DN & TN

Well, there we are. For Peter Bard and others who say that the banks are within their rights to take this sort of action I would say that they make a total mockery of legislation enacted by Parliament.

Here is the ultimate defence; the DN has no effect at all as HSBC has ended the contract without even bothering to read s88, let alone comply with it.

To then issue a DN that purports to be served under s87(1) is an utter travesty.

I think I would be tempted to merely ask the court to dismiss the claim, as having no basis in law whatsoever.

Moreover, I would consider that the bank has removed its entitlement to all sums due through this gross repudiation and disregard of the Act.

If a court found in HSBC's favour, then that is consumer protection under credit agreements dead and buried, with the Act merely an optional extra for select banks that have a better understanding of doing business with the general public.

Just my opinion of course...

LA

[Angry Cat]

Re: Court claim issued by HSBC on a faulty DN & TN

[Quote] by LA:

Well, there we are. For Peter Bard and others who say that the banks are within their rights to take this sort of action I would say that they make a total mockery of legislation enacted by Parliament. [Quote]

Factually, they do NOT always get it right!

e.g. I was defaulted several times whilst having a PPI claim in place.

It was not I who breached the terms of the agreement but, the OC themselves or, rather their PPI provider, who were unable to make the required PPI payments on time:
result, the computer spewed out default notices and then terminated the agreement, twice.

Every case is different...