Annual Statements for Loan Agreements Query

[Dipply75]

Hi all

 

Am fighting with RBS over an unsecured personal loan taken out in December 2005 and am looking for clarification on one of the 2006 amendments to the CCA 1974.

 

Section 77a states:

 

Statements to be provided in relation to fixed-sum credit agreements

 

After section 77 of the 1974 Act insert—

“77A Statements to be provided in relation to fixed-sum credit agreements

 

(1) The creditor under a regulated agreement for fixed-sum credit—

(a) shall, within the period of one year beginning with the day after the day on which the agreement is made, give the debtor a statement under this section; and

(b) after the giving of that statement, shall give the debtor further statements under this section at intervals of not more than one year.

 

 

So, from when this amendment came into effect there should have been an annual statement provided for the loan, yes?

 

 

Then it states:

 

 

Where this subsection applies in relation to a failure to give a statement under this section to the debtor—

(a) the creditor shall not be entitled to enforce the agreement during the period of non-compliance;

(b) the debtor shall have no liability to pay any sum of interest to the extent calculated by reference to the period of non-compliance or to any part of it; and

© the debtor shall have no liability to pay any default sum which (apart from this paragraph)—

(i) would have become payable during the period of non-compliance; or

(ii) would have become payable after the end of that period in connection with a breach of the agreement which occurs during that period (whether or not the breach continues after the end of that period).

 

 

I read this as a clear statement that the debtor has no liability to pay an interest calculated for the period no statements are provided (period of non compliance). Not, no liability until the statements are provided or only liable after compliance etc...in other words, the cannot charge interest for the period of non compliance, full stop. Not that they can deduct it then just add it back on after sending the missing statements.....

 

Can anyone offer an opinion on this? Am I able then to tell RBS to cancel/refund any interest charged during the period of non compliance, as this will be my next step

 

 

And is there anyone out there that does receive an annual statement for their loan?

 

 

Any advice appreciated!

[rickyd]

I have to say I'm a little confused.

 

Why do you feel that the amendment of the CCA in 2006 applies to a loan taken out in 2005?

 

Annual statements become compulsory for fixed sum credit agreements from 1st October 2008. Prior to this date the requirement was to provide a copy of the credit agreement within seven days of signing the original. In practice you would normally receive a copy at the time of signing. Without the copy the creditor can only enforce a default with a court order.

 

In this case it seems very much like the original obligations of the loan agreement will stand, including any penalties including interest, hope this helps!

Edited April 27, 2009 by rickyd
extra information discovered after posting

[Dipply75]

Hi Rickyd, thankyou so much for replying, that is very helpful!

 

Firstly I had read about so much of the act being retrospective so could apply it to an existing loan but I had no idea the 2006 act did not come into force until the end of 2008.

 

I know there are others with different loan providers that have been receiving annual statements for about 2 years now, I guess thats why I assumed I should be getting one also. I am shocked at the 2 year gap between the act being passed and coming into effect....call me cynical but not surprising that they pass an act 2 years ago supposed to help us yet the help only started 6 months ago!

 

Thanks for the help, much appreciated

[rickyd]

My best guess is that with fixed rate loans, the reason that statements are less important is because there are no changes along the way from the terms set out in the loan agreement. The only change from the original details is when an early settlement figure is requested and this would bring a freshly created statement specifically tailored to the date and outstanding amount. Although you could say the same for fixed rate mortgages they are covered by altogether different legislation that requires an annual statement be issued even for interest only loans where absolutely nothing changes until the end, as a home is at risk if payments are missed. Glad you found my reply useful:-)