Kafka - v - MKDP (Barclaycard)

[FlamingParrot]

Re: Kafka - v - MKDP (Barclaycard)

Make sure you actually take legal action as otherwise those bastards will never learn!

When deciding whether to take legal action or not one has to consider potential co$t$. Fighting credit defaults isn't that simple. The ICO guidance notes quoted above are just that, guidance, not statutes. You have to look at case law.

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

When deciding whether to take legal action or not one has to consider potential co$t$. Fighting credit defaults isn't that simple. The ICO guidance notes quoted above are just that, guidance, not statutes. You have to look at case law.

I wanna kick ass

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

When deciding whether to take legal action or not one has to consider potential co$t$. Fighting credit defaults isn't that simple. The ICO guidance notes quoted above are just that, guidance, not statutes. You have to look at case law.

I've never seen case law about this, although it's an issue I've always been aware of. This is the first time I've had the opportunity to fight it based on charges and I'm interested to see how it goes.

[nemesis45]

Re: Kafka - v - MKDP (Barclaycard)

DN sent 5 Nov 2012, but default not registered until 22 May 2013. Another fault with this.

The main issue is that the charges before the default were more than the amount of default. I've always known about this, but never had a claim where it applied.

A DN has no relation to the tine a default is actually record, a creditor is not bound to record a default if the DN is not complied with. This one appears to have been registered just within the ICO's " Guidance " of 6 months.

nem

[Berniethebolt]

Re: Kafka - v - MKDP (Barclaycard)

Hi
Have you read PT's blog entry about a similar case
https://consumercreditlitigationandd...lp-lose-again/

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

Hi
Have you read PT's blog entry about a similar case
https://consumercreditlitigationandd...lp-lose-again/

Thanks - I hadn't seen that one. Nice work.

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

This is the pOC tht I intend to file next week. I'd be grateful for any comments or suggestions.

Particulars of claim
Kafka - v - MKDP

Background to the claim

1 The Claimant had a credit agreement with Barclaycard from 2000 onwards (Visa 1234), hereinafter referred to as “the Account”.

2 The Account was governed by Barclaycard’s Standard Terms and Conditions (hereinafter referred to as “the Contract”), whereby Barclaycard was to advance credit facilities to the Claimant under a running credit account. The Standard Terms and Conditions could be varied from time to time.

3 The Agreement was a Regulated Agreement for the purposes of the Consumer Credit Act [1974], which essentially consisted of Barclaycard providing the Claimant with a credit card (“The Card”), which would allow the Claimant to make purchases and receive cash advances on credit. In return, Barclaycard was entitled to charge interest at the published rate.

4 Throughout the course of the Agreement, Barclaycard added numerous default charges to the Account for the Claimant’s failure to make the minimum payment by the due date and/or for exceeding the credit limit and/or if a payment was returned.

5 In 2008 the Claimant challenged Barclaycard over these charges and Barclaycard refunded the charges rather than defend the challenge in court.

6 Barclaycard continued to apply unlawful charges to the account, so that between 15/12/2009 and 5/3/2013, an additional £360 was added on to the account as penalty charges.

7 Barclaycard was served with a letter before action on 30 September 2012, but they refused to refund the additional charges on that occasion and the Claimant did not pursue legal action. The Claimant ceased paying towards the account when no legitimate debt existed any longer.

8 Despite being informed on 30 July 2012 that no debt remained, Barclaycard continued to apply unlawful charges to the account and also engaged various debt collection agencies to pursue the Account. These included: Risk Management Alternatives, NCO Europe, Allied International Credit and Wescot Credit Services. None of these agencies appeared to be aware that no debt existed.

Assignment of the account

9 On 15 May 2014 the Defendants wrote to the Claimant stating that the account had been assigned to them and claiming to be the “legal owner”.

10 Enclosed with the letter of 15 May was a supposed letter from Barclaycard notifying assignment of the Account to the Defendants on 10 April 2014. This letter was produced by the Defendants on the same day, using the same printer, as well as carrying the same date. Both letters were sent in the same envelope. The envelope was identified by a PO address at Bellshill in Scotland used by a different debt collectors called Mackenzie Hall.
This appears to be an attempt by the Defendants to reconstruct a Notice of Assignment – on Barclaycard-headed paper - as if it had come from the legal owner. No valid Notice of Assignment was ever sent by Barclaycard, despite the Defendant’s repeated claims that that was done.

11 Despite the lack of valid assignment, the Defendant has claimed ownership of the Account and has admitted being the Data Controller, as is confirmed by Experian.

12 If the Defendants are the legitimate owners of the Account, then they have inherited both the rights and the duties of that Account. Where debt collectors hold assignment for purchased debts, they claim the rights to 100% of the face value of the account (sometimes even more), despite only paying a very small amount to buy debts that have been written off for tax purposes. It follows that the assignee also inherits the duties and liabilities passed on from the original owners, who were aware that no debt existed and that the penalty charges needed to be refunded.

The current claim

13 On 27 July 2015 the Claimant wrote to the Defendant stating that no debt existed owing to penalty charges applied to the account and giving the Defendant the opportunity of settling the whole matter, in return for removing the unlawful default. The Defendant was also informed that unless the default was removed, legal action would follow, to remove the default and also to recover the outstanding charges. The Defendant replied on 4 August 2015 that they would not remove the default and that they still claimed that a debt existed.

14 On 13 August 2015 the Claimant served on the Defendant a letter before action requesting removal of the unlawful default and refund of the outstanding penalty charges and interest thereon. The Defendant replied on 17 August 2015 that they would not comply with the claim requirements and that the letter was their Final Response. This leaves the Claimant with no option but to take legal action for redress.

The penalty charges on the account

15 Between 15 December 2009 and 15 March 2013 Barclaycard applied £360 worth of penalty charges onto the Account (see Appendix 1).

16 The Claimant believes that these charges are unlawful for the following reasons:

17 Firstly, they are penalties at common law because they are profit generating, and not a true reflection of costs incurred.
The leading authority here is Dunlop Pneumatic Tyre Co. v. New Garages and Motor Co. AC 79. (1914)

18 Secondly, the charges are unfair terms under the Unfair Terms in Consumer Contracts Regulations (1999), No. 2083 SCHEDULE 2, Regulation 1.
(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation

19 Thirdly, the charges breach the former Office of Fair Trading’s 2006 findings in Calculating fair default charges in credit card contracts: A statement of the OFT's position, that such charges are unfair penalties.
As a result of that report, all banks were instructed to recalibrate their default charges to represent actual costs. In practice, no bank has ever done this and the industry standard is to charge the nominal ‘threshold for action’ set by the OFT at £12. Because this has not been done, all of the charges are invalid as unfair terms.

20 Fourthly, the charges breach the guidance of the former Financial Services Authority in terms of ‘treating customers fairly’.

21 For all of the reasons stated, the charges are unfair penalties/terms that have no legal basis. In view of the Defendant’s refusal to remove the unlawful default, the Claimant now seeks to recover all of the outstanding charges in addition to the default removal.

The rate of interest

22 During the lifetime of the account, the original creditor charged the Claimant at a contractual rate of interest (for purchases) then standing at 16.9%. That rate was applied to legitimate borrowing and also to penalty charges applied to the Account.

23 The Claimant has been denied the use of the £360 for a number of years and has needed to pay high rates of interest on any borrowing, largely due to the unlawful default related to this account and notified by both Barclaycard and the Defendant to the credit reference agencies. The Claimant therefore believes that an award of contractual interest is necessary to provide full restitution and a just remedy.

24 The Claimant would like to bring to the Court’s attention the House of Lords judgment in the case of Sempra Metals v Inland Revenue and another [2007] UKHL 34, which established new grounds for the awarding of compound interest at common law. The House held by a majority that compound interest is now recoverable at common law in restitutionary claims for money paid under a mistake.
Lord Hope of Craighead stated in his majority judgment:
“The time has come to recognise that the court has jurisdiction at common law to award compound interest where the claimant seeks a restitutionary remedy for the time value of money paid under a mistake.”

25 The Claimant therefore claims interest of 16.9% per annum, from the dates of the charges set out in Appendix 1 to the date of the claim, this being the sum of £266.87, and also interest at the same rate up to the date of judgment (or earlier payment) at a daily rate of £0.16

The default

26 According to the Claimant’s credit file from Experian, the default was registered on 22 May 2013. This was despite the fact that the Claimant had ceased payments in 2012 when no legitimate debt remained and had notified Barclaycard that no further payments would be made. The Default Notice was sent by Barclaycard on 5 November 2012, yet a further six months elapsed before the default was filed, extending the time that the unlawful default would remain on the Claimant’s credit files.

27 The Claimant believes that the default is flawed because the penalty charges applied to the account before the date of default amount to £360, where the registered default amount stands at £343. This means that the defaulted amount consists entirely of penalty charges applied to the account. The Defendant has been invited to correct this data but has refused to do so claiming that “…we are unable to remove the default that we have uploaded as this must be a true reflection of the management of your account.”

28 The Defendant is afforded principled rights under the Data Protection Act [1998], Schedule 1, Part 1 ("The Principles") in relation to the manner in which data is collated, stored and processed. Of particular note are Principles 3, 4 and 5:

"3. Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed.
4. Personal data shall be accurate and, where necessary, kept up to date.
5. Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes."

29 In the instant case, the Claimant asserts that the Defendant is knowingly processing inaccurate and detrimental data without consent and the Claimant asserts, therefore, that any default amounts to a material breach of the Fourth Principle of The Data Protection Act [1998].
Financial institutions have no statutory right to record data on accounts with the credit reference agencies, but claim this as ‘industry standard practice’. The authority to do this is questionable in all cases and particularly where the account in question was not in arrears at the time that the default was first registered.

30 In addition, the Information Commissioner’s Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies [2014] (page 7) state clearly that:
“A default should not be filed if the amount outstanding is solely made up of fees or charges”.
The Claimant therefore believes that the default is both unlawful and unjust and must be removed from the Claimant’s credit files. This has been explained to the Defendants who refuse to remove the default.

31 The Claimant argues that the processing or continued processing by the Defendant of the said data affects the Claimant’s credit rating and reputation and causes substantial damage and/or substantial distress to the Claimant and other family members, in addition to that which has been caused to date. Additionally, the processing of the said data in the way referred to in this Claim violates both the Principles of - and the Data Subject’s rights under - The Data Protection Act [1998], being both unwarranted and unlawful.

32 The Claimant requests an order from the Court under s.14(1) (for the erasure of the incorrect information, held by the Defendant) and s.14(3) (for the blocking or erasure of the data passed to credit reference agencies, by the Defendant) of the Data Protection Act [1998], for the removal of the default and any other information relating to this agreement, that may cause prejudice or further damage to the Claimant or his family:

“14. - (1) If a court is satisfied on the application of a data subject that personal data of which the applicant is the subject are inaccurate, the court may order the data controller to rectify, block, erase or destroy those data and any other personal data in respect of which he is the data controller and which contain an expression of opinion which appears to the court to be based on the inaccurate data.
14. – (3) Where the court—
(a) makes an order under subsection (1), or
(b) is satisfied on the application of a data subject that personal data of which he was the data subject and which have been rectified, blocked, erased or destroyed were inaccurate, it may, where it considers it reasonably practicable, order the data controller to notify third parties to whom the data have been disclosed of the rectification, blocking, erasure or destruction.”

Claim details

33 The Claimant has tried to settle the matter prior to litigation, but the Defendant has refused to remove the default. Accordingly, the Claimant claims the following:
(a) The removal of the unlawful default and all negative data recorded with the credit reference agencies.
(b) Refund of the £360 worth of penalty charges applied to the account.
(c) Interest at the Account’s historical rate of interest of 16.9% per year from the date of each transaction until the date of filing this claim, currently standing at £266.87, and also interest at the same rate up to the date of judgement or earlier payment, at a daily rate of £0.16
(d) All applicable court fees.

Statement of truth

The Claimant believes that the contents of these particulars of claim are true.

Signed:


Date:

[Berniethebolt]

Re: Kafka - v - MKDP (Barclaycard)

I have no legal training however from reading the statement above my initial reaction is that you are muddying the waters and making claims that can easily be explained or challenged.

These firms use mailing companies so the fact that the return to address was the same as MH is , IMHO of no relevance

The NOA appears to be perfectly legal , all that is required is that either the old or new owner tell you about the change of ownership therefore the assignment is valid . If the assignment is not valid you would have no claim against MKDP

What is the proof that the NOA's were printed on the same printer and is it relevant?

Is it relevant that MKDP did not pay face value for the debt -if you bought an item in a shop at the sale price and it was faulty would you expect to get back the full normal retail price?

I understand the part about being charged higher rates of interest but how have you been denied the use of £360 . You stopped paying BC when the balance was -360 , you have not repaid this therefore you are not out of pocket on this point. As I do not see how you were deprived of £360 , how can you be claiming that and interest?

I am most certainly not pro bank , in fact I am anti bank but I think that by having irrelevant bits in the statement you may harm your case

Surely the court needs to decide if the charges are unlawful and if so what damage they have caused you . So in effect what you want is for the account to be closed , the default removed and damages paid for the loss you incurred due to higher interest rates as well as costs

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

I have no legal training however from reading the statement above my initial reaction is that you are muddying the waters and making claims that can easily be explained or challenged.

These firms use mailing companies so the fact that the return to address was the same as MH is , IMHO of no relevance

The NOA appears to be perfectly legal , all that is required is that either the old or new owner tell you about the change of ownership therefore the assignment is valid . If the assignment is not valid you would have no claim against MKDP
The point here is that MKDP claim that Barclaycard sent a NoA when that never happened. I am merely stating that fact.
I have stated clearly that I believe MKDP to be the owners, even despite the assignment details. This is relevant because in their letters they have deflected responsibility for the charges onto Barclaycard as they don't apply them. I don't want them to try to use that as a way out or liability.

What is the proof that the NOA's were printed on the same printer and is it relevant?
Same folds, same machine coding in the margin and sent in the same envelope.

Is it relevant that MKDP did not pay face value for the debt -if you bought an item in a shop at the sale price and it was faulty would you expect to get back the full normal retail price?
This is with reference to the fact that DCAs use all the rights of the assignment to make a profit, so must accept the liabilities. I'm not contesting the price they paid, this is background information that is not part of the claim.

I understand the part about being charged higher rates of interest but how have you been denied the use of £360 . You stopped paying BC when the balance was -360 , you have not repaid this therefore you are not out of pocket on this point. As I do not see how you were deprived of £360 , how can you be claiming that and interest?
They took money off me as penalties and I'm still without that money. That has nothing to do with what they claim is still owed to them.

I am most certainly not pro bank , in fact I am anti bank but I think that by having irrelevant bits in the statement you may harm your case
I don't know what you think is irrelevant. The assignment details are relevant because I suspected they might try to disclaim responsibility for the charges. It's also relevent because MKDP have categorically stated that BC sent a NoA when that never happened.

Surely the court needs to decide if the charges are unlawful and if so what damage they have caused you . So in effect what you want is for the account to be closed , the default removed and damages paid for the loss you incurred due to higher interest rates as well as costs
I state that the charges are unlawful because there is statute to show that as well as the other reasons cited.
Removing the default would effectively close the account, yes.
I am not seeking damages as such so aren't trying to quantify that as part of the claim. It's the principle here only being used to request contractual interest on the money owed rather than Standard Interest.

....

[FlamingParrot]

Re: Kafka - v - MKDP (Barclaycard)

A couple of quick comments on all the above if I may.

I'm sorry but in principle I have to agree with MKDP that the charges were not imposed by them therefore you shouldn't reclaim them from them, it's the same principle with PPI, which is always reclaimed directly from the bank and not the debt purchaser because they did not sell you any PPI, even if the outstanding balance they bought was largely made out of PPI and interest on it, etc. There are, as you know, cases where PPI has been refunded directly to the debtor even when there is an outstanding balance, it has not been offset because the account has been assigned in absolute. By the same token, surely any claim for charges should be addressed to Barclays and not MKDP. It's not the legitimacy of the assignment that's in question here but liability for the charges imposed by Barclays.

I also have my doubts with regards to the late default being relevant to the claim, surely this is an issue to be address to MKDP to start with, following with a complain to the ICO if their response is not satisfactory. If you are not making any claim for damages sustained as a result of credit reporting, should this be part of the claim at all?

Following on from Bernie's comments above, I'm neither pro-bank nor pro-MKDP, I just can't see how they can be held responsible for someone else's actions long before they acquired the account.

[Berniethebolt]

Re: Kafka - v - MKDP (Barclaycard)

Kafka
I didn't mean to offend but you did ask for input. You say that these are the POC that will be the start of the journey. I was always under the impression that the detail came later in witness statements.
If I may ask you a question, If I ask FP to send a letter for me and dictate the contents has it been sent from me or FP , I would think it's a spurious technicality especially when the law doesn't require me to send the letter just to make sure it is sent.

I take your point about fold etc however to play devils advocate , without knowing the procedures of the printers i.e. do the codes refer to particular printers etc it is still an arguable point. They may have several lines running, one printing out MKDP, another B/C another RW etc etc. You may well be right but I still am not sure if it is not just smoke and mirrors .

It is law that when a debt is sold they take on rights and responsibilities but..have you taken any legal advice as to who is to blame for the fees. It might be 2 separate claims.

I am not sure I fully understand how they took money off you when you say the charges are £360 and the balance when you stopped paying was c £360

The unlawful/illegal argument has always caused me problems. I know OTR they are or were always claiming that any bank charges were unlawful and should be claimed back but I never saw anyone do it . When were the charges applied as could the L.A. come into play on their part i.e 6 years from the cause of action i.e the last charge?

I truly wish you well, should you win and I hope you do then I would imagine that MKDP who have deep pockets will appeal and appeal . Unless of course you would settle out of court .

If it were me i would settle with a write off and removal of default

[nemesis45]

Re: Kafka - v - MKDP (Barclaycard)

Barclaycard did supply an NOA the fact that it was printed from a template by the debt purchaser affects nothing, it is a legal assignment.
The debt purchaser was not responsible for the placing / registering a default, this is entirely the responsibility of the original creditor, the debt purchaser can only update credit files with its details the default date must remain as on the original entry.

As to the removal of a default entry I can seen reason for this to happen it seems the account was properly defaulted.
The debt purchaser cannot be held responsible for charges added by the original creditor of for PPI these should have been taken up as soon as possible with the OC.

If you carry this case forward I think it will fail.

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

A couple of quick comments on all the above if I may.

I'm sorry but in principle I have to agree with MKDP that the charges were not imposed by them therefore you shouldn't reclaim them from them, it's the same principle with PPI, which is always reclaimed directly from the bank and not the debt purchaser because they did not sell you any PPI, even if the outstanding balance they bought was largely made out of PPI and interest on it, etc. There are, as you know, cases where PPI has been refunded directly to the debtor even when there is an outstanding balance, it has not been offset because the account has been assigned in absolute. By the same token, surely any claim for charges should be addressed to Barclays and not MKDP. It's not the legitimacy of the assignment that's in question here but liability for the charges imposed by Barclays.

I also have my doubts with regards to the late default being relevant to the claim, surely this is an issue to be address to MKDP to start with, following with a complain to the ICO if their response is not satisfactory. If you are not making any claim for damages sustained as a result of credit reporting, should this be part of the claim at all?

Following on from Bernie's comments above, I'm neither pro-bank nor pro-MKDP, I just can't see how they can be held responsible for someone else's actions long before they acquired the account.

Thank you for your useful comments. The idea of reclaiming the charges from BC is one that I will look into. However, that still leaves me with MKPD claiming that I owe them a debt where there is none and I need to establish that as well as having them remove the default.

There is also an issue here of ownership, as both MKPD and BC are registering data as if they are the legal owner. The default is being reported twice, which is I why the issue of assignment and ownership is so relevant. MKPD are denying responsibility for the charges, though they are happy to chase consumers for accounts where charges have been applied. Barclaycard could turn around and say its nothing to do with them because they sold the account with all of its rights and duties.

Basically I have to remove 2 defaults being registered and one set of charges, so its not been a simple case of mounting a challenge.

[Kafka]

Re: Kafka - v - MKDP (Barclaycard)

Kafka
I didn't mean to offend but you did ask for input. You say that these are the POC that will be the start of the journey. I was always under the impression that the detail came later in witness statements.
No offence taken - I'm glad to have the comments.

If I may ask you a question, If I ask FP to send a letter for me and dictate the contents has it been sent from me or FP , I would think it's a spurious technicality especially when the law doesn't require me to send the letter just to make sure it is sent.
The issue of assignment is important here because both MKPD and BC are registering data and default. I accept that MKPD are classed as the owners otherwise I wouldn't be dealing with them, but if the debt was properly assigned BC never stopped treating it as if they still own it. This is a problem with fabricated NoA sent by debt collectors themselves. I once had a small debt in dispute with Scottish Power that I settled at discount with one DCA. I then had 3 DCAs all writing to me claiming it had been assigned to them, when now the data registration is still only done by the OC. You simply can't trust DCAs when they claim to be the assignee, when you never had notification from the OC that it had been assigned formally.
In this case no formal notification was ever sent by BC, despite the claims of MKPD that that was done. I do not know whether BC still claim to own the account, I only know that they are still registering data as if they do,

I take your point about fold etc however to play devils advocate , without knowing the procedures of the printers i.e. do the codes refer to particular printers etc it is still an arguable point. They may have several lines running, one printing out MKDP, another B/C another RW etc etc. You may well be right but I still am not sure if it is not just smoke and mirrors .
I once helped someone with a claim from Cabot where they sent one of these fake NoA on headed paper, but the signature credit was for a different back. Despite pointing this farcical issue out, they still insisted that the assignment process had been properly followed.

It is law that when a debt is sold they take on rights and responsibilities but..have you taken any legal advice as to who is to blame for the fees. It might be 2 separate claims.
See my reply to FP on this. I will look into reclaiming the fees from BC, but I don't think they are now the owners and they have sold on all rights and duties. If we accept that they are now the legal owners then why should they deal with this when it's no longer their responsibility? I don't know how they would react.

I am not sure I fully understand how they took money off you when you say the charges are £360 and the balance when you stopped paying was c £360
I stopped paying when the balance of the account consisted entirely of charges and wrote to tell them this, but they continued to apply charges.

The unlawful/illegal argument has always caused me problems. I know OTR they are or were always claiming that any bank charges were unlawful and should be claimed back but I never saw anyone do it . When were the charges applied as could the L.A. come into play on their part i.e 6 years from the cause of action i.e the last charge?
This is a regulated account so quite different from bank charges. They are unlawful and reclaimable for all of the reasons I have explained in the POC.
There is no Limitation issue here. All charges were applied with the last 6 years.

I truly wish you well, should you win and I hope you do then I would imagine that MKDP who have deep pockets will appeal and appeal . Unless of course you would settle out of court .
I don't know how a DCA would react to a claim like this. I did offer to settle just for default removal but they are adamant that they won't do that. The only reason I included the charges reclaim was because they were forcing me to take legal action. My guess if that they think I'm bluffing about filing at court and I don't know how they would react.

If it were me i would settle with a write off and removal of default

.....

[nemesis45]

Re: Kafka - v - MKDP (Barclaycard)

The process of reporting defaults to CRA's is progressively changing with the ICO looking towards showing
a running report on the conduct of an account, in the past it was practice for the original creditor to remove the original
CRA entry and for the debt purchaser to replace it with their entry the default date remaining the same. Now it is reasonable for both entries to show the OC's entry being marked settled at the date the debt was purchased.
SO you have two records 1 settled one live. Not two live ones.

Even so the entity to challenge for removal of the defaults is the OC.

Why do you consider there is no debt? The NOS's are correct.
Your argument as the charges, am I right in thinking you challenge this on the ICO's guidance that " If a default sum is made up of charges without which the account would not have been defaulted, no default should be placed" the you need to check the date the guidance was issued as it is not retrospective. In any event your case is with Barclays not MKDP.