Momentum Network / CCK

[davidjack ppc]

Re: Momentum Network / CCK

Reading with great interest, but still cant get my head around how they
a) how they make money
b) can 'own' the debt
c) decide which cases to take or not
e) obtain clients in the first place
f) if they go for f&f settlement, then surely there are many cases that wouldn't settle for less than the 10% plus the fee they charge?

Sorry if I'm missing something, or going over old ground....

Reading with great interest, but still cant get my head around how they
a) how they make money
b) can 'own' the debt
c) decide which cases to take or not
e) obtain clients in the first place
f) if they go for f&f settlement, then surely there are many cases that wouldn't settle for less than the 10% plus the fee they charge?

Sorry if I'm missing something, or going over old ground....

its simple, they cant buy debt, your the borrower cannot just discharge your obligation like that - read section 94 of the consumer credit act, the agreement is regulated and therefore precedented in law and exempted from the so called 'arguements' they put forward.

Anyone who wants a copy of the ruling and decisions then please email me at davidjack@stokenorthlibdems.com and i will send you a full copy of the legal basis that you cannot discharge a regulated agreement in the manner cck claim. You can also view the document at http://www.stokenorthlibdems.com/fin...FT16102009.pdf

Further as i have previously stated....The text book "An Outline of the Law of Contract" by GH Treitel says " Assignment is the transfer of a right without the consent of the debtor. The Law does not recognise any converse process by which a liability can be transferred without the consent of the creditor" Treitel cites the House of Lords case of Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 at 103 as authority for that proposition

CCK cannot piecemeal decide which bits of law they accept and which pieces they ignore.

There is not one single precedent case in which CCK have been ruled to own the liability for the debt, they very cleaverly submit a section 20 notice to be joined in the original borrowers case. If they owned the debt and the liability they would not need to be joined unsder section 20 but would rather be issued against by the lender in their own right.


I have challenged them to put me in court for libel if i am wrong, you will find no proceedings being brought or won against by cck, that much i am sure of.!!

The lenders dont, and will not make offers of 10% in full and final settlement to cck, why should they?

[natweststaffmember]

Re: Momentum Network / CCK

Can I ask you about case law Essar Steel v. The Argo Fund Ltd(2006) EWCA Civ 241 re loan transfers(not sure if relevant to CCK to be honest but thought I would throw it into the mix)?

[hunter_01]

Re: Momentum Network / CCK

its simple, they cant buy debt, your the borrower cannot just discharge your obligation like that - read section 94 of the consumer credit act, the agreement is regulated and therefore precedented in law and exempted from the so called 'arguements' they put forward.

Anyone who wants a copy of the ruling and decisions then please email me at davidjack@stokenorthlibdems.com and i will send you a full copy of the legal basis that you cannot discharge a regulated agreement in the manner cck claim. You can also view the document at http://www.stokenorthlibdems.com/fin...FT16102009.pdf

Further as i have previously stated....The text book "An Outline of the Law of Contract" by GH Treitel says " Assignment is the transfer of a right without the consent of the debtor. The Law does not recognise any converse process by which a liability can be transferred without the consent of the creditor" Treitel cites the House of Lords case of Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 at 103 as authority for that proposition

CCK cannot piecemeal decide which bits of law they accept and which pieces they ignore.

There is not one single precedent case in which CCK have been ruled to own the liability for the debt, they very cleaverly submit a section 20 notice to be joined in the original borrowers case. If they owned the debt and the liability they would not need to be joined unsder section 20 but would rather be issued against by the lender in their own right.


I have challenged them to put me in court for libel if i am wrong, you will find no proceedings being brought or won against by cck, that much i am sure of.!!

The lenders dont, and will not make offers of 10% in full and final settlement to cck, why should they?

I’d just like to point out that this gentleman’s behaviour towards me and others on the thread on scam.com has been nothing short of disgusting.


The language he used and the obscenities he wrote in regards to me were unacceptable. Everyone on legal beagles is welcome to read the thread and I’m happy to provide a link if need be.


I’d like to mention and acknowledge the commendable manner in which all the legal beagle users have discussed the subject at hand and the legalities of the issue.

This was not possible on the other site as the discussion soon disintegrated into a farce and this was solely due to the aggressive, disgusting and wholly disgraceful behaviour of this gentleman.


Before I discuss his post I’d like to point out that he genuinely believes that it is possible and justifiable to attempt to obtain a declaration of unenforceability under the CCA by way of a claim.


I have outlined to him that unenforceability is a defence however he does not agree even though I’ve provided him with the evidence of this fact.

The sole reason for his need to hold this position is due to the fact that he has led so many people down the claims management path and this was undeniably and unquestionably revealed to the horror of some of his followers on the other site.


I do believe that we have already in this thread established that unenforceability is a defence and perhaps someone may want to explain this to this gentleman.
In regards to his post ...He’s wrong. You can buy debt.
We’ve already discussed that section 98 of the CCA provides a debtor with the right to terminate.
I’ve already pointed out that termination rights of the debtor are ultimately inconsequential as the lender must terminate prior to court action anyway.



In regards to his paragraph on Treitel on contracts the point is of absolutely no relevance. Any point made using arguments citing contract law are irrelevant as contractual rights are not being sold/assigned.


This man’s posts do not deserve the recognition to be responded to & I will not be responding to any further posts by him. The only details of debt sale that he does know have been given to him by me.
He has never had any understanding of the model except that which has been explained to him by me.
So any attempt that he makes to promote the illusion that he has any real understanding of the issue established through his own research it absolutely ridiculous.


If you disagree with this man he will not defend himself through legal arguments. What he will do is to unleash a tirade of abuse at you.


I have no need to say anymore. Everyone can read the other thread and make up their own minds about the integrity and behaviour of this man.

[Amethyst]

Re: Momentum Network / CCK

Hunter - I am fully aware of Davids links with CMCs, and his actions on other sites, it doesnt make his opinion any less valid than your own, and I take this into account when reading his posts or comments here or elsewhere.

David - I am fully aware of Hunters links with CCK, and that doesnt make his opinion any less valid either, and the rest of the above goes for him too.

You two are on opposite sides of a very small fence. I don't have trust in either of you, because I don't know you, however I am interested in the legal issues and the arguments you both put forward. Discussing these issues and the law, court process, and DCA's, can only help people understand and use the law positively against companies who do, on occassion, make peoples lives hell. And it probably helps you as well in your prospective fence positions.

Our only interest here is the consumer and the individual. If it means looking at the operations of some CMCs to inform people so they understand what they are actually getting in to, then so be it.

This thread has, so far, been kept on topic (barring maybe the last page), so can we keep it that way, and not make it into a battle ground of CMC's vs CCK.

[Amethyst]

Re: Momentum Network / CCK

On that note; Hunter - can you tell me if this is correct for the CCK business model ?

Re: Momentum Network / CCK
You (the consumer) borrow money off a lender.
You spend said money.
You decide you can't pay it back, so you sell the debt on to Basil (paying him £450 plus 10% of the debt) to get it off your back
Basil doesn't repay the debt either and negotiates with bank for a reduced F&F settlement.
Bank doesnt play ball or recognise Basil owns debt so sues YOU.
YOU defend saying Basil owns the debt. (then it goes hypothetical as its not yet been proven in court)
The court agrees and tells the lender to bog off and sue Basil.
Lender sues Basil instead.
Basil negotiates reduced F&F or claims loan unenforceable by virtue of CCA 1974, or pays up.


David - CMC business model - I know you have had your arguments with Cartel and the like and are working with Century21 et al now, so I wonder if you could do a PIL outline of the basic business model employed by ''traditional'' UCA CMC's ?

[davidjack ppc]

Re: Momentum Network / CCK

As i have stated previously, there is a court case coming up soon in the Stoke on Trent county courts, we shall see whose legal arguements stack up and whose fall flat on their faces then. As to date, CCK have not provided one single shred of evidence of any successes, of any court cases or of any legal precedents. Indeed the OFT describe the activities as unlawful - and they have not retracted that statement as of 4pm this afternoon.

As for the comments that i defend unenforceability of contracts, that is for another thread and many precedents have been set for flawed and breeched contracts, anyone can read up on the law there.

(And before Hunter starts making acusations that i was rep for CCK, thats another lie and lawyers are working on a case as we speak for those comments on their website).

[hunter_01]

Re: Momentum Network / CCK

Hunter - I am fully aware of Davids links with CMCs, and his actions on other sites, it doesnt make his opinion any less valid than your own, and I take this into account when reading his posts or comments here or elsewhere.

David - I am fully aware of Hunters links with CCK, and that doesnt make his opinion any less valid either, and the rest of the above goes for him too.

You two are on opposite sides of a very small fence. I don't have trust in either of you, because I don't know you, however I am interested in the legal issues and the arguments you both put forward. Discussing these issues and the law, court process, and DCA's, can only help people understand and use the law positively against companies who do, on occassion, make peoples lives hell. And it probably helps you as well in your prospective fence positions.

Our only interest here is the consumer and the individual. If it means looking at the operations of some CMCs to inform people so they understand what they are actually getting in to, then so be it.

This thread has, so far, been kept on topic (barring maybe the last page), so can we keep it that way, and not make it into a battle ground of CMC's vs CCK.

Happy to answer your questions Amethyst. I'm also happy to answer anyone else's questions.

I will not respond to any posts written by David Jack.

I just like you have no issues with anyone having an opinion.

However when you've been subjected to the abuse that I have been subjected to you have every right to decline responding to the individual regardless of whether they hold a valid opinion or not.
------------------------------- merged -------------------------------

On that note; Hunter - can you tell me if this is correct for the CCK business model ?

Re: Momentum Network / CCK
You (the consumer) borrow money off a lender.
You spend said money.
You decide you can't pay it back, so you sell the debt on to Basil (paying him £450 plus 10% of the debt) to get it off your back
Basil doesn't repay the debt either and negotiates with bank for a reduced F&F settlement
Bank doesnt play ball or recognise Basil owns debt so sues YOU.
YOU defend saying Basil owns the debt. (then it goes hypothetical as its not yet been proven in court)
The court agrees and tells the lender to bog off and sue Basil.
Lender sues Basil instead.
Basil negotiates reduced F&F or claims loan unenforceable by virtue of CCA 1974, or pays up.


David - CMC business model - I know you have had your arguments with Cartel and the like and are working with Century21 et al now, so I wonder if you could do a PIL outline of the basic business model employed by ''traditional'' UCA CMC's ?

Point number 5 is incorrect. No F & F

The bank could potentially sue the original debtor.

Point number 6 about going hypothetical is incorrect as the Rankine's only do for others what they have already done for themselves.

[charitynjw]

Re: Momentum Network / CCK

I am a relative newcomer to these forums, & I am enthralled by the reasoned debate & legalities which govern this issue.
I can't pretend to understand, but the posts are beginning to clarify things for me. (&, I suspect,for a good many other people)
It would be a pity, then, to descend into a slanging match.
A civilised, open & honest debate will benefit everybody

[natweststaffmember]

Re: Momentum Network / CCK

Hunter_01, can I ask you to highlight amethyst's post cos point 5 and point 6 can be quite bad especially as amethyst hasn't numbered the points so pre-caffeine in the morning, I am unsure of which is point 5 and which is point 6.

Can you clarify what you mean by saying Basil only does what others can do themselves? If that is the case that others can do it for themselves why is Basil not regulated like a traditional CMC by the MOJ?

The loan transfer part of it: I think I have mentioned on another forum but we do a transcript of a case where borrower has sold the debt to lender and lender having sued borrower has been told to go away as debt is no longer owned by borrower. That is the problem for me at the moment. I have read all the threads on SCAM/CAG and here(even on this is money as well) but still have yet to see a live case in action. That is the current problem, until we do then the questions still remain as to the credibility of the business model itself rather than necessarily the company itself.

[dildobaggins]

Re: Momentum Network / CCK

Happy to answer your questions Amethyst. I'm also happy to answer anyone else's questions.

I will not respond to any posts written by David Jack.

I just like you have no issues with anyone having an opinion.

However when you've been subjected to the abuse that I have been subjected to you have every right to decline responding to the individual regardless of whether they hold a valid opinion or not.
------------------------------- merged -------------------------------



Point number 5 is incorrect. No F & F

The bank could potentially sue the original debtor.

Point number 6 about going hypothetical is incorrect as the Rankine's only do for others what they have already done for themselves.

What do you mean going hypothetical is incorrect?
If the bank doesn't agree that CCK own the debt, then when they sue the original debtor, what are CCK going to do then?
Do they turn up in court for the debtor and say "we own it", end of story?

If there is no F & F at any stage, then what the hell happens then?
everyone gets sued or what!

Is it a case of if Bank sues debtor, debtor sues bank, CCK sues bank and everyone just sues one another?

[davidjack ppc]

Re: Momentum Network / CCK

In reply to Amesyt request for a PIL? omn claims management, check thi sout for substaantive law and opion....

(1) Improperly executed agreements to which section 127(3) applies.

(2) Improperly executed agreements to which section 127(3) does not apply.

(3) Breaches of the duty to give information under sections 77 and 78.

(4) Claims involving secret commissions.

(5) Claims involving PPI mis-selling.

Improperly executed agreements to which 127(3) applies

3. In relation to this category of claim, the considerations are as follows:

(1) Was the agreement made before 6 April 2007? If so, section 127(3) may apply; if not, it will not.

(2) Does the agreement comply with section 61(1)(a)? If it does not, section 127(3) prima facie applies; if it does, section 127(3) does not apply.

(3) Does the agreement fall within the proviso to section 127(3), namely, that there is a document signed by the debtor which contains all the prescribed terms. If not, section 127(3) will still apply; if so, it will not.

4. If the analysis of the claim concludes that section 127(3) applies, then the agreement will be unenforceable. This can be raised either as a defence to a claim by a creditor, or alternatively a claim can be brought by a debtor for a declaration of unenforceability pursuant to section 142(1)(b).

5. In my view, claims (or defences, as the case may be) falling within this category would have a very good (90%) prospect of success – the only real risk being that an incorrect analysis of the matters set out in paragraph 3 above takes place.

Improperly executed agreements to which section 127(3) does not apply

6. In respect of improperly executed agreements to which for any reason section 127(3) does not apply, the court has the power to make an enforcement order “if it is just to do so having regard to” various matters including the “prejudice caused by the contravention in question”, the “degree of culpability” and the various powers open to the court.

7. Further, as stated previously, the general practice of the court will be to make such an enforcement order unless it can be shown that the breach in question has caused prejudice to the debtor: Goode’s Consumer Credit: Law and Practice (Volume 2), para 5.247.

8. Such cases would therefore involve a separate analysis of the underlying merits of the debtor’s position, together with the production of substantial and bespoke witness statement evidence. Further, given the highly discretionary nature of the jurisdiction, the outcome of any particular case would be far from predictable (save to say that in the absence of the debtor being able to establish prejudice an enforcement order is likely to be made).

9. This being the case, therefore, I suspect that such cases will not be attractive to instructing solicitors as part of the group scheme now being proposed. In other words, while such cases may have merit, such cases would have to be considered wholly separate to – and outside of – the proposed group actions.

Breaches of the duty to give information under sections 77 and 78


(a) defending claims brought by the creditor

10. As previously advised, section 77 applies to fixed sum credit agreements (such as a credit sale, a hire-purchase agreement, or an independent loan agreement), while section 78 applies to running-account credit agreements (such as a credit card or an overdraft facility). In each case, where the debtor makes the appropriate written request (accompanied by the appropriate fee), the creditor is obliged to provide the debtor with a copy of the executed agreement (together with certain other information) within the prescribed period of 12 days.

11. If then the creditor fails to comply with the above requirement, “he is not entitled, while the default continues, to enforce the agreement”: sections 77(4)(a), 78(6)(a). In short, therefore, where the creditor fails to comply, there is an unanswerable defence to a claim by a creditor. As stated previously, however, that defence is of a temporary nature only, in that if in due course compliance takes place, the creditor is once again entitled to enforce. This being the case, it would appear that the appropriate relief is not the dismissal of the creditor’s claim, but rather a stay: Rankine v American Express Services Europe Ltd (unreported, May 16, 2008), para 16. Of course, in practice, if a creditor is not able to comply prior to trial, it is likely that it will never be able to comply such that the stay is likely to be permanent. Nevertheless, the fact that the relief which would be ordered is likely to be a stay as opposed to a dismissal should be taken into account in the drafting of any conditional fee agreements: it is vital that the definition of success should include the granting of a stay.

12. With this in mind, in respect of claims brought by creditors where there has been a failure to comply with either sections 77 or 78, I am of the view that there is a very good (90%) prospect of successfully obtaining a stay (or some compromise beneficial to the debtor).

(b) claims by the debtor?

13. As stated above, where section 127(3) applies, it can be raised either as a defence to a claim by a creditor, or alternatively a claim can be brought by a debtor for a declaration of unenforceability pursuant to section 142(1)(b). Importantly, however, this is not the case in respect of breaches of sections 77 or 78. Indeed, the power to make a declaration of unenforceability pursuant to section 142 arises only where “a thing can be done by a creditor…on an enforcement order only”. However, whereas improperly executed agreements can only be enforced on such an enforcement order (sections 65(1), 127(1)(a)), there is no such provision in respect of non-compliance with sections 77 and 78; indeed, as stated above, the sanction for such non-compliance is an inability to enforce for so long as the default continues (sections 77(4), 78(6)). As was held in Rankine at paragraph 15[1]:

“Thus the power to make a declaration under section 142(1) exists only in a case where the court could grant an enforcement order. The court cannot do so in a case where a lender has failed to comply with a request made under section 78 and accordingly there is no power to make a declaration in this regard even if the court finds that the defendant did not comply.”

14. In short, therefore, where there has been non-compliance with sections 77 or 78 it will not be possible to issue a claim for a declaration of unenforceability. Accordingly, in the absence of the creditor bringing a claim against the debtor (to which there is, as stated above, an unanswerable defence in the form of a stay), instructing solicitors would need to negotiate a compromise with the creditor under which the creditor agrees to release the outstanding credit.

15. In terms of leverage for reaching such a compromise, there are 3 particular matters of note. First, as advised previously, a failure to comply with sections 77 and 78 for more than a month gives rise to a criminal offence: sections 77(4)(b), 78(6)(b). Second, creditors are required to be licensed under the 1974 Act and in exercising its licensing powers the OFT “may take account of any matter appearing to it to constitute a breach of a requirement made by or under this Act”: section 170(2)[2]. Third, a similar (albeit legally distinct) obligation to disclose is contained in section 7 of the Data Protection Act 1998 and accordingly non-compliance with an appropriate request is likely to create further regulatory difficulties for creditors. In short, therefore, it is hoped that although defaults pursuant to sections 77 and 78 cannot give rise to a cause of action, the criminal and licensing sanctions for continued non-compliance are such as to encourage the creditor to bring the default to an end by release the debtor from his or her outstanding credit.

Claims involving secret commissions

16. While secret commissions undoubtedly give rise to a cause of action, the existence of such a commission will not in itself render the credit agreement unenforceable. In Wilson v Hurstanger Ltd [2007] EWCA Civ 299, for example, the court reimbursed the secret commission itself but otherwise directed that the loan could be enforced.

17. In short, therefore, while where a secret commission can be identified the prospects of success are high (70%), it should be emphasised (for the purposes of both advising the client and also for the drafting of any conditional fee agreement) that such success will be limited to the recovery of the commission and (absent any other factor) will not affect the enforceability of the underlying credit agreement.

Claims involving PPI mis-selling

18. PPI mis-selling may give rise to a discrete cause of action within the consumer credit field. such mis-selling can arise in various different ways, each turning on its own particular facts. Importantly, however, such mis-selling is actionable under the usual principles relating to misrepresentation and negligent (or fraudulent) mis-statement such that, as with secret commissions, the likely relief will be the reimbursement of the PPI premium as opposed to the rendering of the credit agreement otherwise unenforceable. Again, therefore, the above needs to be taken into account both in terms of the advice given to clients and the drafting of any conditional fee agreement.

Questions from debt purchasers who say this cannnot done please put question sin writing stating why they think ethical claims management companies are scam

Now the question arises are all cmc's ethical.... i know the answer to be no.

Many dont have a legal process in place and simply gain the file documents and then hunt around for solicitors, who then have to hunt around for funding and then in turn identify ATE insurance.... many simply take the money, obtain a s78, pretend to audit and delay and delay and then eventually fold the limited liability company and pocket the loose change.

Such unethical practices are as abohrant to me as lenders who pester, hassle and intimidate borrwers for the pursuit of colection of mis sold credit and faulty contracts.

There is a proven and well tested process and over the next few weeks some very big news will be hitting the national press following some 70 cases the first couple of weeks in Feb in central london courts.

yes i do work for a CMC but we have spent 12 months cutting through all of the shill, spin and bull to arrive at the full package, we are not the biggest..... but we will become the most succesful of all very shortly.

It also has to be recognised that claims management is more than just unenforceable, we have instances of people being pursued by lenders and DCA's when the default and account is now statute barred, where interest rates have rocketted to 2330%! and where the client simply did not have the credit in the first place but due to fraud they are being pursued for the repayment. Ethical claims management is not about taking massive up front fees and hiding away for years claiming to be waiting for lenders docs, i get 99.9% of clients docs within the 12 days or 40 days on SAR, the only issues we normally have is where an agreement may have been taken out at a different address or a typo with the name, nothing more.

[dildobaggins]

Re: Momentum Network / CCK

In reply to Amesyt request for a PIL? omn claims management, check thi sout for substaantive law and opion....

(1) Improperly executed agreements to which section 127(3) applies.

(2) Improperly executed agreements to which section 127(3) does not apply.

(3) Breaches of the duty to give information under sections 77 and 78.

(4) Claims involving secret commissions.

(5) Claims involving PPI mis-selling.

Improperly executed agreements to which 127(3) applies

3. In relation to this category of claim, the considerations are as follows:

(1) Was the agreement made before 6 April 2007? If so, section 127(3) may apply; if not, it will not.

(2) Does the agreement comply with section 61(1)(a)? If it does not, section 127(3) prima facie applies; if it does, section 127(3) does not apply.

(3) Does the agreement fall within the proviso to section 127(3), namely, that there is a document signed by the debtor which contains all the prescribed terms. If not, section 127(3) will still apply; if so, it will not.

4. If the analysis of the claim concludes that section 127(3) applies, then the agreement will be unenforceable. This can be raised either as a defence to a claim by a creditor, or alternatively a claim can be brought by a debtor for a declaration of unenforceability pursuant to section 142(1)(b).

5. In my view, claims (or defences, as the case may be) falling within this category would have a very good (90%) prospect of success – the only real risk being that an incorrect analysis of the matters set out in paragraph 3 above takes place.

Improperly executed agreements to which section 127(3) does not apply

6. In respect of improperly executed agreements to which for any reason section 127(3) does not apply, the court has the power to make an enforcement order “if it is just to do so having regard to” various matters including the “prejudice caused by the contravention in question”, the “degree of culpability” and the various powers open to the court.

7. Further, as stated previously, the general practice of the court will be to make such an enforcement order unless it can be shown that the breach in question has caused prejudice to the debtor: Goode’s Consumer Credit: Law and Practice (Volume 2), para 5.247.

8. Such cases would therefore involve a separate analysis of the underlying merits of the debtor’s position, together with the production of substantial and bespoke witness statement evidence. Further, given the highly discretionary nature of the jurisdiction, the outcome of any particular case would be far from predictable (save to say that in the absence of the debtor being able to establish prejudice an enforcement order is likely to be made).

9. This being the case, therefore, I suspect that such cases will not be attractive to instructing solicitors as part of the group scheme now being proposed. In other words, while such cases may have merit, such cases would have to be considered wholly separate to – and outside of – the proposed group actions.

Breaches of the duty to give information under sections 77 and 78


(a) defending claims brought by the creditor

10. As previously advised, section 77 applies to fixed sum credit agreements (such as a credit sale, a hire-purchase agreement, or an independent loan agreement), while section 78 applies to running-account credit agreements (such as a credit card or an overdraft facility). In each case, where the debtor makes the appropriate written request (accompanied by the appropriate fee), the creditor is obliged to provide the debtor with a copy of the executed agreement (together with certain other information) within the prescribed period of 12 days.

11. If then the creditor fails to comply with the above requirement, “he is not entitled, while the default continues, to enforce the agreement”: sections 77(4)(a), 78(6)(a). In short, therefore, where the creditor fails to comply, there is an unanswerable defence to a claim by a creditor. As stated previously, however, that defence is of a temporary nature only, in that if in due course compliance takes place, the creditor is once again entitled to enforce. This being the case, it would appear that the appropriate relief is not the dismissal of the creditor’s claim, but rather a stay: Rankine v American Express Services Europe Ltd (unreported, May 16, 2008), para 16. Of course, in practice, if a creditor is not able to comply prior to trial, it is likely that it will never be able to comply such that the stay is likely to be permanent. Nevertheless, the fact that the relief which would be ordered is likely to be a stay as opposed to a dismissal should be taken into account in the drafting of any conditional fee agreements: it is vital that the definition of success should include the granting of a stay.

12. With this in mind, in respect of claims brought by creditors where there has been a failure to comply with either sections 77 or 78, I am of the view that there is a very good (90%) prospect of successfully obtaining a stay (or some compromise beneficial to the debtor).

(b) claims by the debtor?

13. As stated above, where section 127(3) applies, it can be raised either as a defence to a claim by a creditor, or alternatively a claim can be brought by a debtor for a declaration of unenforceability pursuant to section 142(1)(b). Importantly, however, this is not the case in respect of breaches of sections 77 or 78. Indeed, the power to make a declaration of unenforceability pursuant to section 142 arises only where “a thing can be done by a creditor…on an enforcement order only”. However, whereas improperly executed agreements can only be enforced on such an enforcement order (sections 65(1), 127(1)(a)), there is no such provision in respect of non-compliance with sections 77 and 78; indeed, as stated above, the sanction for such non-compliance is an inability to enforce for so long as the default continues (sections 77(4), 78(6)). As was held in Rankine at paragraph 15[1]:

“Thus the power to make a declaration under section 142(1) exists only in a case where the court could grant an enforcement order. The court cannot do so in a case where a lender has failed to comply with a request made under section 78 and accordingly there is no power to make a declaration in this regard even if the court finds that the defendant did not comply.”

14. In short, therefore, where there has been non-compliance with sections 77 or 78 it will not be possible to issue a claim for a declaration of unenforceability. Accordingly, in the absence of the creditor bringing a claim against the debtor (to which there is, as stated above, an unanswerable defence in the form of a stay), instructing solicitors would need to negotiate a compromise with the creditor under which the creditor agrees to release the outstanding credit.

15. In terms of leverage for reaching such a compromise, there are 3 particular matters of note. First, as advised previously, a failure to comply with sections 77 and 78 for more than a month gives rise to a criminal offence: sections 77(4)(b), 78(6)(b). Second, creditors are required to be licensed under the 1974 Act and in exercising its licensing powers the OFT “may take account of any matter appearing to it to constitute a breach of a requirement made by or under this Act”: section 170(2)[2]. Third, a similar (albeit legally distinct) obligation to disclose is contained in section 7 of the Data Protection Act 1998 and accordingly non-compliance with an appropriate request is likely to create further regulatory difficulties for creditors. In short, therefore, it is hoped that although defaults pursuant to sections 77 and 78 cannot give rise to a cause of action, the criminal and licensing sanctions for continued non-compliance are such as to encourage the creditor to bring the default to an end by release the debtor from his or her outstanding credit.

Claims involving secret commissions

16. While secret commissions undoubtedly give rise to a cause of action, the existence of such a commission will not in itself render the credit agreement unenforceable. In Wilson v Hurstanger Ltd [2007] EWCA Civ 299, for example, the court reimbursed the secret commission itself but otherwise directed that the loan could be enforced.

17. In short, therefore, while where a secret commission can be identified the prospects of success are high (70%), it should be emphasised (for the purposes of both advising the client and also for the drafting of any conditional fee agreement) that such success will be limited to the recovery of the commission and (absent any other factor) will not affect the enforceability of the underlying credit agreement.

Claims involving PPI mis-selling

18. PPI mis-selling may give rise to a discrete cause of action within the consumer credit field. such mis-selling can arise in various different ways, each turning on its own particular facts. Importantly, however, such mis-selling is actionable under the usual principles relating to misrepresentation and negligent (or fraudulent) mis-statement such that, as with secret commissions, the likely relief will be the reimbursement of the PPI premium as opposed to the rendering of the credit agreement otherwise unenforceable. Again, therefore, the above needs to be taken into account both in terms of the advice given to clients and the drafting of any conditional fee agreement.

Questions from debt purchasers who say this cannnot done please put question sin writing stating why they think ethical claims management companies are scam

Now the question arises are all cmc's ethical.... i know the answer to be no.

Many dont have a legal process in place and simply gain the file documents and then hunt around for solicitors, who then have to hunt around for funding and then in turn identify ATE insurance.... many simply take the money, obtain a s78, pretend to audit and delay and delay and then eventually fold the limited liability company and pocket the loose change.

Such unethical practices are as abohrant to me as lenders who pester, hassle and intimidate borrwers for the pursuit of colection of mis sold credit and faulty contracts.

There is a proven and well tested process and over the next few weeks some very big news will be hitting the national press following some 70 cases the first couple of weeks in Feb in central london courts.

yes i do work for a CMC but we have spent 12 months cutting through all of the shill, spin and bull to arrive at the full package, we are not the biggest..... but we will become the most succesful of all very shortly.

It also has to be recognised that claims management is more than just unenforceable, we have instances of people being pursued by lenders and DCA's when the default and account is now statute barred, where interest rates have rocketted to 2330%! and where the client simply did not have the credit in the first place but due to fraud they are being pursued for the repayment. Ethical claims management is not about taking massive up front fees and hiding away for years claiming to be waiting for lenders docs, i get 99.9% of clients docs within the 12 days or 40 days on SAR, the only issues we normally have is where an agreement may have been taken out at a different address or a typo with the name, nothing more.

Thanks for clearing things up David, it makes much more sense now!
All these sub sections are quite immense!

[Amethyst]

Re: Momentum Network / CCK

Thank you so much David, thats brilliant.

The only part I'm not sure on is CMCs taking non defaulted credit card debt companies to court for a declaration of unenforceability under 142 -

or alternatively a claim can be brought by a debtor for a declaration of unenforceability pursuant to section 142(1)(b).

. I presume if you threaten card companies with this they negotiate to write off the debt to stop a precedent. I don't recall any claims bought by a consumer solely for a declaration being successful in court - but happy to be corrected with case law

[Yoda]

Re: Momentum Network / CCK

Thank you so much David, thats brilliant.

The only part I'm not sure on is CMCs taking non defaulted credit card debt companies to court for a declaration of unenforceability under 142 - . I presume if you threaten card companies with this they negotiate to write off the debt to stop a precedent. I don't recall any claims bought by a consumer solely for a declaration being successful in court - but happy to be corrected with case law

A declaration under s142 cannot be made by a debtor who is the claimant, only if they are the defendant,thus providing the court the power to grant an enforcement order.
From the Rankine case;

Section 142(1) of the Act provides as follows:

Where under any

provisionof this Act a thing can be done by a creditor or owner on

an enforcement order

only. and either —

(a) the court dismisses (except on technical grounds only) an application for an

enforcement order,

or

(b) where no Such application has been made or such an application has been dismissed on technical grounds only, an interested party applies to the court for a declaration under this subsection,
the court may if it thinks just make a declaration that the creditor or owner is not entitled to do that thing, and thereafter no application for an enforcement order in respect of it shall be entertained”

15. Thus the power to make a declaration under section 142(1) exists only in a case where the court could grant an enforcement order. The court cannot do so in a case where a

lender has failed to comply with a request made under section 78 and accordingly

there is no power to make a declaration in this regard even if the Court finds that the Defendant did not comply.

------------------------------- merged -------------------------------
A declaration was successfully made in the HBOS v Mitchell case in June, but that was only because the debtor was the defendant and the lender withdrew their claim.

The thing that puzzles me is;
The agreement was devoid of any prescribed terms ( admitted by the lenders counsel) so this would make it unenforceable by virtue of s60 & s61.

S127 precludes the court from enforcing it, so how the hell did they allow a declaration under s142??

[amsfs]

Re: Momentum Network / CCK

David Jack's consistently abusive language on the scam.com forum has resulted in:

Lib Dem candidate resigns over racist email - Ch4 News

Lib Dem candidate quits in e-mail race row - BBC

About time too, anyone using such abusive language and threatenig behaviour consistently on a public forum needs pulling to one side for a chat by the authorities.

His excuse.....I was "sloshed" - must have been sloshed every night in that case.