Incredible though it may seem

[SeeThumb]

Hi,

I am still perplexed about the situation I find myself in. It must seem quite incredible to an outsider, but I assure you that the situation described below is genuine.

I have a fixed term loan which is exactly half way through. I have made every payment as stipulated by the agreement, on time, no delay.

With regard to this issue, I have received only a default notice (s87.1) from my creditor, dated 8 Sept, which informed me of a sum I had 'defaulted' (which in no way related to the payments I make) and that I had until 29 Sept to make the payment or, etc. etc.. It was properly formed, but was, as far as I can tell, plucked completely out of the air. I contacted the lender (c16 Sept) to inform them of their error, but received no response. I do not see this as being in anyway significant other than that it is a symptom of far greater errors made by the lender.

The next letter I received (dated 24 Sept) was from a collections agency stating that they acted on behalf of my lender and requesting that I pay the outstanding amount of my loan. I, as a layman, took this to mean that my agreement had been terminated.

Knowing that all payments by myself had been made, and believing (without any doubt) the claim of default to be completely erroneous, I declared to the lender by special delivery letter (received by them 1 Oct) that they were acting incorrectly, and that I considered the agreement no longer to exist, and that I would make no further payments with regard to it. At the time, I thought this would lead to negotiating a more favourable agreement for the remaining debt, facilitated by their erroneous actions.

The only other letter I have received about this is a second collection notice from the DCA stating that my full payment is overdue.

To clarify, I have had no s86b notice of sums in arrears, I have had no s86e notice of default sums, I had received no termination letter, or s82a notice of assignment to the DCA. Also, they have not responded to me in the near month and a half since I first communicated with them - I have sent several further communications.

I should also point out that I received no s76 termination notice, required if the termination is not for default.

This seems about as clear cut a fundamental breach as can be, yet I gather from this and other forums that it cannot be considered to be so as it is a fixed term credit agreement. I can find nothing in CCA 1974 to support that, and am worried that I have missed something important that means that the lender is not susceptible to any kind of sanction, despite costs resulting, damages (under DPA98) and distress caused.

Is s140 the only recourse? I find it difficult to accept that the OC can roll back to the agreement unilaterally when I have accepted the termination.

[miliitant]

Re: Incredible though it may seem

the problem you have was that the collection agency acting on behalf of the lender and did not own the debt

a lot of collection agencies work in house with the creditor

who was the collection agency???

if they have defaulted the account for no reason, let alone terminated without just cause, and the default has been recorded with the credit agencies, you are looking at a big payday and for unlawful recession of contract as well

[SeeThumb]

Re: Incredible though it may seem

Hi Milii,

Equifax and Callcredit are currently showing me as late for August and September, I have checked my current account and both payments have been made for those months. Also, as I say, the only letter I have received from the OC is the DN, and it was not for any amount I recognised (approx 3/4 my normal payment).

I am reluctant to name the agency only because this may go to court. They are not registered as a trading name of the OC, but it does state that they are acting on behalf of a client, so the assignment may not be an issue for them.

[miliitant]

Re: Incredible though it may seem

what you should have done is keep up the contracted repayments and put in a complaint as to their complaints procedure. they would then have 56 days to respond. if you have not done this, do it now for a paper trail. the courts would expect this to mitigate any loss

[Bill-K]

Re: Incredible though it may seem

I thoroughly agree with Mil. If you can - keep up the good record you have so far, if it looks like it may go to court. Brownie Points....

[SeeThumb]

Re: Incredible though it may seem

Hi Milii,

I did read about rescission after some research, and am concerned that, having told the OC that I consider the agreement to no longer exist, making further payment would negate any claim that I accepted of the termination - I think it is probably too late for his now. I have, though, sent various complaints about their actions, all dated and special delivery.

My strongest argument to support termination is that the second letter from the agency stated that repayment of the full amount was overdue - and therefore denying me any right to make further 'regular' payments. Therefore they have given me reasonable grounds to consider the agreement terminated.

Now, that said, there is a lot of talk that the nature of the agreement, being a fixed term credit agreement, weakens my case for rescission, and I cannot see where. This concerns me as I don't know if I have missed something important.

[teaboy2]

Re: Incredible though it may seem

For the record its unlawful repudiation not rescission, as rescission would rescind the agreement putting both debtor and creditor in position they were in prior to contract (i.e. paying debt back in full) where as repudiation is the creditors refusal to honor the agreement meaning they are entitled to the arrears only and not the full outstanding balance that was yet to be paid over the remainder of they contract had they not repudiated.

DO NOT under any circumstances accept rescission, you can say you deem the contract terminated by all means, but don't say you accept rescission. You can accept their repudiation.

So sent a letter stating that you deemed their termination an act of repudiation of contract on their part - Give details as to all payments you made explaining why you are not in default of the agreement and that by unlawfully defaulting you when you were not in arrears and did not miss any payments was an act of repudiation of contract by them, and as such you accept their repudiation. As you accept their repudiation make it clear that repudiation is not rescission and therefore the contract is not rescinded, nor would you accept or agree to any rescission of contract. Then make it clear that as the contact is now repudiated, they are only entitled to claim arrears owed and are not entitled to claim sum not yet due, but as you never missed any repayments they are therefore no arrears. As such they are not entitled to claim any money from you connected to this repudiated agreement as a result of their repudiation of the contract.

[SeeThumb]

Re: Incredible though it may seem

Thanks Teaboy, but bad news...

Unfortunately it is too late for that, as I have informed them that I accept the rescission.

Given that, would it not be the case that I return them the original sum loaned, but would also receive back the monies I have paid, and be able to sue for statutory interest? This would work out pretty much as even between the two parties.

I would also have s140 to apply, as s140 endures after the agreement, as well as the DPA infringement, and their treatment of me as a proper performing customer - I still haven't received a response to any of my letters.

There is also the failure of their systems to recognise the blatant error, with all the checks that the OFT specify should be in place to protect me, the consumer.

That may not benefit me financially, but it may be something they want to avoid as it could mean an expensive review of their processes by the OFT, who should be keen to find out if this has happened to any other of their clients, and how the OC dealt with them. If it can happen to one person, it can happen to anyone - the OFT seem clear on this. It may even be that this has happened before and they are supposed to have put it right.

[SeeThumb]

Re: Incredible though it may seem

Thanks for the replies.

Can I take it that there is nothing with regards to the original contract being a fixed term credit agreement that precludes any further sanction, or that protects the OC further. This is the most confusing point for me as other threads and forums have given the impression that this is a factor that will go against me.

[teaboy2]

Re: Incredible though it may seem

Hi

Yes all they would be entitled to would be the original amount owed, and no interest as rescission puts both parties back to where they were prior to the contract being signed. So they would not be entitled to any interest due under the agreement and would have to refund what interest you may have already paid if any at all. If you have already repaid the original loan amount and are now simply paying of the interest then you would be entitled to reclaim the amounts you have already paid as interest from them.

You could only claim statutory interest on top if they refuse to reimburse the amount of interest you have already paid, and by taking them to court for it.

Now did you specifically state in your letter that you excepted their rescission or did you just state you accepted the termination? As if you said termination and not rescission then your home and try and can send the letter about their repudiation. As termination and rescission are not the same.

Yes you will still have section 140 to rely on too. And any inaccurate recording of data should really be complained about to the information commissioners office as they will enforce and award you some compo too, where as the OFT do not actually act on individual complaints.

[teaboy2]

Re: Incredible though it may seem

Thanks for the replies.

Can I take it that there is nothing with regards to the original contract being a fixed term credit agreement that precludes any further sanction, or that protects the OC further. This is the most confusing point for me as other threads and forums have given the impression that this is a factor that will go against me.

No, as the full term of the fixed term had not completed, they defaulted you (wrongly) prior to the end of the loan period.

[SeeThumb]

Re: Incredible though it may seem

Now did you specifically state in your letter that you excepted their rescission or did you just state you accepted the termination? As if you said termination and not rescission then your home and try and can send the letter about their repudiation. As termination and rescission are not the same.

Thanks Teaboy

Unfortunately I did specify rescission. Even though I can see that this does reduce my position, I would still be happy to reduce my debt from 20k to 5k, so although I have co**ed up, I will still be in a much better situation than before.

I have also done something that may or may not have made things worse. I sent them an offer of settlement, which requested that they accept rescission, consider the monies paid by both parties to date to be settlement of the situation and that they make good all their unlawful and erroneous actions, plus they pay 1k to cover other damages/compensation/costs. It was as much an attempt to get a reply out of them as anything else.

If they don't accept this offer, which I do not imagine they will, would it then be possible for me pursue your unlawful repudiation model above. As I say, they still haven't even acknowledged my earliest posts where I accepted rescission.

They have dealt so badly in this that I can't see them getting much sympathy from a court.

[teaboy2]

Re: Incredible though it may seem

Thanks Teaboy

Unfortunately I did specify rescission. Even though I can see that this does reduce my position, I would still be happy to reduce my debt from 20k to 5k, so although I have co**ed up, I will still be in a much better situation than before.

I have also done something that may or may not have made things worse. I sent them an offer of settlement, which requested that they accept rescission, consider the monies paid by both parties to date to be settlement of the situation and that they make good all their unlawful and erroneous actions, plus they pay 1k to cover other damages/compensation/costs. It was as much an attempt to get a reply out of them as anything else.

If they don't accept this offer, which I do not imagine they will, would it then be possible for me pursue your unlawful repudiation model above. As I say, they still haven't even acknowledged my earliest posts where I accepted rescission.

They have dealt so badly in this that I can't see them getting much sympathy from a court.

Right so you offered them the chance to agree to rescission?

If so and they haven't agreed, then i would say you should send a letter withdrawing your offer for them to agreed to rescind the contract and inform them their actions are in repudiation of contract and they are therefore no longer entitled to any sums other than arrears (which there are no arrears) under the agreement that they repudiated.

[SeeThumb]

Re: Incredible though it may seem

Thanks Teaboy,

I will look into this right away.