Default Notices

[QCKate]

Something that might help some people that ive notice as a result of postings by Celestine, Mystery 1 and Flaming Parrot on the VIP Forum. It concerns the CCA 1974 s 87(1) requirements for Default Notices.

I think the DN will (should??) normally state the paragraph of the agreement that has been breached by not making payment.

Always worth checking (amongst other things) that the parapgraph thats quoted does in fact match the relevant paragraph in the copy agreement they send you. Ive got a DN that is faulty in various ways for an account for which ive never signed or even seen an agreement. Ive just found that in the reconstitututed agreement theyve sent me the minimum payment paragraph is 13 but the DN says para 8. So either the DN is faulty or its not the right agreement

QCK

[mystery1]

Re: Default Notices

MBNA ?

M1

[QCKate]

Re: Default Notices

MBNA ?

M1

Could be!!!!!!

[gravytrain]

Re: Default Notices

Something that might help some people that ive notice as a result of postings by Celestine, Mystery 1 and Flaming Parrot on the VIP Forum. It concerns the CCA 1974 s 87(1) requirements for Default Notices.

I think the DN will (should??) normally state the paragraph of the agreement that has been breached by not making payment.

Always worth checking (amongst other things) that the parapgraph thats quoted does in fact match the relevant paragraph in the copy agreement they send you. Ive got a DN that is faulty in various ways for an account for which ive never signed or even seen an agreement. Ive just found that in the reconstitututed agreement theyve sent me the minimum payment paragraph is 13 but the DN says para 8. So either the DN is faulty or its not the right agreement

QCK

Interesting idea, but don't know if I agree.

Case law has it that the Section 87DN is just the insertion of an extra remedy period within the usual procedure of termination after repudiatory breach of contract.

In other words if it wasn't there or if it was an unregulated agreement, the contract, when subject to a repudiatory breach would just mean the creditor was able to reclaim all sums ( including sums not yet due). This is in accordance with ordinary contract law.

The DN therefore is triggered by the breach of a core term of contract, on a loan this would be the failure to make repayments since the debtor has no other duty.

Breach of a contractual term would only require a payment of losses needed to return the agreement to the state before the breech took place otherwise it would be regarded as a penalty and of course not allowed under common law

.

[QCKate]

Re: Default Notices

Interesting idea, but don't know if I agree.

Case law has it that the Section 87DN is just the insertion of an extra remedy period within the usual procedure of termination after repudiatory breach of contract.

In other words if it wasn't there or if it was an unregulated agreement, the contract, when subject to a repudiatory breach would just mean the creditor was able to reclaim all sums ( including sums not yet due). This is in accordance with ordinary contract law.

The DN therefore is triggered by the breach of a core term of contract, on a loan this would be the failure to make repayments since the debtor has no other duty.

Breach of a contractual term would only require a payment of losses needed to return the agreement to the state before the breech took place otherwise it would be regarded as a penalty and of course not allowed under common law

.

I see what your saying Gravytrain. Not clearly made but my point really was that if the DN quotes a paragraph that relates to an agreement and it is not the correct para number in a reconstituted agreement then they have probably not provided the correct agreement - especially if they have lost the original agreement or there was never one in the first place.

QCK

[mystery1]

Re: Default Notices

http://www.legislation.gov.uk/uksi/1...ulation/2/made

(2) Any notice to be given by a creditor or owner in relation to a regulated agreement to a debtor or hirer under section 87(1) of the Act (which relates to the necessity to serve a default notice on the debtor or hirer in accordance with section 88 before taking certain action by reason of any breach of the agreement by the debtor or hirer) shall contain—

(a)

a statement that the notice is a default notice served under section 87(1) of the Consumer Credit Act 1974;

(b)

the information set out in paragraphs 1 to 3, 6 and 8 of Schedule 2 to these Regulations; and

(c)

statements in the form specified in paragraphs 4, 5, 7 and 9 to 11 of that Schedule.




(5) Where any statement is required to be in a form specified in a Schedule to these Regulations and is reproduced in the notice, then apart from any heading to the notice, trade names or names of parties to the agreement—

(a)

the lettering in the statement shall be afforded more prominence (whether by capital letters, underlining, large or bold print or otherwise) than any other lettering in the notice; and

(b)

where words are both shown in capital letters and underlined in any statement specified in a Schedule to these Regulations, they shall be afforded yet more prominence.


(6) The wording in any such statement shall be reproduced in the notice without any alteration or addition, and in relation to any statement to be contained in the notice the requirements of any note shall be complied with, except that the words “the creditor” may be replaced by the name of the creditor, by the expression by which he is referred to in the agreement or by an appropriate pronoun, and any consequential changes to pronouns and verbs may be used.



Must have information parts.






Details of agreement


1. A description of the agreement sufficient to identify it.


Parties to agreement


2.—(1) The name and a postal address of the creditor or owner.


(2) The name and a postal address of the debtor or hirer.


Details of breach of agreement and action required to remedy, or pay compensation for, the breach


3. A specification of:—


(a)the provision of the agreement alleged to have been breached; and


(b)the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either


(c)if the breach is capable of remedy, what action is required to remedy it and the date, being a date not less than seven days after the date of service of the notice, before which that action is to be taken; or


(d)if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and the date, being a date not less than seven days after the date of service of the notice, before which it is to be paid.


Action intended to be taken by creditor or owner


6. A clear and unambiguous statement by the creditor or owner indicating, if any action specified under paragraph 3(c) or (d) as required to be taken is not duly taken or if no such action is required to be taken, the action which he intends to take by reason of the breach by the debtor or hirer of the agreement—
(a)to terminate the agreement;
(b)to demand earlier payment of any sum;
(c)to recover possession of any goods or land;
(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred;
(e)to enforce any security;
(f)to enforce any provision of the agreement which becomes operative only on a breach of another provision of the agreement as specified in the notice,
at any time on or after the date specified under paragraph 3(c) or (d), or, if no action is specified under that paragraph as required to be taken, indicating the date, being a date not less than seven days after the date of service of the notice, on or after which he intends to take any action indicated in this paragraph.


Requiring earlier payment of any sum


8. Where a sum of money is required to be paid under the notice,
(a)the amount of the sum before deducting the amount of any rebate on early settlement;
(b)where any rebate on early settlement is allowable under the agreement or by virtue of section 95 of the Act—
(i)the amount of the rebate allowable calculated on the assumption that early settlement takes place on the date specified in the notice for earlier payment of the sum; and
(ii)the total amount to be paid after taking into account the amount of any rebate on early settlement, namely the difference between the amount shown in paragraph (a) above and the amount shown in sub-paragraph (i) .






Required statements

Action by the creditor or owner to be ineffective if breach remedied or compensation paid

4. Where any action is specified under paragraph 3(c) or (d) as required to be taken, a statement that the provision for the taking of any action by the creditor or owner such as is mentioned in paragraph 6 will be ineffective if the breach is duly remedied or the compensation is duly paid in the following form—
“IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH”.
Note:
This statement shall follow the specification under paragraph 3(c) or (d) of any action required to be taken.

Consequences of failure to comply with default notice

5. Where any action is specified under paragraph 3(c) or (d) as required to be taken, a statement indicating the consequences of the failure by the debtor or hirer to comply with the default notice in the following form—
“IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE DATE SHOWN THEN THE FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU [OR A SURETY]”.
Notes:

1.

This statement shall be followed by the specification under paragraph 6 of the further action intended to be taken by the creditor or owner.

2.

Creditor or owner to omit words in square brackets if there is no specification under paragraph 6(e) of any action intended to be taken to enforce any security.

Time order

9. A statement in the following form indicating that the debtor or hirer is entitled to apply under section 129 of the Act in England and Wales to the county court, in Scotland to the sheriff court or in Northern Ireland to the High Court or the county court for a time order—“IF YOU HAVE DIFFICULTY IN PAYING ANY SUM OWING UNDER THE AGREEMENT OR TAKING ANY OTHER ACTION REQUIRED BY THIS NOTICE, YOU CAN APPLY TO THE COURT WHICH MAY MAKE AN ORDER ALLOWING YOU OR ANY SURETY MORE TIME”.

General

10. A statement in the following form—“IF YOU ARE NOT SURE WHAT TO DO, YOU SHOULD GET HELP AS SOON AS POSSIBLE. FOR EXAMPLE YOU SHOULD CONTACT A SOLICITOR, YOUR LOCAL TRADING STANDARDS DEPARTMENT OR YOUR NEAREST CITIZENS` ADVICE BUREAU”. 11. A statement in the following form—“IMPORTANT—YOU SHOULD READ THIS CAREFULLY”.






Statute seems quite clear that they need to provide details of the breach.

Can you cite the case law please ?

M1

[gravytrain]

Re: Default Notices

Ah I see. Yes i see that, so you are saying that the agreement would not comply with a section 78 request because it would fail to be a true copy ?

[mystery1]

Re: Default Notices

Ah I see. Yes i see that, so you are saying that the agreement would not comply with a section 78 request because it would fail to be a true copy ?

No i am pointing out what the statute says a default notice must contain. Nothing to do with copies of an agreement at all.

M1

[gravytrain]

Re: Default Notices

Mystery you mean the section in green that says there must be a statement that a provision agreement has been breached ?

[mystery1]

Re: Default Notices

Mystery you mean the section in green that says there must be a statement that a provision agreement has been breached ?

The 2 parts in green, yes.

3. A specification of:—


(a)the provision of the agreement alleged to have been breached; and


(b)the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

M1

[gravytrain]

Re: Default Notices

I think is see what you mean,but I think if it meant that the contractual term must be stated or reproduced it would say so.

[gravytrain]

Re: Default Notices

The 2 parts in green, yes.

3. A specification of:—


(a)the provision of the agreement alleged to have been breached; and


(b)the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

M1

It is a provision of the agreement that the credit must be re-payed, nothing more.

[mystery1]

Re: Default Notices

It is a provision of the agreement that the credit must be re-payed, nothing more.

So why have a & b ?

M1

[gravytrain]

Re: Default Notices

a)The agreement provide credit as in the form of xxxxxxx

b)The defendant failed to repay said agreement.

[gravytrain]

Re: Default Notices

If you think about it , it goes back to my original point. The DN cannot quote a contractual term as being the sole cause of action, because by definition a contractual breach cannot be COA for the claim of all liabilities under a contract, it would be a penalty clause and subject to unfair term sanction.