UE pre 2007 v post 2007

[jon1965]

I am really confused about UE. I believe that agreements dated post 2007 are generally always enforceable but I do not understand why pre 2007 can be UE.
From reading all the threads, including careyvhsbc it seems that they can make it all up, i.e. lift a copy of your signature etc. and the T&C's do not need to be even in the same document.
Yet on another thread it talks about the T&C's need to be in the same 4 corners..sorry but what the hell does that mean. Is there anywhere that it is all set out in fairly simple noddy language. I am getting different advice from lots of people, one being an employee of a large paid for Debt management company and others are from different consumer type boards.
I have no wish to upset anyone by asking again, to be honest I just want to understand. There is someone who I trust but he has far too much to do to explain to me in the type of noddy language that I need.
I have sent out many cca requests and so far only one has replied and I am told it is UE because it includes a 100 set up fee which wasn't included in the total amount of credit and just added on(well I think that was the reason)

Any simple explanations would be very much appreciated

[charitynjw]

Re: UE pre 2007 v post 2007

Hi jon1965, & welcome.

It's a big subject!

I'll try to start the ball rolling.

Regulated agreements

The prescibed terms
Courtesy of http://www.legal-zone.co.uk/credit-agreement-void )

Section 61 of the Consumer Credit Act 1974 stipulates that a credit agreement is not properly executed unless it contains all the prescribed terms and conforms to regulations made under section 60(1) of the Act, and is signed in the prescribed manner. Therefore the consequence of a failure or omission to state fully and correctly any of the prescribed terms is to render the agreement improperly executed and therefore unenforceable save by order of the court. However were an application to be made to the court 127(3) requires the court to dismiss the application for an enforcement order. Therefore such an agreement may be considered to be irredeemably unenforceable.
The prescribed terms for the purposes of section 61 which are set out in Schedule 6 of the Consumer Credit Act (Agreements) Regulations 1983 states that:
(1)A regulated agreement is not properly executed unless—
(a) a document in the prescribed form, itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and
(b) the document embodies all the terms of the agreement, other than implied terms, and
(c) The document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible
In addition the following must be contained: -
a) A term stating the credit limit or the manner in which it will be determined or that there is no credit limit,
b) A term stating the rate of any interest on the credit to be provided under the agreement and
c) A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following—
1. Number of repayments;
2. Amount of repayments;
3. Frequency and timing of repayments;
4. Dates of repayments;
5. The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable.
Therefore if a borrower has not signed the agreement containing all the prescribed terms, the agreement will not be enforceable without an order of the court and section 127(3) requires the court to dismiss the application for an enforcement order.


This unenforceable clause was entirely repealed via the Consumer Credit Act 2006 (this part coming into force 6th April 2007)

[basa48]

Re: UE pre 2007 v post 2007

I am really confused about UE. I believe that agreements dated post 2007 are generally always enforceable but I do not understand why pre 2007 can be UE.

Pre / post 2007 is an approximation really. Creditors issuing credit / loans pre 2007 tended to be very lax regarding accurate and legally compliant paperwork and keeping it properly. This appears to have been mostly corrected post 2007. I'm not really sure why.

From reading all the threads, including careyvhsbc it seems that they can make it all up, i.e. lift a copy of your signature etc. and the T&C's do not need to be even in the same document.
Yet on another thread it talks about the T&C's need to be in the same 4 corners..sorry but what the hell does that mean. Is there anywhere that it is all set out in fairly simple noddy language. I am getting different advice from lots of people, one being an employee of a large paid for Debt management company and others are from different consumer type boards.

Yes creditors can 'make up' agreements. This is known as 'reconstituted'. But they must be accurate and critically are only acceptable for information purposes in reply to a Section 78 request. However, and even more critically they can be seriously challenged if presented as proof of an enforceable agreement and IMO do not satisfy the criteria for Section 61.

The '4 corners rule' simply means that your signature must be on the same document as the 'prescribed terms'. I can be on the front or back of one sheet of paper or on a separate page IF there is a clear and identifiable link from the signature page to the 'prescribed terms' page.

Some creditors have been known to copy genuine signatures off correspondence and 'paste' it into compliant documentation thus creating an enforceable agreement. This of course is fraud, but proving it is another matter!

I have no wish to upset anyone by asking again, to be honest I just want to understand. There is someone who I trust but he has far too much to do to explain to me in the type of noddy language that I need.
I have sent out many cca requests and so far only one has replied and I am told it is UE because it includes a 100 set up fee which wasn't included in the total amount of credit and just added on(well I think that was the reason)

Any simple explanations would be very much appreciated

Hope this helps and don't forget we all started out on this road knowing very little. It is only by asking that you get answers.

As an edit to the above, I prepared some notes regarding Carey a little while ago to show that according to HHJ Waksman, 'reconstituted' agreements do not satisfy s61 (it's a bit long, but I think it is worth reading carefully):

Using ‘reconstituted’ agreements for s61

1. HHJ Waksman in the High Court clarified the purpose of documentary evidence pursuant to s78 with reference to so called ‘reconstituted’ copies of agreements in Carey v HSBC (supra) where he said:

[1]. This judgment deals with two matters concerning requests for copies of credit card agreements pursuant to section 78 of the Consumer Credit Act 1974 (“the Act”) and the consequences of non-compliance with that provision.

[2]. The purpose of this judgment is to give general guidance, in the context of the cases before me, in the hope that this will narrow or eliminate the issues arising in the hundreds of other similar claims issued in County Courts around the country, many of which have been stayed pending the outcome here.

[43]. The issue here is this:

(1) When providing a copy of an executed agreement in response to a request under s78(1) of the Consumer Credit Act 1974:

(a) Must a creditor
(i) provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or complete copy thereof, or
(ii) can a creditor provide a document which is a reconstitution of the original agreement which may be from sources other than the actual signed agreement itself?
(b) Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made in order to comply with s78?

2. Judge Waksman then defines the different ‘purposes’ in relation to copy documents supplied under s78, that is: ‘the Current Information Purpose’ as distinct from ‘the Proof Purpose’.

[44]. It is common ground that the purpose of s78 is (at least) to provide the debtor with information as to the terms of the agreement with the creditor, as well as a present statement of his account and future obligations insofar as they are known. Beyond that common ground, however, the parties have adopted very different positions. The Claimants (debtors) say that the information is both as to the present and the original position under the agreement, and the reason for having the information about the original agreement is so that the debtor may be satisfied that he did indeed enter the agreement by signing a document which was a properly executed agreement (“the Proof Purpose”). On the other hand, the Defendants (creditors) say that it is a question only of providing current information, that is, information about the current terms of the agreement along with current financial details (“the Current Information Purpose”).

3. He then confirms he considers the s78 document as “the Current Information Purpose” but not “the Proof Purpose” by saying:

[53] (3) Once it is accepted that provision of a photocopy to the debtor is not required and that the signature may be omitted, it is not clear why the purpose is not simply information as to what the agreement contained as opposed to proof of its making;

(8) Moreover, the Proof Purpose contention requires that the creditor retain not only the front of the application form – where the signature would be – but also the reverse, assuming that not all the terms were on the front and the reverse was not simply blank. It would not be enough for the creditor to produce a copy of what it said were the prevailing terms at the time for that card. Mr Uff said that this additional burden might be avoided if the front of the form had some sort of code on it, perhaps at the bottom, to indicate the precise set of terms which would apply and which could in turn be ascertained by reference to that code. But absent that both sides would be needed;

(9) (narrative omitted for clarity) ….. In Light the original executed agreement had been lost. So the bank could not provide the source for the copy as the Proof Purpose required…. (narrative omitted for clarity)…..But if that were right it undermines the Proof Purpose advanced which depends on the creditor at least seeing for itself the executed agreement at the time of the request for the copy.

(11). It is said that if the debtor cannot have a copy in the sense required (for the most part) by Mr Uff and Mrs Thompson then he is at a disadvantage should he wish to challenge whether he made a properly executed agreement at all. I do not agree. First, this point only has real force if the Proof Purpose underlays s78 and I do not think that it does. Second, it assumes that there is no obligation on the debtor to make out at least some sort of positive case as to improper (or non-) execution of the original agreement. If he does and for example asserts positively that although he has been using a credit card agreement for years he never actually signed an agreement, or one that complied with s61, the creditor may well have to try and find the original in order to deal with that allegation. (I deal further with the absence of such positive allegations in relation to s61 when I consider below the Applications.) But that tells one nothing about the scope of s78;

(13) I have already adverted to the overarching purpose of the Act being consumer protection within the ambit of a new and consistent framework which has benefits for lenders, too. But that does not impel a conclusion that the purpose of s78 must be the Proof Purpose.

(14) Mrs Thompson submitted that the approach she advocated with Mr Uff was not merely dependent on the Proof Purpose but also followed from the language of s78. But I do not accept that the language here impels that result and all the factors already mentioned point away from it.

[54]. Accordingly, the copy need not be as contended for by Mr Uff and Mrs Thompson and instead, a creditor can satisfy its duty under s78 by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.

[62]. Mr Uff in particular contended that this was not s78 compliant because the name and the address did not come from the executed agreement. He said that the copy had to be of that document which on its face tied itself to the debtor. Only in that way could the debtor be assured that agreement was indeed to be attributed to him because the name and address on it was reproduced directly on to the copy. But this argument depends on the correctness of the Proof Purpose being the driver behind s78 and the Copies Regulations, which I have rejected. On the other hand, it is not as if the provision by the creditor of the name and address from its records is not of some value to the debtor. It at least indicates that the creditor has a record of the fact of this person at an identified address making an agreement at some point in the past.

[63]. The question is “Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made?” and the answer to be given is “No”.

[105]. I see no difficulty in saying that the framers of the Act saw it as important in the interests of debtors that they should able to obtain a copy of the agreement they made for whatever purpose they want, it being assumed that they ask for a copy because they have mislaid their own, and then, if in fact the agreement has been varied, they are given the up to date terms as well. This is what Options A and B are designed to do, more or less elegantly. The fact that the purpose of s78 falls short of the supply of proof or the best evidence possible of the executed agreement does not undermine this.

[132]. A further element of the dilemma prayed in aid by Mr Gun Cuninghame is that without a s78 copy the debtor will also not know whether the agreement is irredeemably unenforceable under s127(3) which it might be. But that is entirely speculative and the point is undermined by (a) the fact that it is not the purpose of s78 to provide proof of a properly executed agreement,

[199]. ………(narrative omitted for clarity)……. I have already held that the purpose of the s78 copy is not to provide proof. ……..(narrative omitted for clarity)…..

4. It is clear that Judge Waksman concluded that ‘reconstituted documents’, whilst they may be acceptable in response to s78 requests for ‘Current Information’ purposes only, they cannot be considered ‘Proof Purpose’ of an executed agreement, i.e. ‘reconstituted’ agreements are not for the purpose of providing proof of compliance with s61.

5. Judge Waksman then describes what documents he determined do constitute an executed agreement for the purposes of s61 with reference to ‘Assumed Facts’:

[171]. This arises solely in connection with s61(1)(a) and the requirement thereunder that the document signed by the debtor “contains” all the Prescribed Terms. The question is as follows:
“Does the document signed by the debtor contain the Prescribed Terms for the purposes of section 61 and/or section 127(3) if:

(a) they are on a sheet which is referred to on the piece of paper that was signed by the debtor; or
(b) where that sheet is attached to the piece of paper signed by the debtor; or
(c) where that sheet is separate from but was supplied with the piece of paper signed by the debtor?”

[173]. The parties in Carey have helpfully agreed the following principles. The fourth one was added by Mr Uff, with their agreement. No other party takes issue with them. The OFT has formulated the matter in a slightly different way but accepts these principles are close to its position.

(a) It is not sufficient for the piece of paper signed by the debtor merely to cross-refer to the Prescribed Terms without a copy of those terms being supplied to the debtor at the point of signature;
(b) A document need not be a single piece of paper;
(c) Whether several pieces of paper constitute one document is a question of substance not form. In particular a physical connection between several pieces of paper is not necessary in order for them to constitute one document;
(d) Additionally, a physical connection (or one or more physical connections) between several pieces of paper does not necessarily constitute them as one document;
(e) Accordingly, where the debtor’s signature and the Prescribed Terms appear on separate pieces of paper, the questions of whether those pieces of paper together constitute one document is a question of substance and not form.


[174]. As a matter of law, those principles appear to me to be correct, in the context of s61.



Judge Waksman then identifies the documents supplied as The Assumed Facts.

[177]. According to HSBC, p197 is a reconstituted application form. I referred to it above in the context of Issues 1 and 2. The assumed facts here are as follows:

(1) Ms Carey signed a form which contained, among other things, the entries at p197 including the specific reference to being bound by “the terms and conditions attached”; that form did not itself have the Prescribed Terms stated on the front or the reverse;

(2) The form (referred to as “a signature page” in the WS from Alan Burden dated 3 December 2009) would have been produced with Ms Carey’s details already on, for her to sign once her application, already made, had been approved;

(3) At the same time as the form was produced electronically, the relevant terms and conditions (including the Prescribed Terms and information) would have been printed off and physically attached to the form by a staple;

(4) Ms Carey would then have been invited to read the agreement, consisting of the signature page and attached terms and would then have signed and dated the signature page. It would then have been countersigned by the bank;

(5) The relevant terms and conditions would not have been precisely in the form of pages 198-201 simply because that is a s63 copy with the different cancellation clause. But they would have been the full terms with the Prescribed Terms included either in landscape form (as shown at pp198-201) or portrait form.

6. As can be seen from the above narration, the document supplied as the reconstituted application form did not have the prescribed terms on the front or reverse.

7. A further document ‘a signature page’ forming the agreement was then produced with Ms Carey’s details already on, for her to sign and this form was in addition to an ‘application, already made’.

8. Neither of these situations is present in this case in that the application form refers to ‘general conditions’ supplied separately and no other document other than the application form was supplied to the defendant for signing.

9. Subsequently no other document was signed by the defendant nor has one been produced by the claimant as an executed agreement.

10. These observations as to ‘substance and not form’ as contended for by Judge Waksman are that the signature page and its terms and conditions do not have to take the ‘form’ of one piece of paper (the so called ‘four corners rule’), but that in ‘substance’ should be one homogenous document. I would refine that further by observing that a document that is signed as an agreement that refers to terms on the ‘reverse’ or ‘attached’ or display contiguous page numbering or in any way implying the terms were unarguably present at the point of signature would be regarded as one document containing those terms. On the other hand, a signed document that states the terms were ‘supplied separately’ or contains phrases such as ‘I have received…’ and ‘I have read …’ would suggest the terms were in another document separate from and not contained within the signed document at the time of signing.


11. Also Reg. 7 of Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 makes further provision in respect of copies where the agreement has been varied under the heading “Copies of agreements or security instruments where the agreement or security instrument has been varied”“

Where an agreement has been varied in accordance with section 82(1) of the Act, every copy of the executed agreement given to a debtor, hirer or surety under any provision of the Act other than section 85(1) shall include either—

(i). an easily legible copy of the latest notice of variation given in accordance with section 82(1) of the Act relating to each discrete term of the agreement which has been varied; or

(ii). an easily legible statement of the terms of the agreement as varied in accordance with section 82(1) of the Act”.


12. Judge Waksman discusses this as Issue 2:

[69]. “If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?”

and after lengthy argument, he concludes:

[108]. Accordingly, I conclude that Reg. 7 requires a copy of the executed agreement in its original form as well as a statement of the terms as they are at the time of the request.

Thus I argue that courts should adopt the same reasoning as Judge Waksman in his High Court ruling in determining this issue, that is that documents supplied as proof of an executed agreement must be copies of the original documents in their original form as signed by the debtor, irrespective of whether or not it finds that the creditor has supplied reconstituted or copy documents it may claim were supplied at the time of signing.