Defaults, S89 and rescission

[Lord_Alcohol]

Does anyone know what S89 actually means?

89. If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88(1)(b) or (c) the breach shall be treated as not having occurred.

I have a credit card agreement. I experienced problems and a valid DN was served. My affairs improved quickly and I satisfied the DN in full, within the stipulated timescale.

Having paid up I expected something to happen (agreement reinstated or some form of proper termination notice), but nothing. The creditor marked my file with a default and it's still there. I have asked for the agreement to be reinstated and the default to be removed, but there is just silence from the bank. This has been the case for 8 months and I have not been asked to make contractual payments.

If S89 means what I think it means, might it be possible to assume that the creditor wishes the agreement to be rescinded and for me to serve a notice under S102 to that affect? As I have paid more in than taken out, I would be due a bit of money.

Can the rescission be justified by the creditor's non-performance of the contract?

Any comments very welcome.

LA

[miliitant]

Re: Defaults, S89 and rescission

if you have been served with a default notice under 87 (1) of the cca 1974

then if you rectify that default notice by paying all the arrears demanded then it shall be treated as though the default never occurred (14 DAYS)

the account will go back as before the default notice

at this point the agreement is still live so there is no agreement to reinstate as it was never officially defaulted as you rectified the default

if your credit file has been marked with a default then compensation is in order under the DPA

HAVE YOU CHECKED YOUR CREDIT FILE

[berniel]

Re: Defaults, S89 and rescission

Section 89 is contained within Part V11 of the act. The purpose of this section is to postpone the abilty of the creditor to enforce a claim for early repayment of a loan upon breach of the debtor.
Section 89 effectively removes the cause of action by saying that the breach is ineffective due to remedy.
It returns the account to the position before the DN was issued.
It does no more than this. As long as the debtor maintains payment as per the contract, no further cause of action will be created.
All action made by the creditor and debtor prior to this will of course remain unafected.
Bernie

[Lord_Alcohol]

Re: Defaults, S89 and rescission

if you have been served with a default notice under 87 (1) of the cca 1974

then if you rectify that default notice by paying all the arrears demanded then it shall be treated as though the default never occurred (14 DAYS)

the account will go back as before the default notice

at this point the agreement is still live so there is no agreement to reinstate as it was never officially defaulted as you rectified the default

if your credit file has been marked with a default then compensation is in order under the DPA

HAVE YOU CHECKED YOUR CREDIT FILE

Ta, that was my thinking too.

The creditor slapped a default on my credit file before the DN was satisfied (ie, before the date specified in the DN). It is still there and there is no other payment history.

[labman]

Re: Defaults, S89 and rescission

The ICO's take:

Search results

Click the second one down:

37 If a borrower fully meets the terms set out in a notice of intention to file a default, it follows that the lender should not file the default.

Seems to me it should be removed immediately. Have you applied for credit during this time and suffered harm?

[Lord_Alcohol]

Re: Defaults, S89 and rescission

Section 89 is contained within Part V11 of the act. The purpose of this section is to postpone the abilty of the creditor to enforce a claim for early repayment of a loan upon breach of the debtor.
Section 89 effectively removes the cause of action by saying that the breach is ineffective due to remedy.
It returns the account to the position before the DN was issued.
It does no more than this. As long as the debtor maintains payment as per the contract, no further cause of action will be created.
All action made by the creditor and debtor prior to this will of course remain unafected.
Bernie

Cheers Bernie

However, the problem I have is that the creditor has since done nothing. If I were to continue with contractual payments, I would require the creditor to tell me how much is owed each month. I also believed that I should also get a functioning credit card back, as the agreement was for a credit card.

None of these things have happened.

I need to understand what the sanctions are for failure to comply with S89. For instance, does doing nothing amount to effective non-performance and could I revert to S102 and declare the agreement rescinded?

[berniel]

Re: Defaults, S89 and rescission

Cheers Bernie

However, the problem I have is that the creditor has since done nothing. If I were to continue with contractual payments, I would require the creditor to tell me how much is owed each month. I also believed that I should also get a functioning credit card back, as the agreement was for a credit card.

None of these things have happened.

I need to understand what the sanctions are for failure to comply with S89. For instance, does doing nothing amount to effective non-performance and could I revert to S102 and declare the agreement rescinded?

Best of luck with that.
Let us know how you get on

Bernie

[Lord_Alcohol]

Re: Defaults, S89 and rescission

The ICO's take:

Technical Guidance Note - Filing defaults with credit reference agencies

37 If a borrower fully meets the terms set out in a notice of intention to file a default, it follows that the lender should not file the default.

Seems to me it should be removed immediately. Have you applied for credit during this time and suffered harm?

Yes, I am unable to get any financial service as a result (other than basic 'cash card' type accounts). Can't even get a cheque book.

I have complained to the ICO and they are looking into it, but for me the more urgent issue is the agreement itself and not so much the data processing. Really understanding S89 and what creditor's are required to do, if you see what I mean.

[berniel]

Re: Defaults, S89 and rescission

The ICO's take:

Search results

Click the second one down:

37 If a borrower fully meets the terms set out in a notice of intention to file a default, it follows that the lender should not file the default.

Seems to me it should be removed immediately. Have you applied for credit during this time and suffered harm?

The notice to file a default as stipulated by the guidlines is a seperate entity to the DN issued under the act and should give 28 days.

Mostly the notice is included in the DN but it does not have to be.
If it were issued earlier than the section 87 DN they would have a right to enter it on your file.

It must be remembered that notices of default are not dependant on section 87 notices it is a record of payments made on the account.

Bernie

[Lord_Alcohol]

Re: Defaults, S89 and rescission

The notice to file was contained within the DN, in this case. Payment was made two weeks before the advertised deadline to file (the 28-day deadline), but the default was filed several weeks before the notice was sent.

[berniel]

Re: Defaults, S89 and rescission

The notice to file was contained within the DN, in this case. Payment was made two weeks before the advertised deadline to file (the 28-day deadline), but the default was filed several weeks before the notice was sent.

Then complaint should be made to the Data handling section of the firm quoting ICO guidlines also contact the CRA and ask them to put a note on your file, saying that the default is in dispute.

In practice this does very little good as your file will include records of missed/late payments anyway.

I suppose the deletion may add a few points to your score.

Bernie

[Lord_Alcohol]

Re: Defaults, S89 and rescission

Then complaint should be made to the Data handling section of the firm quoting ICO guidlines also contact the CRA and ask them to put a note on your file, saying that the default is in dispute.

In practice this does very little good as your file will include records of missed/late payments anyway.

I suppose the deletion may add a few points to your score.

Bernie

Thanks Bernie. I did send several letters to the creditor about this, all to no avail - hence my complaint to the ICO. I'm leaving it all in their hands as there is nothing I can do at all. The process of making a complaint is quite epic so am hoping it works out.

Just need to understand the S89 issue really - it would be Ok if he sent a bill for the 8 months 'missed' payments as I've put probably all of it aside - but so far I've been unable to get this to happen.

I'm really trying to find out what my options are (if any) where the creditor just refuses to perform the contract. As S89 seems to imply that he should perform the contract, this is my starting point.

The real worry is that the creditor will wake up and record 8 months missed payments on my credit file, and that is a lot worse than a default even if I can pay it. This is why I feel I need to be proactive and do something other than the DP stuff.

[berniel]

Re: Defaults, S89 and rescission

As said all section 89 does is remove the cause of action so the creditor cannot enforce.
Nothing to do with your CRA file i am affraid.

Best of luck anyway.

Bernie

[CleverClogs]

Re: Defaults, S89 and rescission

The notice to file was contained within the DN, in this case. Payment was made two weeks before the advertised deadline to file (the 28-day deadline), but the default was filed several weeks before the notice was sent.

Which bank was it?

[miliitant]

Re: Defaults, S89 and rescission

Which bank was it?

ime confused on the 28 day deadline

its 14 days to rectify a default, not 28