Defaults, S89 and rescission

[Lord_Alcohol]

Re: Defaults, S89 and rescission

Which bank was it?

Barclaycard
------------------------------- merged -------------------------------

ime confused on the 28 day deadline

its 14 days to rectify a default, not 28

I understand that the ICO requires creditors to give a 28 day notice of intent to file the default marker, which is independent of the CCA's 14 days before the creditor takes his next steps.

[miliitant]

Re: Defaults, S89 and rescission

that may be so but as soon as the default served under 87 (1) arrives, and is paid within 14 days, the creditor cannot place the account into default as no default then exsists as all payments will be up to date

missed payment markers can still be recorded but the next payment marker will show as up to date

its all in the default and termination regs

[Lord_Alcohol]

Re: Defaults, S89 and rescission

that may be so but as soon as the default served under 87 (1) arrives, and is paid within 14 days, the creditor cannot place the account into default as no default then exsists as all payments will be up to date

missed payment markers can still be recorded by the next payment marker will show as up to date

its all in the default and termination regs

Yes, that's my understanding too.

I am really trying to focus on S89 and the agreement, rather than DP issues. I'm leaving those to the ICO. I really need to understand what S89 really means where a DN is satisfied and whether rescission can come into play if the OC does nothing once the DN is satisfied within the stipulated timescales.

Any help on that would be very welcome.

[miliitant]

Re: Defaults, S89 and rescission

a creditor can call in a loan anytime they want to by giving notice, egg did that a few years ago, banks with overdrafts is another example but if they terminate the agreement without any form of notice then that will be unlawful recession of contract

have you sent them a complaint as to there complaints procedure

they have to give a final response within 8 weeks and gives you the option to continue with a claim

this realy needs to be done if things start to get messy

[labman]

Re: Defaults, S89 and rescission

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);

s.88 Consumer Credit Act 1974 - Contents and effect of Default Notice

(1) The default notice must be in the prescribed form and specify:
(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;
(c) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.


the breach shall be treated as not having occurred.


I don't see where there is any confusion with the above.

[miliitant]

Re: Defaults, S89 and rescission

the breach shall be treated as not having occurred.


there you have it, in black and white

it is the creditor who is in breach of contract, not you

[Lord_Alcohol]

Re: Defaults, S89 and rescission

Thanks all, but I suspect there's more to this.

Does S89 require that the agreement continue as before, with the debtor having access to credit (in the case of open end agreements) and making contractual payments, and the creditor acting as before? Or is there some subtlety that enables him to stand by his 'termination' - eg, 'we agree that the breach is considered as not having occurred, but your agreement is terminated anyway'?

The question I'm trying to ask is, can S89 be used to demonstrate non-performance of a regulated contract, where the creditor fails to reinstate all facilities as they were before the breach? And if that can be done, is it grounds to claim rescission under S102?

The view from Alcohol Acres is that the creditor does not want the agreement to continue, but as there is now no breach (it has been remedied) there are no grounds to not continue and so perhaps the agreement must be rescinded.

I know, it's a tricky one, and I can find nothing on the interweb that helps.

TIA
LA

[charitynjw]

Re: Defaults, S89 and rescission

My understanding is

Paying the default sum within the time allowed - the 'default' is treated as not having occurred.

The agreement carries on under the terms & conditions (which may have been varied from the original)

These T & C's usually give the creditor a unilateral right to restrict any credit facilities, including the ability to reduce the limit to zero. (They would probably just give some bullc*ap reason for doing this)

[labman]

Re: Defaults, S89 and rescission

If they have a way out, I suspect it would be nothing to do with this. I think it would be to do with a right somewhere stated to close your account without notice or with little notice.

[charitynjw]

Re: Defaults, S89 and rescission

This is the crafty way.

Limit reduced to zero, debtor finds he/she can't use the facility, thinks "sod that, I'm not going to pay for something I can't use", creditor issues DN/TN, debtor is shafted via CCA.

[Lord_Alcohol]

Re: Defaults, S89 and rescission

Hmm, so going back to S89, this doesn't mean that matters are returned to the state before the breach occurred? It seems to mean the opposite, that even if the DN is satisfied the OC will still take action of some sort (which may be his entitlement).

In my case, S89 has not been observed by the creditor - anyone know how 'serious' this is, and whether it can be used to support a claim of 'non-performance' and, ultimately, that the agreement should be rescinded?

I have no notices or documentation at all from the OC - I understand that, to end a CC agreement, he must now serve a notice under the revamped S98A (after the EU directive), and also state a reason for termination (even if the contract says he can end it whenever he wants and without reason). The link is here if anyone is interested;

http://www.legislation.gov.uk/uksi/2...lation/38/made

So even if the OC has ended the agreement or restricted credit to zero, he is still required to notify me - which he hasn't.

Any thoughts, bearing in mind that my objective is to rescind due to non-performance?

Cheers
LA

[labman]

Re: Defaults, S89 and rescission

Do you mind me asking what your ultimate intention is here? Is it purely to prove a point - if so how far are you prepared to go to do this?

If your aim is to be put back in the position you were before, do you not think they would then cancel the CC legitimately?

I suspect I'm not the only one here a bit reluctant to give a definite opinion as we don't want to mislead you if you intend pursuing this to the hilt. If it's a case of purely trying to win a game of letter tennis, that's different.

Either way, I understand you want the default removing, and I see no reason why that battle should not be won.

[charitynjw]

Re: Defaults, S89 and rescission

By virtue of s86D, the creditor cannot enforce the agreement, or charge interest.

(3)The creditor or owner shall not be entitled to enforce the agreement during the period of non-compliance.
(4)The debtor or hirer shall have no liability to pay—
(a)any sum of interest to the extent calculated by reference to the period of non-compliance or to any part of it; or
(b)any default sum which (apart from this paragraph)—
(i)would have become payable during the period of non-compliance; or
(ii)would have become payable after the end of that period in connection with a breach of the agreement which occurs during that period (whether or not the breach continues after the end of that period).

http://www.legislation.gov.uk/ukpga/1974/39/section/86D

The contract (debt) still exists, though.

[basa48]

Re: Defaults, S89 and rescission

Hmm, so going back to S89, this doesn't mean that matters are returned to the state before the breach occurred? It seems to mean the opposite, that even if the DN is satisfied the OC will still take action of some sort (which may be his entitlement).

In my case, S89 has not been observed by the creditor - anyone know how 'serious' this is, and whether it can be used to support a claim of 'non-performance' and, ultimately, that the agreement should be rescinded?

I have no notices or documentation at all from the OC - I understand that, to end a CC agreement, he must now serve a notice under the revamped S98A (after the EU directive), and also state a reason for termination (even if the contract says he can end it whenever he wants and without reason). The link is here if anyone is interested;

http://www.legislation.gov.uk/uksi/2...lation/38/made

So even if the OC has ended the agreement or restricted credit to zero, he is still required to notify me - which he hasn't.

Any thoughts, bearing in mind that my objective is to rescind due to non-performance?

Cheers
LA

Check out 87 (2):

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

[charitynjw]

Re: Defaults, S89 and rescission

As long as

(4) Where a regulated open-end consumer credit agreement, other than an excluded agreement, provides for termination or suspension by the creditor of the debtor’s right to draw on credit—
(a)to terminate or suspend the right to draw on credit the creditor must serve a notice on the debtor before the termination or suspension or, if that is not practicable, immediately afterwards,
(b)the notice must give reasons for the termination or suspension, and
(c)the reasons must be objectively justified.

http://www.legislation.gov.uk/uksi/2...lation/38/made