s.89 - what does it mean?

[Lord_Alcohol]

Re: s.89 - what does it mean?

Am not sure if the assignment was bad, but the recent letter from the OC mentioned that as the DN had been sent to an incorrect address in 2008, they were going to 'buy' back the account and remove the CRA entry. I am not sure if removing the CRA entry actually means they DN is withdrawn (is it possible to issue a DN yet not mark a CRA file?).

Jax - just a few rambling thoughts, probably not much help - there is a difference between a DN and a default on your credit file. For example, if your agreement was unregulated, there would be no DN but the creditor could still register a default on your credit file. The connection is confusing because lenders seem to insert the ICO's requirement for 28 days' notice of an intent to file a default within the DN (which normally gives 14 days), which is bound to lead to confusion as the distinction is simply not clear unless both CCA and DPA (and the ICO's interpretation) have been studied.

So, no, a DN cannot be 'withdrawn' as it is merely a notice served according to the regs. If the OC removes the default marker as he says then that is quite a result, but the issue might be that he serves a new DN (although he might not, which is why you need - IMO - to get clarification from him as to his intentions).

I guess I will have to wait and see what comes..but if the DN is indeed withdrawn does this make it a live account ?

Can a terminated agreement become 'unterminated' without the consent of both parties? I don't know. That was why I started this thread!

Also, if they at some point issued a new DN, given the account was defaulted already 4 years ago, does the 6 years start again or run on from the original date...regardless of the fact there may be a period in between where the CRA entry was removed ?

This is why you need to understand the lender's intentions - it could be highly damaging for you if a new agreement is imposed on you.

How does a contractual termination differ to what was done previously...does this mean CCA 1974 does not apply ?

If your ag contains a termination clause (I think most rolling credit contracts do) then the OC can terminate anyway, but must (since Feb 2011) serve a s.98A notice that contains reasons for termination. The OC did in fact (whether entitled to or not) terminate your agreement - whether it can now be reinstated or (importantly) the OC can 'get away' with resinstating it unilaterally due to a defective default termination is something you need to consider.

The refunds I have managed to obtain more than cover the original arrears from back in 2006-2008, so in effect the original DN is satisfied...I don't they the OC or the DCA know the original DN was faulty. I haven't told them.

I think this is probably irrelevant as the arrears that triggered the DN were missed contractual payments, hence the 'default'. The issue is the balance (which includes the original arrears) - I would be surprised if the OC considered that any refunds amount to satisfaction of a DN but suppose it could happen. If it were me I would start talking to the OC, learn his intentions, get the default removed and work out a fair plan to repay what's left of the balance.

HTH
LA

[jax50]

Re: s.89 - what does it mean?

Thanks Lord Alcohol...

I guess I will wait and see what they do, but I expect this will be a demand for payment in some form, and I'm curious as to what form that will be...probably not a DN in the first instance...more a 'you owe x amount...pay now perhaps. I'm a little concerned about what you said about them imposing a new agreement on me...surely an agreement is a signed document between two parties...you cant' just make up an agreement and tell somebody this is what you have to comply with, surely ?

I guess the first thing would have to be an assignment notice to inform me they have bought the account back, maybe that will be the demand for payment letter ? Maybe a who are you ? letter and show me the signed agreement (ie a CCA follow up) will stall them.

There are too many issues with this for me to get my head round, not least the fact that the OC terminated the contract in the 1st instance due to a breach...a breach which has subsequently proven to be incorrect by virtue of the fact that amounts claimed included what has now been conceded as unfair fees and charges. Even, as you say, if the 'amount now due' comprised missed payments, those payments were incorrectly calculated...and after 28 days the full amount demanded was over-stated too.

Coupled with all this, was the defective DN in the first place...

Your point about the refunds not satisfying the missed payments I'm not sure about. If the OC had sent me the refund, instead of merely adjusting the account, I could have paid the off the missed payments..and satisfied the DN.

As it is, the OC has terminated the agreement by selling it on...despite the defective DN and the wrong amounts on it. Some may say they have repudiated the agreement by what they have done...and that I should still have my credit card. I can accept the repudiation, and have paid the amount due (missed payments)...therefor there is nothing left to pay ?

These are rambling thoughts too, and I need to get my head together and get advice.. There is also the issue the OC ignored my CCA requests so in fact the account is unenforceable anyway....I am yet to receive a signed copy of the signed agreement with the prescribed terms....
All I have received from the DCA is a bad copy of an application form with no reference to T&C's....nor any PT's...:santa_cheesy:

My contacts with the OC have been the Complaints Dept, so I'm thinking it will be passed on to someone with legal understanding...so, as i said at the outset, perhaps best wait and see what they send me.

Time for a glass of wine I think....

[Lord_Alcohol]

Re: s.89 - what does it mean?

Jax - it won't be a new agreement, the OC will use the old agreement with the argument that the DN was defective and so couldn't be used to terminate it. This fits with getting the agreement back from the DCA. Presumably the OC has realised that it has sold a credit agreement to an unlicensed firm.

At that point the OC can serve a new DN or a termination notice under s.98A and then sell the debt back to the DCA !!

If your contract has a termination clause in it, you could argue that the assignment of the account to the DCA was an effective termination (as long as pre-Feb 2011 when a notice was required for rolling credit) and, TBH, I can not think of an argument that counters this as long as the wording of your T&Cs assists. Being able to successfully argue this would prevent reassignment back to the OC, re-imposition of contractual interest and the re-recording of data on your credit file.

If your DCA does not have a credit licence I don't see how the agreement can be reassigned anyway, as it would have come to an end on assignment by the OC. It is worth checking this. If the DCA is unlicensed then only the balance (the debt) can be assigned back to the OC as the DCA would not be entitled to assign 'rights and duties' (ie, the assignment would be equitable and not absolute). This should be a block on service of a new DN and the re-recording of new data on your credit file.

Btw, your s.78 request only makes the agreement unenforcable while the OC is in breach of that provision. Once he's found a compliant copy it becomes enforcable.

The "accepting repudiation" argument (IMO) is futile. The risk, it seems to me, is that by accepting unlawful repudiation you are exercising your right to cancel the agreement, at which point credit facitilies are withdrawn but the balance, and contractual interest, remain payable as per the T&Cs of your agreement. I would think it best not to accept anything, and just notify the lender that he is in breach of contract and that you view the matter as closed, leaving the solution up to the lender if he can think of one.

LA

[jax50]

Re: s.89 - what does it mean?

Thanks LA... The DCA is a licensed agency..not sure if that changes things. I tend to think the OC do not know the DN was defective...and maybe they will leave that in place despite removing the BRA entry ? I don't think there is any obligation on an OC to always mark a CRA file when they issued a DN is there ?

I don't know if the contract has a termination clause because I've never had any T&C's either, but I expect it has. The assignment to the DCA was an absolute one, I was told.

I understand what you say about the s78 request, the DCA have failed to provide an agreement in the 6 weeks they have been looking for it. Maybe to OC will find one...but the OC were sent s78 along with the DCA as at that time I didn't know what type of assignment it was...the OC never replied despite 3 recorded delivery CCA 1974 requests.As far as I am concerned, the OC have ignored these so until they comply it remains unenforeceable..

I don't fully understand the repudiation issue, I guess the thinking goes the OC issues a valid DN, the arrears are paid via the refund, thus the DN is satisfied...hence the OC needs to reinstate the agreement to what it was..ie re-issue credit card. If it fails to do this after say 14 days, then they have terminated or repudiated...or denied me the rights under the contract. At this point would I say okay, you've terminated without reason...without notice...after the DN was satisfied....you have failed to keep your part of the contract ? It would be the OC who have cancelled, not me, wouldn't it ?

How this pans out I don't know...I think your advice about leaving it to the OC to sort is sound, leave it to them.... Teaboy had a few comments on this (earlier in this thread) regarding the process.

When I receive something from the OC I'll post it up here, and maybe take it from there...

Thank you for your input, much appreciated

[patrol30]

Re: s.89 - what does it mean?

Sorry to bring up an old post but has any advance been made with the tactic of paying the default after it has been sold and the demanding that the original agreement be put back in place. I have heard nothing in months but the letters have started again so was thinking of trying it with one of the smaller debts i have.

[Lord_Alcohol]

Re: s.89 - what does it mean?

Sorry to bring up an old post but has any advance been made with the tactic of paying the default after it has been sold and the demanding that the original agreement be put back in place. I have heard nothing in months but the letters have started again so was thinking of trying it with one of the smaller debts i have.

Well, I've spent months going over this and am in fact about to serve papers for just this issue.

Here's what I think - and pls bear in mind it could be total rubbish...

1. An OC serves a duff DN under an agreement with no contractual termination clause (most probably not a credit card agreement). The DN is not satisfied and the OC terminates the agreement. The current thinking (eg, judge's remarks in Harrison) is that the agreement should be reinstated in order for a new DN to be served.

Bear in mind that the EU directive may apply so look at s.98A - the dates on which your agreement started have an impact - although a contractual termination clause is still required.

If the DN is satisfied then presumably s.89 should then be observed...but if the OC has removed goods then there is a problem, but not for the debtor

2. An OC serves a duff DN on an agreement with a contractual termination clause. This is more complex, because either party could argue that the agreement was contractually terminated. Again, a judge commented on this (in Brandon), seeing no reason why (in this case AMEX) could not pursue a contractual termination despite the duff DN (but not on those proceedings, which were brought via the DN).

I think in these cases it might be pointless arguing for reinstatement, unless the OC has already served a new DN, because it can always argue that it had a right to end the agreement. Again, s.98A comes into play where the contract allows. But, if the OC has recorded a default on your credit file, he must remove it because the termination would be contractual - a default suggests that it was due to..er...default.

3. A default recorded via a DN that specifies the wrong amount (ie, a higher amount) and which carries a notice of intent to file a default should be removed, because it would contravene DPA s.4(4). That is, principles 1 and 4 are breached. That can open up a claim for compensation via DPA s.13 but it is currently necessary to prove damage/loss. However, it is probably enough to have the default removed from your credit file.

4. The meaning of s.89 is still not understood, as no-one has expressed a view and, instead, this thread is used for other purposes So I have no idea what should happen if a new corrected DN is served following a duff DN and is then satisfied, and have been unable to find any case history (which is odd, as ss.87 and 88 - and others - are well-covered).

5. Whether the agreement is reinstated prior to service of a new DN is moot, but I would say it would have to be otherwise none of s.88 make any sense (look at the wording of the enforcement notice regs). If a default remains on your credit file when a new DN is served, then the OC cannot be correct because your credit file should only (to observe DPA s.4(4) and prinicple 4) show missed payments to the date of the default thereafter nothing. It cannot show missed payments since then because you won't have been asked to have made ex-contract monthly payments - the OC would be in breach of contract for failing to send monthly statements!!

Lastly, I think you need to study your contract because that is key. If there is a termination clause it can affect the outcome, especially if the wording of the clause allows for termination even if the default termination was cocked up.

Really lastly, I would say that most creditors have been falling over themselves trying to default their customers so that they can help the UK government reduce household indebtedness, with the help of the credit reference agencies, and that it is really not difficult to get a DN correct where there is a will. I believe that this is the reason why creditors refer you to the FOS rather than try to sort the matter out; they can then provide the FOS with a pack of lies while referring the debt to their agents and, ultimately, court - although many cave in and enter into a long-term crippling payment arrangement.

The whole thing stinks.

LA

[gravytrain]

Re: s.89 - what does it mean?

Sorry to bring up an old post but has any advance been made with the tactic of paying the default after it has been sold and the demanding that the original agreement be put back in place. I have heard nothing in months but the letters have started again so was thinking of trying it with one of the smaller debts i have.

Debtors have no legal right to insist a creditor re-instates an account that has been suspended or terminated, so the point is moot.

[Lord_Alcohol]

Re: s.89 - what does it mean?

Debtors have no legal right to insist a creditor re-instates an account that has been suspended or terminated, so the point is moot.

The lender may have had no legal right to suspend or terminate the agreement, which is not moot (I think)

[gravytrain]

Re: s.89 - what does it mean?

The lender may have had no legal right to suspend or terminate the agreement, which is not moot (I think)

The question of section 89 reinstating the right to draw down credit is because with or without it, the creditor does not have to. The point is moot.

[Lord_Alcohol]

Re: s.89 - what does it mean?

The question of section 89 reinstating the right to draw down credit is because with or without it, the creditor does not have to. The point is moot.

A creditor must observe the regs, that is not moot. A creditor cannot end an agreement unless it has entitlement and has served a proper notice (where required). A creditor cannot end the agreement for reasons of default unless a DN complying with s.88 has been served first, or if the contract allows for termination notwithstanding a defective DN.

The reinstatement of the agreement is a natural side-effect of requiring a creditor to observe the regulations and/or contract, in cases where it has not.

If the contract allows, the creditor can always then suspend or terminate the agreement once the regs are observed. That is definately not moot.

In any case, I see no reason why a rolling credit agreement could not be reinstated but suspended at the same time - unless the contract says otherwise.

[gravytrain]

Re: s.89 - what does it mean?

A creditor must observe the regs, that is not moot. A creditor cannot end an agreement unless it has entitlement and has served a proper notice (where required). A creditor cannot end the agreement for reasons of default unless a DN complying with s.88 has been served first, or if the contract allows for termination notwithstanding a defective DN.

The reinstatement of the agreement is a natural side-effect of requiring a creditor to observe the regulations and/or contract, in cases where it has not.

If the contract allows, the creditor can always then suspend or terminate the agreement once the regs are observed. That is definately not moot.

In any case, I see no reason why a rolling credit agreement could not be reinstated but suspended at the same time - unless the contract says otherwise.

Nonsense, a creditor is not going to be compelled to reinstate credit.

[Lord_Alcohol]

Re: s.89 - what does it mean?

Nonsense, a creditor is not going to be compelled to reinstate credit.

Observing the regs - nonsense? Hmmm...

As I have said, the creditor does not need to reinstate credit. An agreement can be reinstated without providing the debtor with further funds.

[patrol30]

Re: s.89 - what does it mean?

Thanks for the advice guys, i think my next step is to ask for a copy of my original agreement and look at their termination rights, if it helps this is for a loan. Will keep you posted as to how this goes, in this case i have nothing to lose so will push this and see where it goes. I will of course keep you informed of any changes as they occur.

[patrol30]

Re: s.89 - what does it mean?

Ok thinking about this, here is my take on the above points.

We are all in agreement that the contract has to be terminated either contractually or by Default. The lender in this case has decided to terminate using a defective Default notice and has sold the debt on. Now as far as im concerned the bank has wiped it off their books and the last thing they want is it put back on again, i think this is the key point here, does the bank really care that much after it has offloaded the debt.

Now my understanding is the agreement must be reinstated by the bank and they then issue another Default notice or they contractually terminate it. If they contractually terminate it then the default must be removed and no further records can be put on my credit file so it will drop of in 6 years. If they contractually terminate i am not sure if that changes the powers they have to collect the debt?

But either way i'm betting the bank won't touch this mess with a barge pole and leave the bottom feeders to sort this out and they cannot proceed to court without a correct termination.

[patrol30]

Re: s.89 - what does it mean?

Sorry one more question i forgot to ask. If they terminate contractually surely they would have to produce a signed copy of the agreement rather than a generic one as the devil is in the detail of the contract.