lexis keep it business like. comments like how dare you should be avoided.

there must be more of us out there who have been on thereceiving end of interest rate rises. Consider this and add your support: Contract law is and should be concerned solely with the issue of compensating loss between the parties. The issue of penalising, or put more simply, punishing parties is the exclusive reserve of criminal law. The arguments are all the more compelling in consumer contracts where the law is expected to provide the consumer with protection. Furthermore, where the rules of common law and equity conflict, equity prevails. In April 2007 the OFT issued a report titled “Unfair Contracts Terms Guidance – Consultation on revised guidance for the Unfair Terms in Consumer Contracts Regulations 1999” [exhibit ***]. Relevant sections from this report are quoted as follows; Section 5.8 - Disguised penalties Objections under the Regulations to an unfair financial penalty can apply to any term which requires excessive payment in the event of early termination, or for doing anything else that the supplier has an interest in deterring the consumer from doing. The Regulations are concerned with the intention and effects of terms, not just their mechanism. If a term has the effect of an unfair penalty, it will be regarded as such, and not as a 'core term'. Thus a penalty cannot be made fair by transforming it into provision requiring payment of a fee for exercising a contractual option. Section 18 1.3 These objections are less likely to arise if a term is specific as to what must be paid and in what circumstances. In that case, it may be considered a 'core' term and exempt from consideration for fairness provided it is in clear language and properly drawn to consumers' attention – see Part IV, paragraph 19.12. (But note that this may not hold good if it is a 'disguised penalty', that is, a term calculated to make consumers pay excessively for doing something that would normally be a breach of contract. Regulation 7(2) of the Unfair Terms in Consumer Contract Regulations 1999: which provides if there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer will prevail. Application of the contra proferentem rule would also incline to such a result.

got response back from marbles.....re credit worthiness they said they have checked it as they are a responsible lender....despite my asking them to produce evidence to verify have carried out appropriate checks....thats like me saying your cheque is in the post and them asking me to corroberate this and me saying i sent it....them saying prove it..me saying i am telling you i sent it so it must be true!

sorry to confuse...they are fabricating something retrospectively. i.e. i could pockle the agreement and insert 0% APR for 25 years!!

count me in. i'm going to do it by the close of business today.

Please leave a post denoting your support and/or if you have been a victim of a creditor increasing the APR significantly. Please read below where i will attempt to set the scene! Firstly terms which relate to variations in the APR are not core terms since it does not relate to the adequacy of the original price. Therefore action can be taken persuant to Part 8 of the Enterprise Act. Paragraph 10 of the consumer credit (agreement)regulations 1983 stipulates creditors must include the circumstances in which any variation to the APR may occur and this should be included in the original terms and conditions sent to the debtor for signing. Sound fair, sound reasonable and easily understood! Most credit agreements I have seen go along the lines of MBNA in this case: We may decide to change any of the terms of this agreement, including interest rates, fees and charges or introduce new terms. If the change benefits you (like that will happen) we will do it immediately and tell you within 30 days. Otherwise we will tell you at least 14 days before any increase in interest rates at least 30 days before any other change. and we may vary interest rates or fees at our discretion at any time. In particular we may vary the interest rate and the APR depending on our assesment of your circumstances and conduct of the account from time to time. In my opinion there are ommissions and misrepresentations as they fail to highlight the purpose, form, nature and long term implications of paying late or going over the credit limit. See Fraud Act 2006 They should also provide estimates of what the rates could increase to. They should check to see if you can afford the increased payments. With this in mind the increase in APR as a result of account conduct is a penalty. MBNA admitted they increase the APR following late payments/going over the limit in one of their letters to me!! It is a penalty by stealth and I think there are a lot of people out there similar to me experiencing huge hikes in the APR following the conduct on their account. They cannot penalise us twice. This type of penalty is much more significant than the late charges if it continues over a period of time. The more support then the more likely OFT will take this up with the creditors. I intend to do this depending on the response out there!!

My understanding is that if any of the prescribed terms are missing or incorrect then the agreement is wholly unenforceable and to which section 60 (1) a and 127 (3) of the consumer credit act 1974 refers. So if the APR and how you are to discharge your debt is missing or incorrect then it is unenforceable?? (yes me thinks) on some of the agreemnts/applications ( whether both are executed agreements is an issue i would like some clarity) i have, the rate of interest tucked in with the rest of the prescribed terms (under heading of key financial information) is different to that contained in 'other financial information'. I believe the interest contained in the prescribed terms is effective interest but the interest rate in 'other key financial information' is simple. I think effective rate of interest includes fees, if applicable, and any charges applied over a period of time against a quota of their customers. i.e. an average APR wrapping up fees and charges. Since this is parked next to the other prescribed terms I am assuming this is the rate of interest in the context of schedule 6 paragraph 4 of the consumer credit agreement regs 1983. This rate of interest does not tie in with how i discharge the debt (which is another prescribed term) i.e. debt plus total charge for credit divided by 12. My angle is that the effective and simple APR's are contradictory and confusing. In my opinion the rate of interest is the APR which is parked next to the other prescribed terms. (for the purposes of schedule 6) With this in mind every agreement i have has the manner in which i discharge the debt stated incorrectly and outwith the tolerances in schedule 7 of the consumer credit (agreement) regs 1983. The big question is: The APR stated in 'other finacial information' does tie in with how the debt is to be discharged. So which takes precedence? Why do they have different interest rates? I have seen nothing on my searches/reading regarding this issue. Please help!!

Mmmmm...it looks as if it is an enforceable agreement apart from th efact it is not signed (or is it blanked out??). The only other option is to check if they have calculated how you are to discharge your debt, properly. If it is incorrect then the debt is not enforceable. There are plenty of calculators out there. There are also tolerances they must operate within regarding the stated APR. This is schedule 7 of the consumer credit (agreement) regs 1983. I am not sure about simple and effective APR's. Maybe someone else could advise on this. It is worth checking this as they are known to get it wrong and if it is wrong and outwith tolerance then the agreement is not enforceable.

looking at it logically. there are two parts here. The prescribed terms (sechedule 6 and 7 of Consumer Credit (Agreement) Regs) and the terms and conditions which is schedule 1 of the same regs. I think it would be very difficult to pockle a document containing the prescribed terms with the creditors and debtors signature on it. I would very much doubt a judge would accept this as at the end of the day you could stick joe bloggs in and claim he owes 10 grand! Use of reconstituted terms and conditions (schedule 1) is more likely as they could say here are our standard terms and conditions from 98. i.e. when mt bloggs was given the loan. Would you agree?

nice thread folks. Darset What is the leeway regarding reconstituted executed agreements you refer to in post no 4. I suspect i may get something like this from MBNA (return of section 78 request due 5/10/08) as my account was opened in 98. Any advice/experiences would be appreciated.

I have also been in touch with the FOS and I have explained the particulars of the case. They seem to think there is a legitimate arguement. After all section 19 of the Consumer Credit (Agreement) regs 1983 says they must state the circumstances and time which any variation occurs in the original agreement. Obviously it does not state we will increase the APR to 34.9% from 18.9% if you have several late payments/over credit limit. They do state We may decide to change any of the terms of this agreement, including rates, fees and charges or introduce new terms. If the change benefits you we will contact you within 14 days blah blah blah. Does it state the circumstances? Does it state when? Does it state how much? Its pretty open ended and open to exploitation. OFT have also stated if the APR is to change following a certain event, then if the creditor does not know the rate or the rate cannot be ascertained then they should use estimated information based on reasonable assumptions. Put OFT 786a into google. It is an eexcellent document which was drafted as an idiots guide for creditors follow the consumer credit act 2006. Give it a read it is very good!!

hi marlowe 52. APR's are normally core terms and not accessable under UTCCR's 1999. Term for variations in the APR is not a core term and to which OFT 786a paragraph 4.18 refers. So this could look into the matter with respect to UTCCR's!!

is the failure to disclose these penalties not fraud? See Fraud Act 2006!!

gill5blue you need to bring things to a head. Look at the Fraud Act 2006. This prevents a person from making money from misrepresenting or failing to disclose information. With this in mind you could counter claim and ask for all of the interest you have paid over the years. This way you are in a better position to negotiate. The secret to negotiation is that both parties need to feel as if they are gaining something.

sorry, my secretary isn't in yet and i am no techno whizz. I will post letter later today however the quote from MBNA verbatum: We regularly review interest rates and, as a result of the reviews, adjust the rates on certain accounts. The factors we consider in this review include the way in which an account has been managed over a period of time. i.e. the number of late payments and over limit fees on an account. We also consider information provided by external credit bureaux. All we are asking that this type of statement should be contained in the terms and conditions. But wait a minute....they cant do that because they already have a term in there which states they will charge you £25 EVERY TIME YOU ARE LATE AND £25 EVERY TIME YOU EXCEED THE CREDIT LIMIT. In accountancy this is known as 'double dunting.' Pparagraph 10 of Schedule 1 of the Consumer Credit (Agreement) Regulations 19 provides inter alia: ‘ where more than one rate applies, all the rates in all cases quoted on a per annum basis with details of when each rate applies’ I should have been provided with a statement within the terms of the agreement indicating the circumstances in which the APR would increase. i.e. if I go over the credit limit or my payments are late then I could expect the APR would increase to X%. This term should have been presented at the time the document referred to in section 61 (1) of the Consumer Credit Act 1974 was sent to me for signing. The consumer credit act 2006 introduced the assessment of unfair conditions and/or business practices to determine if an unfair relationship exists between creditor and debtor. Part 8 of the Enterprise Act 2002 can then be enforced if an unfair relationship exists. Some examples of improper business practices are: using false or misleading statements in order to induce consumers to enter into a contract • hiding important details about credit deals in the small print • requiring consumers to sign credit agreements that are not easily legible and are difficult to understand • failing to comply with the requirements of the Act or the regulations on advertising and agreements • failing to perform contractual obligations to consumers, or to give any or adequate redress when in breach of duty to consumers • marketing or targeting loans explicitly at consumers in debt • using unacceptably high-pressure selling techniques or engaging in other aggressive commercial practices • misrepresenting the form, nature, purpose or long-term implications of loan agreements. Let me know what you think.