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Hello everyone
At significant risk of exasperating some LBers (as this subject was thrashed almost to death here) I have an ongoing issue with an old credit card account. I've set out the background below but have disguised and/or changed the details for obvious reasons.
I had a credit card account with Bank X for many years. There was a balance of £10,000. As more money had been paid in than taken out, this money was interest and charges. I hit problems and missed a payment. Bank X responded by increasing the interest rate. Problems continued, arrears of £1,000 arose, and Bank X rightly served a default notice.
The notice was bad in that it required payment of £3,000 (it was later accepted by all parties that the notice was bad). I notified Bank X repeatedly in the expectation of a revised notice, with the aim of keeping this account and avoiding the steps the notice set out.
As the problems that led to the arrears had vanished, I was tempted to bring the account up to date and clear the arrears. This would have the effect of removing any complaint that Bank X might have against me. However, I refrained from doing this because it became clear that the bank would not budge from its position and holding on to unpaid arrears was the only bargaining tool I had. I had letters from the bank that assured me that its default notice was correct.
The account was then terminated (wrongly).
I continued to communicate with Bank X and got nowhere. It refused to perform the contract. I then wrote to the bank to say that I accepted that both parties had repudiated the agreement and that it was at an end. My understanding, such as it was, was that I now owed Bank X £10,000. However, I refused to pay this until Bank X had;
I had a further reason for taking this position; it seemed to me that the notice was bad and therefore that I was at risk of receiving another; if this happened, then Bank X could claim that the agreement wasn't ended and that contractual arrears would come into play. While it was unlikely that I would have to pay those arrears (due to X's breach of contract and its failure to serve notices under s.86C), my thoughts were that the bank could later claim I had the benefit of not paying interest and that, if I claimed compensation for damage and loss (if any), that money should be offset by the interest. In other words, Bank X might be in a position to effectively circumvent payment of compensation (eg, under DPA) by telling a court I had the benefit of an interest-free period.
At the time I considered that the agreement was ended outside its provisions (and those of CCA) and that the balance became a simple debt, repayable to X.
My first question is: did the agreement end when I accepted X's repudiation?
My second question is: can a party in breach (me) affirm the other party's repudiatory breach in order to end a regulated agreement?
Given that I knew I was in breach, after a few months I made the decision to pay the arrears as they were, bringing the account up to date. This made no difference to Bank X, other than stopping it from seeking the balance. The account remained dormant, the default remained on my CRF and X continued to refuse to correspond.
A year passed. Out of the blue, Bank X assigned the account to Bank Y. Bank Y then reinstated the agreement in full and expected me to continue to make contractual payments. I refused, and it reported another default on my CRF.
My third question is: did Bank Y have entitlement to reopen the agreement and continue where Bank X left off?
The matter as it stands is that I have a massive claim for compensation (DPA, harassment, costs) against Bank Y (Bank X has ceased credit card operations), but Bank Y says that this is offset by the years of interest that have been waived. It also says that the agreement wasn't ended until after assignment from Bank X, and so I was contractually liable to make payments. As I didn't, the default it has reported is correct.
My fourth and final question is: was I liable to make these payments, given that (as far as I knew) the agreement was ended?
Footnotes
In terms of accepting repudiation, I have been influenced by this thread OTR where, on post 332 (page 17), PT2537 says that a termination can be accepted by both parties and so "step outside" of the CCA.
PT also mentions Lloyd and Guest, authorities on consumer credit, although I cannot find this reference.
Please feel free to comment, even if it is to say I was misguided in my position!
At significant risk of exasperating some LBers (as this subject was thrashed almost to death here) I have an ongoing issue with an old credit card account. I've set out the background below but have disguised and/or changed the details for obvious reasons.
I had a credit card account with Bank X for many years. There was a balance of £10,000. As more money had been paid in than taken out, this money was interest and charges. I hit problems and missed a payment. Bank X responded by increasing the interest rate. Problems continued, arrears of £1,000 arose, and Bank X rightly served a default notice.
The notice was bad in that it required payment of £3,000 (it was later accepted by all parties that the notice was bad). I notified Bank X repeatedly in the expectation of a revised notice, with the aim of keeping this account and avoiding the steps the notice set out.
As the problems that led to the arrears had vanished, I was tempted to bring the account up to date and clear the arrears. This would have the effect of removing any complaint that Bank X might have against me. However, I refrained from doing this because it became clear that the bank would not budge from its position and holding on to unpaid arrears was the only bargaining tool I had. I had letters from the bank that assured me that its default notice was correct.
The account was then terminated (wrongly).
I continued to communicate with Bank X and got nowhere. It refused to perform the contract. I then wrote to the bank to say that I accepted that both parties had repudiated the agreement and that it was at an end. My understanding, such as it was, was that I now owed Bank X £10,000. However, I refused to pay this until Bank X had;
- removed the default it had reported on my CRF;
- called off its DCAs;
- written to accept that the agreement was ended;
- agreed that the balance could be paid in, say, a couple of installments.
I had a further reason for taking this position; it seemed to me that the notice was bad and therefore that I was at risk of receiving another; if this happened, then Bank X could claim that the agreement wasn't ended and that contractual arrears would come into play. While it was unlikely that I would have to pay those arrears (due to X's breach of contract and its failure to serve notices under s.86C), my thoughts were that the bank could later claim I had the benefit of not paying interest and that, if I claimed compensation for damage and loss (if any), that money should be offset by the interest. In other words, Bank X might be in a position to effectively circumvent payment of compensation (eg, under DPA) by telling a court I had the benefit of an interest-free period.
At the time I considered that the agreement was ended outside its provisions (and those of CCA) and that the balance became a simple debt, repayable to X.
My first question is: did the agreement end when I accepted X's repudiation?
My second question is: can a party in breach (me) affirm the other party's repudiatory breach in order to end a regulated agreement?
Given that I knew I was in breach, after a few months I made the decision to pay the arrears as they were, bringing the account up to date. This made no difference to Bank X, other than stopping it from seeking the balance. The account remained dormant, the default remained on my CRF and X continued to refuse to correspond.
A year passed. Out of the blue, Bank X assigned the account to Bank Y. Bank Y then reinstated the agreement in full and expected me to continue to make contractual payments. I refused, and it reported another default on my CRF.
My third question is: did Bank Y have entitlement to reopen the agreement and continue where Bank X left off?
The matter as it stands is that I have a massive claim for compensation (DPA, harassment, costs) against Bank Y (Bank X has ceased credit card operations), but Bank Y says that this is offset by the years of interest that have been waived. It also says that the agreement wasn't ended until after assignment from Bank X, and so I was contractually liable to make payments. As I didn't, the default it has reported is correct.
My fourth and final question is: was I liable to make these payments, given that (as far as I knew) the agreement was ended?
Footnotes
In terms of accepting repudiation, I have been influenced by this thread OTR where, on post 332 (page 17), PT2537 says that a termination can be accepted by both parties and so "step outside" of the CCA.
PT also mentions Lloyd and Guest, authorities on consumer credit, although I cannot find this reference.
Please feel free to comment, even if it is to say I was misguided in my position!
