OFT Statement on BBC

[Yoda]

The general position is that lenders who wish to chase defaulting borrowers for the repayment of their loans have to comply with a number of obligations.
One of them is that under sections 77-79 of the Act they should supply a "true copy" of the original signed loan agreement within 12 days of the borrower asking for it.

If they do not then the debt is unenforceable until such time as the copy can be provided

In particular, the regulator points out that it is perfectly legal and proper for a bank that has lost the original loan agreement, or whose copy is illegible, to supply an accurate "reconstituted" version instead, to show that the agreement did in fact include the information specified by the Act.

WTF?? I thought if they have lost the original, they cannot pursue the debt? They could 'reconstitute' any old agreement to suit.

[Curlyben]

Re: OFT Statement on BBC

*Cough*

s60 and 61 has something to say about that, after all they may well have the material facts correct, but without the debtors signature they can whistle..

[Ruby]

Re: OFT Statement on BBC

'to show that the agreement did in fact include the information specified by the Act'.

For those of us who for months have been told by financial instutitions that an Application Form is enforceable with most of the valid information missing this is not bad news. Even those of us who have got unsigned agreements again this cannot be bad news.

[gaz2006]

Re: OFT Statement on BBC

*Cough*

s60 and 61 has something to say about that, after all they may well have the material facts correct, but without the debtors signature they can whistle..

I think u may be wrong mate read this "Seems an unsigned agreement may be enforced through the courts as long as the creditor can prove "on the balance of probabilities" that a document was signed by the debtor or hirer "

So if a a lawyer does witness statement etc stating the bank would have done this and that as their there procedures said this etc then the court could rule it could be enforced with a reconstituted agreement with no signature comments pleas
regards Gaz

[fuzzybrain]

Re: OFT Statement on BBC

They will have to produce a contract which was available at the time, so producing one that is enforceable now, wouldn't stand up, if the contract did not have the exact terms as the one you could have signed.

However if it doesn't meet the prescribed terms, then signed or unsigned its not enforceable surely???

[ed.]

Re: OFT Statement on BBC

Gaz - it's quoted as such in the most recent caselaw update CCA case recent judgments for reference - Legal Beagles

BUT even if that is held to be true, and the balance of probabilities shows the agreement was most likely signed, the agreement that was most likely signed still has to be thoroughly enforceable.

However, a big play is made on the unfairness of creditors losing agreements in God like acts ie fire. Therefore I would apply the interpretation that the Judge in question had that in mind when talking about the balance of probabilities of being signed AND allowing a reconstituted version for possible enforcement.

However that can be clearly ascertained, has there been a fire at the storage facility...if the agreements are on microfilche or otherwise electronically stored have backups been made, if not why not, would the losses by being unable to enforce an agreement lost in such an Act of God be covered under insurance, etc etc etc.

The whole 'balance of probabilities' loops to an unfair relationship. It has always materially accepted in CPR, caselaw etc that the original agreement HAS to be provided. If it is not and a claim is launched via a reconstituted copy then the burden of proof moves to the Creditor to show they have a valid reason for not holding the original first and foremost.

Across the forums we have a good idea on 'what' years each company is likely to have issued unenforceable agreements because of the template nature of their documentation - if a reconstituted version (minus signature) is totally compliant, then a quick search can provide 'actual' agreements showing whether or not it is in fact 'true' in reconstruction.

The issue of probability of signing would be a secondary concern.

[Yoda]

Re: OFT Statement on BBC

http://www.ft.com/cms/s/0/d3f9d0a6-0...nclick_check=1

[Amethyst]

Re: OFT Statement on BBC

http://www.ft.com/cms/s/0/d3f9d0a6-0...nclick_check=1

Can you paste it Yoda (or pm it me) - I've used up my 10 articles for the month (already!) stupid system

anyway think its regarding this - OFT draft guidance on sections 77,78 and 79 of the Consumer Credit Act 1974 - Legal Beagles ?

[EXC]

Re: OFT Statement on BBC

Ruling to force lenders to write off debts

By Andrew Bounds, North of England Correspondent
Published: January 14 2010 02:00 | Last updated: January 14 2010 02:00



Lenders could have to write off millions of pounds in loans to customers who have not been provided with proper terms and conditions after a High Court ruling clarified when such debts are unenforceable.


The Office of Fair Trading is to circulate new draft guidance to lenders this month along the lines of Judge David Waksman's December ruling after a slew of consumer claims. He found that lenders cannot enforce debts unless they can provide a "true copy" of an original agreement, according to the 1974 Consumer Credit Act.


The issue is at the heart of thousands of pending cases and should lead to many being settled out of court now the principle is established.


Carl Wright, chief executive of Cartel Client Review, a Manchester-based claims company that brought the test case, has called on banks to end their resistance and settle cases after the deadline for an appeal passed. He predicted up to a million claims in 2010 and said his company had 250,000 clients on its books.


Lenders will no longer be able to stall by saying they cannot find the agreement, or create a new one with the correct terms and conditions, Mr Wright says.
"This is a major victory for consumers and will open the floodgates. All the loopholes that lenders have been using to avoid redress have been removed by the High Court. Where a bank or credit card company is in breach of Section 78 of the act the agreement is legally unenforceable," he said.


Under sections 77-79 of the act, lenders must supply a "true copy" of the original signed loan agreement within 12 days of the borrower asking for it.
If they do not then the debt is unenforceable until the copy can be provided.


The draft OFT guidance says that during that time a lender cannot write to a debtor demanding payment or threatening legal action.


"The creditor or owner should make it clear in communications to the debtor that the debt is in fact unenforceable," it says.


The OFT and Judge Waksman have backed lenders' right to provide an accurate copy, rather than the original agreement, and to change the terms of a loan provided they keep customers informed.


The British Bankers' Association welcomed the judge's ruling, but would not comment on the OFT guidance until it saw it.


Draft guidance: http://www.ft.com/oft

[Amethyst]

Re: OFT Statement on BBC

Spin ( the article )

but the Draft Guidance is interesting.

[dogtired]

Re: OFT Statement on BBC

having been through the process we are still waiting for them to reply (Welcome)
As I understand it if they have not sent you a "true copy" within 12 weeks they canot enforce a loan?
(over a year now!)