Section 98A CCA and incorrect notice

[Piccerella]

Hi all

I am a very recent member of Legal Beagles. I have followed most of the threads regarding the contractual termination of credit agreements with view to the recent developments.

Any advice would be highly appreciated.

I have a c/c agreement with Lloyds as of December 2004. I have never been in areas and up until now I have only 2 late payments registered. I usually maintain minimal payments on the account which is in the range of £6,000.

On 18th October 2011 I received a letter from Lloyds saying that as a responsible lender they are reviewing their lending from time to time. Following a review they have decided not to reissue a new c/c card when my current card expires and my account would be closed in 2 months.

T&C allow the bank to undertake the above course of action and contractually terminate my c/c agreement. The required notice is 2 months. We all know what S98A CCA says about this as well. The only issue here is that my c/c expires end of October 2011. A new one will not be reissued, which confuses me as to where I exactly stand.

S98A (3) (b) provides that :" the termination may not take effect until after the end of the period of two months". Am I right to assume that by not reissuing a new card the termination will take effect as of 1st November from which date I will not longer be able to benefit from the c/c agreement?

I would also make it clear I am not trying to avoid paying the debt. At the same time I am not attracted to the way Lloyds has treated the agreement. There is nothing in their letter explaining post -termination arrangement of the interest. They only state that I will need to make my monthly repayments until it's cleared.

I would highly appreciate your comments in this regard. Thank you

[Piccerella]

Re: Section 98A CCA and incorrect notice

Hi it's me again,

I just wanted to add a thing to my initial thread.

Furthermore, S98A (4) CCA provides that the creditor must must give reasons for the termination or suspension, and the reasons must be objectively justified.

Lloyds wrote to me:

"I do understand that this may come as a surprise so I would like to explain why. We made our decision in line with our commitments to responsible financial lending and the T&C of oyur account. It is something all banks do"

As I see it the bank is in breach of its own T&C by not providing the 2 months notice, in breach of S98A of the CCA as well. Furthermore, they seem not to cARE and at least honour me by providing personalized and objective reasons their decision , a requirement clearly imposed by the Act.

I am now left in a situation that my c\c agreement is effectively terminated in 2 days time and my option is to stay stuck with a loan facility at a c/c charges and interest.

I am not willing to sit and just accept my faith silently. I really rely on the advice that I can get from the people here.

What would you say my next step should be? Accepting unlawful rescission? Which at the very best may put us at the initial stage of the contract and I would still owe the balance but the question is whether the bank would still owe me all the charges and interest paid by me in the last 7 years?

Thank you so much for your help

[labman]

Re: Section 98A CCA and incorrect notice

I would have thought the obvious first step was to contact Lloyds pointing out to them that your current card expires at the end of October, and by refusing to issue a new one they are effectively in breach of the T&C's as they are denying you the two months notice to which you are entitled.

Do you have the current T&C's applying to your credit card, or can you post a link to a set?

[Piccerella]

Re: Section 98A CCA and incorrect notice

Hi labman and thanks for your reply

http://www.lloydstsb.com/media/lloyd...nlin14TsCs.pdf - these are the T&C of my lloyds platinum c/c card

or Lloyds TSB - UK Credit Cards - Platinum Credit Card

Unfortunate, I am not in possession of any T&C simply because I do not tend to keep documents..

I thought I should do exactly as per your advice above + request a copy of the CCA perhaps?

[labman]

Re: Section 98A CCA and incorrect notice

Thank you - I wonder if they will use 18.1 as an 'exceptional circumstance?'

I was just checking you are not at risk of them demanding the full balance back immediately if they felt they could, but I can't see a way they could do this here, although these are only draft T&C's.

I was amused by two parts:

"We may require you to pay the full amount outstanding under this agreement if you die"

and

"Cheques must be returned to us or destroyed immediately if you die."

I wonder how exactly you're supposed to destroy your cheques or return them if you're dead!

In terms of the way forward I'd be inclined to do as I suggested before, but be prepared for them to invoke 18.1.

[Piccerella]

Re: Section 98A CCA and incorrect notice

I will write to them pointing out the discrepancy and will also request that they clarify as to the current position of my account.

And I will also request that they provide me with details as to our future arrangement. The CCA clearly states that contractual termination is not an act to be taken lightly and this is the reason why some mandatory clauses are provided, such as minimum notice and duty to provide objectively justified reasons.

And I entirely agree with your point about destroying /returning cheques once you die!! Absurd...

Thank you I will keep posted for any developments on my case!

[Guest]

Re: Section 98A CCA and incorrect notice

HI
Yes it is galling isn’t it? Fact is that there is sod all you can do about it. Section 98(a) was introduced in Feb this year , so it is still quite a new factor, but even though they need two months to terminate they can withdraw your credit at the drop of a hat. The question is if they can justify doing it. The act says that if they believe you may have problems paying it is enough reason . I suppose you could ask them to justify this belief, but what would you gain. They would just have to give you another card for a week or so and then terminate, and in any case they can just drop your credit limit so you couldn’t draw on it anyway.
Fact is they loaned you the money now they want it back(not all at once though) and they will not lend you any more, same thing happened to me, I was as mad as hell but there is no way around it..
As for rescission, I am afraid this is not rescission. this is simple termination of contract, to rescind the contract you would have to repay the balance. Can’t half rescind a contract and they have already completed their half when they gave you the money.
As for demanding repayment from your estate, yep they can do that too if it says they can in your T and Cs.
Sorry
Peter

[Piccerella]

Re: Section 98A CCA and incorrect notice

Hi Peter

Unfortunately I kind of agree with you but still there are few points I would raise:

1. S98A CCA is relatively new but it took me 10 mins research to find out about it. Not knowing the law or new legislation is never an excuse . I would expect Lloyds to keep up to date with recent changes in the legislation.

2. I am gutted the way they just completely ignored the clause in the Act + their own T&C. What am I suppose to think - that the whole Act is a joke and banks are at liberty not to comply or to comply whenever they feel like? That the same applies for their T&C?

3. I would request issuing a new card even for a day. Any time I make a late payment they claim this cost them £12, so I believe issuing a new c/c would incur at least expenses..No matter how childish I may sound now

4. They could have withdrawn my credit facility and then , in a separate letter, could have given me 2 months notice for contractual termination. It would have been compliance with the law. Not too much to ask I guess. But sending me "thank you goodbye" letter with explanation we can do this as per your T&C + this is something all bank do will not suffice.

5. Most importantly I need clarity as to our future arrangement to the closed account. The CCA is silent about this. Will they freeze the interest? Will they reserve the right to increase the interest rate from time to time as they did so far?My ultimate goal would be freezing the interest. My T&C state that lender can terminate the agreement with 2 months notice and the agreement will keep running until the balance is paid in full. Would you say this is a clause in terms of post - termination interest?

[Guest]

Re: Section 98A CCA and incorrect notice

HI
Points 1-4 I totally agree but as i said realistically there is nothing you can do about it.

Post termination interest is a different matter however, i believe that if they are to charge it then it must be at least mentioned in their t and cs, even if it is i think it is an unfair term (but that is just my opinion) I also believe that they are not allowed to increase it post termination.
I am contesting the interest being charged on an account of mine with MBNA under virtually exactly the same circumstances as we speak.
Peter

[Piccerella]

Re: Section 98A CCA and incorrect notice

Hi Peter

And thank you for your support.

So, they may continue charging interest after they have closed the account, as long as it is allowed by their T&C. Will you comment on the clause in this respect included in the Lloyd's T&C:


"18.1 This agreement can be ended by you under condition 8 and by us giving you two months
notice, or immediate notice in exceptional circumstances. In both cases:
• you must stop making any Transactions, return all Cards and Cheques (cut in half) and
cancel instructions or authorities you have given others to charge your account; and
• the agreement will continue until you have repaid all amounts you owe us including
Transactions, fees and charges added to your account after we received your notice, or
gave you notice."

Will they still have the duty to produce monthly statements in respect of my closed account?

Agh, I am so furious....

[Piccerella]

Re: Section 98A CCA and incorrect notice

Hi all

I just spoke to my bank and this is what I was told:

1. interest and charges re: late payments will still be running following the closure of my account

2. The bank can at any time increase my interest rate after closing my account!

3. They can withdraw my right to use credit at any time and without giving any reasons for this!

I will be sending a letter to them today as I would like to have all this in writing. I cannot imagine they even reserve the right to increase the interest rate on the closed account........