C.O.'s Being Issued On Unsecured Debt.

[renegotiation]

Would there be any mileage in trying to invoke sections 140A-C (the new Unfair Relationships provisions)?

 

As far as I know, these are untested yet but thinking it through from the provisions themselves and such guidance as there is, it strikes me that there would be scope for arguing that the interest rate should be reduced (perhaps even retrospectively) to reflect the security being sought.

 

Any thoughts on that?

 

I don't know enough to comment on that.

 

 

However, an application made at half cock against a random creditor would do more harm than good.

 

As a last resort and on principle I was willing to do that. I do accept it may well have been fruitless. I don't see how it would have done any more harm than good though. In any event, best forget that angle for now.

 

 

There have been other contributions to this thread and the above comments, though respected, don't address all the issues raised. I still think it would be good if a mod/mods made some comments. Even if the case lost it might still get some media attention. I am still of the 'unqualified legal opinion', funny as that might sound, that this might succeed.

[renegotiation]

As an aside I complained to the ASA about the advert (or similar) mentioned above and they were very much of the opinion that there was no problem at all.

 

Have you still got their official response to post up for us? I was going to make a complaint to the ASA too. I am quite surprised by the response you say you got from them to be honest.

[renegotiation]

Hi, I'm not a mod but I do have some experience of charging orders, having had 2 discharged. I also set up a petition on the No.10 website which finished last month with a little over 300 signatures (would have been a lot less if it wasn't for Maz).

 

Congratulations on that. Can you resurrect the petition?

 

Whatever ones opinion of the subject of charging orders, what you can't avoid is that the creditors ability to obtain a charging order is set down in law. The Courts, Tribunials and Enforcements Act which has not been made law yet will actually make it possible to obtain a charging order on unsecured debt with a default on a CCJ. This is a step to far in many peoples opinions.

 

I thought that was the status quo?

[underdog13]

I don't know enough to comment on that.

 

Me neither, Renegotiation - sorry about that. The quote was from Viscount Stair, a qualified lawyer; who knows a great deal more than I, that's why I asked him.

 

 

 

 

As a last resort and on principle I was willing to do that. I do accept it may well have been fruitless. I don't see how it would have done any more harm than good though. In any event, best forget that angle for now.

 

I think Viscount Stair was just thinking of your own protection there

There have been other contributions to this thread and the above comments, though respected, don't address all the issues raised. I still think it would be good if a mod/mods made some comments. Even if the case lost it might still get some media attention. I am still of the 'unqualified legal opinion', funny as that might sound, that this might succeed.

 

Totally agree with you about media exposure, Renegotiation - look at the recent hoo-har over Ross/Brand - people should be getting whipped up over something that is actually important.

[renegotiation]

Totally agree with you about media exposure, Renegotiation - look at the recent hoo-har over Ross/Brand - people should be getting whipped up over something that is actually important.

 

I quite agree. I digress a little, but I think that Ross/Brand affair was a little contrived. I think they ****ed off the wrong people before they said anything about Andrew Sachs. It was then used against them. That's my view anyway. Best not bang on about that here though. :lol:

[underdog13]

I think you might just be right there; it did seem rather contrived - couldn't believe it when it was the lead story on the 6 o' clock news; the global financial system is going into meltdown, there are wars all over the place, mass starvation, but hey-ho, nothing takes precedent over celebrities:confused: Oh dear, does that little rant mean I am getting old? I've started shouting at the tv, too:D

[FunkyFox]

Congratulations on that. Can you resurrect the petition?

 

I beleive there is another one running. I am awaiting a response from the government and am shortly writing to Mr Brown himslef on this very subject. It was commented on in PM questions on 29th October. Lets see what he has to say.

 

I thought that was the status quo?

 

I don't know what you mean by that comment sorry!

 

Have you still got their official response to post up for us? I was going to make a complaint to the ASA too. I am quite surprised by the response you say you got from them to be honest.

 

I don't think I kept their response. TBH I think I chucked it in disgust, but as I mentioned before, I wan't about to start another battle I believed was fruitless. From memory it was May this year and the advert was Lombard and they said specifically '...and don't worry it wont be secured on your property' which was the bit that got right up my nose. The ASA were seriously not interested though thats for sure. I may be able to ask for a copy if you really want me to.

 

Totally agree with you about media exposure, Renegotiation - look at the recent hoo-har over Ross/Brand - people should be getting whipped up over something that is actually important.

 

A comlpletely different set of circumstances. I'm afraid the public at large just do not care enough about charging orders and the like to be even mildly stirred. The petition was featured on here, Moneysaving expert and Penalty Charges. It got 300+ signatures and this is supposed to be the key target audience for that kind of thing. It ran for 6 months - it got less than 2 sigs per day!!!

 

As for the use of CPUTR that cannot succeed IMHO. The unfair trading regs refer to the contract you have with the supplier/creditor etc not the law upon which that contract is based. You cannot challenge the law (using CPUTR) only the contract and actions of the other party. A charging order is simply a wholey lawful way of enforcing a contract, once the contract has been subject to a judgment and is effectively at an end anyway.

 

You can't ask a judge to delcare that a charging order which has not yet been applied for on a contract that has not been judged upon or a claim even brought is in any way unlawful.

 

You say you think you can succeed, but you don't say in any detail what your approach is etc. If you could be more specific then perhaps people could judge the merits of you proposed action.

[renegotiation]

Whatever ones opinion of the subject of charging orders, what you can't avoid is that the creditors ability to obtain a charging order is set down in law. The Courts, Tribunials and Enforcements Act which has not been made law yet will actually make it possible to obtain a charging order on unsecured debt with a default on a CCJ. This is a step to far in many peoples opinions.

 

I thought that was pretty much the way things were now is what I mean?

 

 

 

No worries on getting a copy of the ASA verdict if its too much trouble. I'm just stunned creditors can still this advertise their wares as 'unsecured' in this current climate! I saw a Lombard Direct advert only the other week! If 'unsecured' don't mean S*** they shouldn't F****** stick it in their ads and I will press the ASA myself on this.

 

 

 

As for the defence I would use in court 'IN A NUTSHELL' I would say this:

 

'Judge, this debt was taken out by myself as 'unsecured' debt. I maintain that I would have seriously thought twice about taking out this debt if I ever thought it would put my home in jeopardy. This industry makes a clear distinction in its advertising of credit as either 'secured' or 'unsecured'. I assert that if creditors go to such lengths to make such a distinction in their adverts they must be bound by it. I put it to you that a C.O./Order For Sale should not be issued on this debt. I can realistically afford to pay £x on this debt per month (*regardless of how small*) and I have furnished you with a breakdown of my earnings.'

 

 

Doesn't advertising form part of a contract taken out based on that advertising? *If so*, that should override the C.C.J. to C.O. to Order For Sale pathway shouldn't it? I am not against money being taken direct from people's earnings or bailiffs taking non-essential goods from people on defaulted C.C.J.'s as an absolute last resort. I am dead against people losing their homes though to forced Orders For Sale though.

[FunkyFox]

Originally Posted by FunkyFox

Whatever ones opinion of the subject of charging orders, what you can't avoid is that the creditors ability to obtain a charging order is set down in law. The Courts, Tribunials and Enforcements Act which has not been made law yet will actually make it possible to obtain a charging order on unsecured debt with a default on a CCJ. This is a step to far in many peoples opinions.

I thought that was pretty much the way things were now is what I mean?

 

Sorry I meant to say WITHOUT a default on a CCJ. Sorry about the typo.

 

What you are presenting above is in effect a moral argument (which I broadly agree with) but it is not something which a Judge can base his judgment on. Also you mentioned setting a precedent. Judgments in the County Court do not set precedent, you would have to go to a much higher court to do so, by which time, whatever financial house you chose to take on will have thrown their full legal weight behind. Take note of the £100k of costs the Rankines ended up with trying to prove a point.

 

I mention again, a charging order is an enforcement action on an agreement that has ended. You cannot defend a Charging Order, only the claim that preceeded it. You cannot use an arguement that a Charging Order is unlawful as a basis for a defence against a claim as the enforcement action cannot start until the judgment is made and then defaulted upon.

 

If others have previously given you advice that this cannot succeed and you are getting similar advice now, why not save yourself a whole load of pain, effort and costs.

[angel_1]

hiya all

 

thanks for the mention Funky Fox, ref adding my voice to the petition, yeah but i still am amazed we didnt do better, but i think there is another petition up at no 10 that runs until next june 09 i will find the info on here or on mse,

 

i agree totally, that we must try and address all we can that we find wrong, but i read somewhere i think was it the independent?? that Mr Cameron has raised this firmly to the government, so something is being highlighted,

 

whether it helps in this climate and until then, we just have to use the law to help ourselves as best as we can

 

i supported Funky Fox petition and yet tried all sorts discussed it offline too, but so many people in this country just dont get passionate about a cause enough to make a difference,

 

maybe its sad to say but once people get into the postitions we are in now, maybe things like this become more important and relevant

 

i wish you luck, and i will help in any way i can

 

ciao for now MAZ

[renegotiation]

What you are presenting above is in effect a moral argument (which I broadly agree with) but it is not something which a Judge can base his judgment on.

 

I find it impossible to believe that a product can be advertised in a 'black and white' fashion and down the line a key component of that package can just disappear with no legal comeback. So along with all the moral arguments there surely must be one legal argument here. Someone tell me this isn't so if it really isn't so! I would probably expire where I am sitting. If I see an advert for a car on TV and I buy it and later find out it has a different engine I can do something about that as far as I know. That's EXACTLY the same principle in my eyes. I believe it's called misselling. Is it or isn't it?

 

 

Also you mentioned setting a precedent. Judgments in the County Court do not set precedent, you would have to go to a much higher court to do so, by which time, whatever financial house you chose to take on will have thrown their full legal weight behind. Take note of the £100k of costs the Rankines ended up with trying to prove a point.

 

Ok. No technical legal precedent then. If a case was won it would show it was possible and the arguments used could be used in other cases. Still a great success. As I said earlier, I have ditched the idea of taking on a random bank myself. I would look for a case about to be defended where someone has nothing to lose. If someone is going to present a defence anyway this would just be an extra angle right? So no costs issue right?

 

Interesting you mention the Rankines, though as i said I have ditched that line of thought, some people said they lost to a moral argument... I am not making that statement to add weight to my argument and don't want any discussion on that. Just an interesting observation.

 

I mention again, a charging order is an enforcement action on an agreement that has ended. You cannot defend a Charging Order, only the claim that preceeded it. You cannot use an arguement that a Charging Order is unlawful as a basis for a defence against a claim as the enforcement action cannot start until the judgment is made and then defaulted upon.

 

Ok. I get the message. Logically, I would imagine that a Judge would allow enforcement that doesn't 'secure' the debt on property and disallow enforcement that does. It seems that the debt actually becomes 'secured' on the original CCJ then. It has to become 'secured' somewhere down the line! From the original advert to a C.O. or Order For Sale being issued something has *CHANGED*. My defence would have to be entered when a C.C.J. is first applied for then. That would be the lawful way to do it right?

 

 

If others have previously given you advice that this cannot succeed and you are getting similar advice now, why not save yourself a whole load of pain, effort and costs.

 

If there is 'nothing to lose' it is worth exploring in my eyes. I have a big, thick head, but I don't think i'm being arrogant in this instance. This is tremendously important. I appreciate the dialogue.

[FunkyFox]

If there is 'nothing to lose' it is worth exploring in my eyes. I have a big, thick head, but I don't think i'm being arrogant in this instance. This is tremendously important. I appreciate the dialogue.

 

There is always nothing to lose if you are playing with someone elses money. And I agree 100%, this is very important.

 

I don't think you are being arrogant. You have just allowed your feelings about what you think is right and wrong to become mixed up with what is the law and what it is possible to do to defend a claim. Remember the law and justice are not the same things.

 

Somehow you have to get your head around the fact that when a claim is brought you cannot defend on the basis of the rights and wrongs of what enforcement action MAY be taken by the claimant if the CCJ is defaulted on.

 

Whatever you decide, best of luck.

[renegotiation]

There is always nothing to lose if you are playing with someone elses money. And I agree 100%, this is very important.

 

If someone is defending a C.C.J. 'anyway' and my defence is used as an extra angle is that 'playing with someone elses money'? A Judge would indicate what arguments he had accepted in his verdict wouldn't he? I would appreciate a firm answer on these points.

 

I don't think you are being arrogant. You have just allowed your feelings about what you think is right and wrong to become mixed up with what is the law and what it is possible to do to defend a claim. Remember the law and justice are not the same things.

 

You have ignored the legal argument I have made in my first point in my previous post. Do you have any comments on that or not? I am actually beginning to think that this could lose on moral, not legal, grounds as if the C.C.J. had to be defended from the off, and not subsequent enforceement by way of a C.O./Order For Sale, it would be seen as too damaging to the system.

 

Somehow you have to get your head around the fact that when a claim is brought you cannot defend on the basis of the rights and wrongs of what enforcement action MAY be taken by the claimant if the CCJ is defaulted on.

 

I would simply argue that the C.C.J. itself, if open to further enforcement by C.O.'s/Orders For Sale, 'secures' the debt. I don't think I am engaging in any frivolous word play here.

 

Whatever you decide, best of luck.

 

I can't decide until I get some further feedback on, at the least, the main issue I have raised. Has the product been missold or not?

 

Cheers for the replies FF.

[FunkyFox]

You take out contract regulated by the CCA ----- You default on payment-----Creditor issues a claim based upon that contract and the CCA-----At this point the creditor is not seeking to enforce a judgment, they are seeking to obtain a judgment-----judgment in favour of the claimant, contract is at an end-----you fail to adhere to terms of the judgment----claimant seeks enforcement of the judgment (not the contract) by securing the judgment against your property.

 

Thats how I understand it and thats why I think your idea is doomed to fail. You can wait for further input but I don't think it will tell you anything different. To be fair you have already been told this before here http://www.consumeractiongroup.co.uk/forum/legal-issues/145462-has-application-form-ever.html#post1538393 so third time luck maybe

 

I am waiting on a copy via email of the ASA complaint I made so I will post that when it arrives.

 

All the best.FF

[renegotiation]

You take out contract regulated by the CCA ----- You default on payment-----Creditor issues a claim based upon that contract and the CCA-----At this point the creditor is not seeking to enforce a judgment, they are seeking to obtain a judgment-----judgment in favour of the claimant, contract is at an end-----you fail to adhere to terms of the judgment----claimant seeks enforcement of the judgment (not the contract) by securing the judgment against your property

 

I knew all that, bar some misunderstanding on the issue of the C.O. as an 'enforcement' of the C.C.J. itself. I accept that is the discourse of the status quo. So, no confusion here then.

 

To be fair you have already been told this before here http://www.consumeractiongroup.co.uk/forum/legal-issues/145462-has-application-form-ever.html#post1538393 so third time luck maybe

 

I was unaware of forced Orders For Sale at that time or I would have pushed the issue then. Granted, I could have been more proactive by digging up that thread.

 

I am waiting on a copy via email of the ASA complaint I made so I will post that when it arrives.

 

You mean their verdict I take it. I look forward to seeing that. Thanks.

 

 

 

 

Right, forget everything else discussed and please answer this question. Are you of the opinion that creditors have done nothing ***ILLEGAL*** by appearing on TV bold as brass and advertising credit as 'unsecured' when in fact it simply isn't the case?

[FunkyFox]

ASA complaint and verdict....

 

I wrote through their online system.

 

This advert is for an unsecured loan. During the advert the specific claim that " ... don't worry the loan won't be secured against your property..." is made.

Increasingly lenders are using a charging order to secure an unsecured debt (loans and credit cards) against a persons home in the event that they are unable to meet payments.

 

The lender can also force the sale of the persons home to recover the debt from equity in the sale. Changes coming into effect later this year will make this process even easier for lenders.

 

There has been a massive increase in the number of charging orders being applied for over the last 18 months as lenders seek to balance their books as a result of the 'credit crunch'. It is therefore not acceptable for a lender to say that a charging order is used as a last resort. In reality charging orders are often threatened at the very begining of a recovery process and will be the only course of action a lender will take for recovery if the borrower is a home owner.

 

For a consumer to be aware of the use of charging orders they would have to be either involved in the industry or have been subject to one themselves. It is not realistic to expect the average consumer to know about charging orders.

 

Contrary to your policy, I quote; '(3) Even if everything stated is literally true, an advertisement may still mislead if it conceals significant facts or creates a false impression of relevant aspects of the product or service.' It is therefore completely misleading for an advert to make such an explict statement about the product when it is clearly not the case and the statement is designed to re-assure homeowners that there property will not be at risk by taking out an unsecured loan.

 

There is at least 1 other advert at the current time making exactly the same claim.

 

Ideally I would like to see all adverts for unsecured credit cards or loans to feature the same warnings as on secured products, i.e. 'Your home may be at risk if you do not keep up repayments on loans...etc etc'.

 

Your prompt attention on this is much appreciated.

 

Regards, Funky Fox

 

They replied....

 

Dear Mr Funky Fox

 

ROYAL BANK OF SCOTLAND / LOMBARD DIRECT

 

Thank you for contacting the Advertising Standards Authority. Please accept my apologies for the delay in contacting you. We have considered your complaint and the ad in question but have decided that we don’t have grounds for further action under your [sic] Code.

 

One of the selling points of the advertised loan is that it is not secured against a customer’s home. We are satisfied that this is a genuine condition of sale that is integral to the product on offer and that loans are not secured in this way as a matter of course. I take your point that the advertisers have omitted the fact that they have recourse to charging orders in should the borrower fail to repay the loan. However, this is not the same thing as the loan being secured against the value of their homes from the outset.

 

When considering complaints about TV ads our concern is with how the ad will be understood by those who see it. Due to the brevity of TV ads we would not expect them to include every condition of the offer, particularly in ads for something as complicated as a financial product. We would only require that the most significant facets of the product be made clear and would expect viewers to do their own research into the finer details. Lenders have a number of methods to retrieve their money in the case of unpaid debts at their disposal and we think that consumers would understand this and, if concerned, would make enquiries about these. Given this, we don’t consider it necessary for the advertisers to give details of their debt recovery strategies in the ad.

 

Thank you for taking the time to contact us. I am sorry that we are unable to help you on this occasion but I hope that you will find this information helpful.

 

Yours sincerely

 

 

xx

Complaints Executive

[renegotiation]

Well, I don't think I could have put forward the case any better than you did. I think the response of the ASA is a load of rubbish. I take issue with their following statement:

 

'However, this is not the same thing as the loan being secured against the value of their homes from the outset.'

Absolute nonsense. It's exactly the same thing. And then they say:

'Due to the brevity of TV ads we would not expect them to include every condition of the offer, particularly in ads for something as complicated as a financial product.'

Again, complete garbage. The creditor has 'unnecessarily included' in the ad a feature of the credit that is actually false! They could have said this credit IS ultimately 'secured' on your home, but chose to do the opposite! These points have made have nothing to do with the brevity of the ad whatsoever. So what do we do? We going to accept that from some dimwit at the ASA?

[renegotiation]

Funkyfox, can you answer this please? For me, a lot hinges on this.

 

Are you of the opinion that creditors have done nothing ***ILLEGAL*** by appearing on TV bold as brass and advertising credit as 'unsecured' when in fact it simply isn't the case?

[FunkyFox]

Funkyfox, can you answer this please? For me, a lot hinges on this.

 

Are you of the opinion that creditors have done nothing ***ILLEGAL*** by appearing on TV bold as brass and advertising credit as 'unsecured' when in fact it simply isn't the case?

 

Do I think they have done anything ILLEGAL? No.

 

Do I think it is misleading or with holding the whole picture? Yes

 

Do I think homeowners should be made aware of the full implications of defaulting on unsecured debt? Yes

 

Do I think the ASA response is very weak? Yes

 

Once again, the credit is unsecured, it is the process of enforcement once the agreement has been broken that allows a creditor to look to the equity that may exist in someones property to recover what they are owed.

[renegotiation]

Do I think they have done anything ILLEGAL? No.

 

Well, that absolutely stuns me. I can't say you are wrong and I dare say you are 100% sure you are right. You have answered my question as best you can and I appreciate that. I will have a look into that myself. If I do find 'something' where I can get my foot in the door I am going to hopefully force the door open. It's like getting from A to Z with nothing in between the way things seem to be at the moment!

 

 

 

Do I think the ASA response is very weak? Yes.

 

As I said, you put your case very well in my opinion. I'm going to put forward my own case, no different to yours, as that is the hoop I will probably have to jump through to get to the stage where I can question their response.

 

I think it can only be good to engage with someone, even if you think they are wrong, and I appreciate the debate.

 

Thank you.

[FunkyFox]

There are only so many ways that one can explain this. I don't think it is illegal because the credit IS unsecured but I do think it is wrong for all the reasons I have explained on here and everywhere else.

[renegotiation]

I don't need any further explanation or clarification. I fully understand your position. However, I am of the opinion that there may well be a legal avenue to pursue in challenging their ads. In time, and if successful, this could 'in turn' lead to further successes in relation to other aspects of this issue. If one can't say that they have done 'anything' wrong whatsoever we have no hope. I am going to attack what I perceive to be their weakest point. As far as I am concerned it is a large door with lots of manure behind it. Get it open a bit and all the manure will fall out. I am going to at least try and go down this road. This tactic might not help folk fighting C.O.'s and Orders For Sale now, but it might do in the future. Again, I apprecite the debate.

 

Thank you.

[FunkyFox]

I genuinely wish you the best of luck.

[renegotiation]

Cheers mate, I am sure I will need it! I will be cunning like a fox...

 

:lol:

[johndeevoy]

what you can't avoid is that the creditors ability to obtain a charging order is set down in law.

 

But if you have entered into a contract for an unsecured loan that contract implies that they will not take such action. To do so is clearly breach of contract and I for one would be suing them for the full amount of the C.O.