CCA section 59

[InCourt]

59 Agreement to enter future agreement void.

(1)An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

(2)Regulations may exclude from the operation of subsection (1) agreements such as are described in the regulations.

Would anyone be able to describe in laymans terms what that means for me?

Also its my understanding that fixed sum credit is a loan, and running account credit would be like a credit card. Any agreements to have either are a regulated agreement? Where does that leave a current bank account with an over draft facility, is that a running credit facility?

[InCourt]

Re: CCA section 59

Or in simple terms, these conditions in a Loan Agreement............

3.2	If you fail to make a payment on time, you authorise us to collect the late payment by direct debit on the seventh business day after the payment was due. We may also use your direct debit to collect any repayments outstanding from loans that you asked us to repay using the loan. We will add any fee which you must pay us when your loan is transferred to our Collections department as explained in clause 2.8 to the current account you have with Lloyds TSB Bank plc or Lloyds TSB Scotland plc. We will tell you when we do this. If you do not have any available funds in your current account we will treat the addition of any fee as a request for an unplanned overdraft, or for the increase in your unplanned overdraft if you already have one, under the conditions which apply to your current account.
3.3	You authorise us to make repayments due to us under this agreement from current or savings accounts you have with Lloyds TSB Bank plc or Lloyds TSB Scotland plc if you do not pay them on time yourself. Unless we believe the funds from the current or savings account will be moved before repayments are made, we will give you at least 7 days advance warning before we do this.

Would Section 59 make this agreement void?

[Guest]

Re: CCA section 59

no

Section 59 is concerned with associated agreements. It ensures that If the goods are delivered or the services commence that the debtor does not automatically enter into any linked un-executed credit agreement. The are regulation made under this sections which exempts this section for written quotes or estimates.

[InCourt]

Re: CCA section 59

Hi Andy, thanks for the reply. Not sure i understand. I thought that agreement above does indeed bind you to entering into a prospective (unplanned over draft) regulated agreement?

[Guest]

Re: CCA section 59

No it has nothing to do with overdrafts, it is about linked agreements.

Overdrafts are indeed regulated agreements, although if entered into before Feb 2011 there was no need for any separate agreement.