MBNA offering Partial Settlement After CCA failures.

[Basil Fawlty]

Can someone please look at the following MBNA application form from 1997 and tell me if they believe it is enforceable. Points to note:

 

''Financial and Related Conditions'' are photocopied on reverse of copy of application form.... nothing to say they were within the 4 corners of the original document.

In section 4 of these conditions they mention ''except as mentioned in conditions 9.4, 10.5 and 10.6....Also in section 5© it mentions condition 9.1 and 14.1...... none of these are on this form, nor on the present day terms and conditions (£12 charge) sent along with this application form.

 

Thanks in advance.

 

 

 

 

Edited October 14, 2009 by Basil Fawlty

[silverfox1961]

OH DEAR

 

I think this could be a cut and paste jobbie.

 

No key terms within the four corners of the document.

 

Does it happen to refer you to any terms overleaf? (not that it matters)

[Basil Fawlty]

Hi and thanks for replying so quick!

 

It says in the Additional Cardholder section:

 

I accept and agree to be bound by the MBNA Credit Card Conditions of use (as set out on the reverse of this agreement and as amended from time to time)

 

Then a box for Additonal Cardholder to sign.

 

The ''terms'' on the other side are upside down, and dont look, by size, as if they were originally on the reverse of the application form.

 

BF

[silverfox1961]

have a look at this thread. It may give you some help:

 

http://consumeractiongroup.co.uk/resources/templates-library/86-debt-collectors/609-mbna-agreementsapplication-forms

[Basil Fawlty]

Just had a look at that thread, and particularly where it mentions a common fault around 1997/8 that messed up the prescribed terms i.e.

 

Comments : Around this time, MBNA did cock-up the Prescribed Terms. A common mistake was on the Minimum Payment Prescribed Term, as MBNA used to add a series of exception clauses to them...i.e. exception clauses that were to be found within another Document!

 

That stuffs them, as the Prescribed Terms cannot be found in another Document...they must be contained within the four corners of the Agreement.

 

That appears to be the situation in my case.

 

Does that mean game, set and match to me....... or am I being way too optimistic?

[Basil Fawlty]

Anymore opinions on this one please?

[Basil Fawlty]

Hi. I put the following thread on the general forum but received very few replies. Maybe someone on here can advise me?

 

 

Can someone please look at the following MBNA application form from 1997 and tell me if they believe it is enforceable. Points to note:

 

''Financial and Related Conditions'' are photocopied on reverse of copy of application form.... nothing to say they were within the 4 corners of the original document.

In section 4 of these conditions they mention ''except as mentioned in conditions 9.4, 10.5 and 10.6....Also in section 5© it mentions condition 9.1 and 14.1...... none of these are on this form, nor on the present day terms and conditions (£12 charge) sent along with this application form.

 

Thanks in advance.

 

 

 

Edited October 14, 2009 by Basil Fawlty

[MBNASlayer(1)]

Hi basil

 

Your CCA is EXACTLY the same as mine except mine is a 1998 agreement. Please have a look at my thread for peoples responses so far.

 

My view (but I am not qualified so not to be relied upon) is that the financial conditions on the reverse are not referred to on the fron t page so none of the prescribed terms are present.

 

Good luck. Keep us updated.

[vint1954]

To have any luck in court, they would need an original agreement with the prescribed terms on the rear. Small hope as the scanned the front of most early documents, then shredded them.

 

No prescribed terms within the signature document.

 

xxxxxx 2009.

Dear xxxxxxxxx,

ACCOUNT IN DISPUTE

Re account no xxxxxxxxxxxxxxxxxxxxxxxxxxx

I write regarding recent communication regarding the above account. I acknowledge no dept to your organisation.

Further to my request under the above act, your attention is drawn to the fact that this account remains subject to a lawful serious dispute. On xxxxxxxx, by recorded delivery, I requested that you supply me a copy of the executed credit agreement covering this account pursuant to the Consumer Credit Act 1974 section 78, a copy of this request is enclosed. To date you have failed to comply with my request, supplying only an application form, devoid of all prescribed terms, and generic terms & conditions, which cannot be linked to any agreement which you claim that I have signed. Without production of the said agreement I am unable to assess if I am indeed liable for any alleged debt to you, nor does it give me any chance to evaluate whether any original agreement was ‘properly executed’ as required by the Consumer Credit Act 1974.

Contrary to your assertion, xxxxxxxx have not complied with the terms of CCA 1974 s78. The documents that you have supplied, do not comply with your duties to supply a “True Copy” of any agreement you claim to have been signed by me, for pre 2007 agreements. As you will be further aware, an agreement is not executed, until signed by both parties, so the document that you have supplied, being part application and part reconstruction, cannot be a True Copy of an Executed Agreement.

While this account remains in serious dispute, the relevant main points of the Law and OFT regulations while the account is in this state and xxxxxx remain in default are:

• You may not ask for payment against this account.
  
• I am not obliged to offer any payment against this account.
  
• You cannot register any data with a third party.
  
• You cannot take any enforcement action, including registering Defaults.
  
• You cannot pass the account on to a third party for collection.
  
• You cannot sell the account.
  

Let me explain here, what a true copy is:

In a recent letter from the enforcement department of the OFT, the text below was quoted, explaining what is required.

“The copy of the executed agreement need not be an exact copy but it must be a ‘true copy’ and not some reconstruction of what the original might have been and it must contain the same terms as the original. Where the terms have been varied as provided for within the agreement, the copy of the original agreement must be accompanied by a document setting out the current terms, as varied. Certain details may be omitted from the original agreement eg the signature but the debtor must be in no doubt as to the true nature of his obligations under the loan.

 

Should no original agreement be in existence it is very hard to say that the copy the creditor offers to the debtor is, in fact, a true copy as there would be no original with which to compare it. In our view the onus of proof would be on the creditor to show that the copy is a true one and where none existed he may have difficulty discharging this. Neither should creditors suggest that a consumer has signed a credit agreement where they are unable to provide evidence to support this — to do so is likely to be a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) and would also constitute an unfair or improper business practice.”

 

I also refer you to the information below.

1. A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

 

 

2. Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

 

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

 

2. The need for prescribed terms to be contained in the credit agreement is confirmed by the Author of the CCA1974 act, I quote ““As the draftsman of the Consumer Credit Act 1974 I would like to thank Dr Richard Lawson for his interesting and well-argued article (30 August 2003) on Wilson v First County Trust Ltd [2003] UKHL 40, [2003] 4 All ER 97.

 

Dr Lawson may be interested to know that I included the provision in question (section 127(3)) entirely on my own initiative. It seemed right to me that if the creditor company couldn’t be bothered to ensure that all the prescribed particulars were accurately included in the credit agreement it deserved to find it unenforceable, and that the court should not have power to relieve it from this penalty. Nobody queried this, and it went through Parliament without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed.” - 167 Justice of the Peace (2003) 773.”

I am now granting to you a further 7 days to produce a copy of an executable agreement. After that I will consider that the above matter is closed and that you will no longer pursue the alleged debt. If you are insisting that the non enforceable document, that you have supplied, is the only alleged agreement in your possession, then I would suggest that the best course of action would be to immediately set the balance of the above account number to zero.

I look forward to your response.

[Basil Fawlty]

Thanks very much.... I'm a beginner at this so its all new to me. I'm guessing the same, that the front and back arent connected. I CCA'd more than one MBNA card (one was a A&L card) and this is the only one to come back (after about 4 months!)..... still waiting on anything from the others. I sent out the Accounts in Dispute letters months ago, but heard nothing. Stopped paying, but they are still adding extortionate levels of interest.

 

BF

[Basil Fawlty]

Thanks vint.... will send that one out, even though I have sent Account in Dispute letters months ago!

 

BF

[Basil Fawlty]

Hi I'd like some advice please.

 

Last week I received a letter from MBNA regarding multiple credit cards I have with them. These are cards I CCA'd over 6 months ago, but received nothing.

I stopped paying after putting the accounts in dispute.

 

The letter last week have offered to write off about 60% of the debt, if I agree to pay the rest. It also asks for income and expenditure details before doing this, and an initial payment. Then it says if accepted, this will register as a Partial Settlement on my credit file.

 

My question is:

 

Does this mean an admission that they dont have an enforceable CCA?

Or, are they just trying to get some money, before selling on the rest to a DCA, who will then chase me for that?

 

What should I do?

 

Cheers

 

BF

[Pinky69]

I would simply reply that as you have not received copies of your credit agreements as you requested you will not be making any further payments unless you do and in the meantime the alleged accounts are in dispute. MBNA are losing big time because they didn't issue any agreements. It would not be beyond them to come to a partial settlement then sell the rest on. Income and expenditure is none of their business and they have no right to ask for it.

[Bigdebtor]

I agree with Pinky69. I was conned by MBNA about 2.5 years ago into paying 35% on 4 cards - A family member paid out £11k for me but I "saved" £23k on short settlement. I suspect I could have got away with paying out nothing if I had known about this site and CCA and SAR then. To be fair to MBNA I have not heard anything further from them or any DCA.

 

Before this I had got interest waived and affordable apyments agreed - I did not do a full I&E - just told them I had only £xx per month to divide up between umpteen creditors and their pro rata share was £y - take it or leave it. They took it for a few months then offered the 35% deal - which seemed great at the time!

 

BD

 

BD

[Stephan56]

Agree with that advice. ONLY reason to "settle" (if they have no CCA) is to get your credit report rehabilitated.

 

Any settlement should be (i) NO MORE than 15% (ii) have all negative references removed from your credit file (iii) any remaining account information to show a 0 (zero) balance, and (iv) written undertaking that account is regarded as PAID IN FULL and won't be sold on.

 

In my experience, notwithstanding that this would put money in the pocket of the DCA, they will not agree to this. But anything LESS risks you having paid them and still you get chased for the rest. it is just not worth it.

[Bigdebtor]

Stephan

 

Can you tell us a bit more about the low F&F's you have acheived?

 

BD

[andie_303]

Agree with that advice. ONLY reason to "settle" (if they have no CCA) is to get your credit report rehabilitated.

 

Any settlement should be (i) NO MORE than 15% (ii) have all negative references removed from your credit file (iii) any remaining account information to show a 0 (zero) balance, and (iv) written undertaking that account is regarded as PAID IN FULL and won't be sold on.

 

In my experience, notwithstanding that this would put money in the pocket of the DCA, they will not agree to this. But anything LESS risks you having paid them and still you get chased for the rest. it is just not worth it.

 

completely agree with this advice - do not accept partial settlement.

[Stephan56]

In response to Bigdebtor query:

 

I have managed to settle only two out of the 10 plus credit card "debts" - so it is not in anyway an easy exercise. And those settlements only achieved after a lot of "back and forth".

 

NONE of the DCAs (who now "control" all the accounts) have a valid and legally enfoceable CCA. Therefore, I could have just stopped paying (I pay each between £1 and £10 per month), accept I will get "chased" but ignore it, and wait six years to be statute barred.

 

I want to "draw a line under it AND rehabilitate my credit rating - to extent possilbe).

 

And donl't forget, DCA purchasers wil ave paid no more than 10% for debt. If you settle at 15% they are stil making a profit - which SHOULD be an incentive for them to close the acco0unt (but for reasons that are unfathonable to, many of them don't/won't settle).

 

To bring about a settlement I basically said:

 

1. You have no CCA/legally enforceable agreement;

2. I am going to stop paying;

3. I have a window to borrow money from friends/family to settle this - but they will only agree is (i) you rehabilitate my credit rating (ii) we settle for 10% (my starting figure) (iii) it is a FULL AND FINAL Settlement and (iv) the other items I set out in my earlier post.

 

I position it that the "lender" is calling the shots and MY negotiating power is limited as I need to borrow money to fund any settlement.

 

I add, again, that only two have gone for this, so not an easy road. But anything less than the above, worth just waiting the six years.

 

I hope this is helpful

 

 

You have no CCA and hence no legally enforceable agreement

[Bigdebtor]

Stephan56

 

Thanks for this. I totally agree with saying a third party is lendiong the cash and calling the shots. This stopped them putting extra psychological pressure on me as I said my hands were tied. Can you share with us who has settled - how much was involved and at what % rate? Were they among the smaller or larger debts you had - or no pattern?

 

How do you know the DCA only pays about 10%?

 

Surely if this is the case we should all float F&F offers of about 15% early on - so the original creditor knows there is a deal better than selling to a DCA.

 

Has anyone succeeded with such an approach?

 

BD

[Stephan56]

In my view, banks and CC companies should have a LEGAL OBLIGATION to offer a debtor the right of first refusal to buy the "debt" at the same price as the CC company is proposing to sell it to a DCA for.

 

What happens now is that CC companies sell on the debt, take a tax writeoff and then the DCA, who paid only 10% for it, chases the debtor. Who wins? Only DCAs - who are nothing more than debt speculators.

 

If debts were "sold" to the debtors (as happens in the commercial debt market) (i) CC companies would get the same/more money (ii) CC companies would not need to take such big writeoffs (and thus claim such a big tax credit) and (ii) debtors would be out from under the "debt burden quicker" and the whole consumer sector could be more rapidly rehabilitated.

 

Maybe some/many debtors could not even affrord to settle at 10 - 15%, but in which case the debts would get sold to DCAs and the current situation would exist. But, at least for many debtors who could scrape together money (borrow it etc), then this is a way out.

 

Also, DCAs never lent me any money. Only CC ocmpanies did. And they have already written it off. So anything I pay DCAs above 10% is PURE PROFIT to them - with their only costs being their costs of hassling me. And why should I pay for that!

 

Why don't banks and CC companies offer to settle direct with the debtors? Or respond positivley to offers from debtors along these lines? A real mystery to me. It is NOT economically rational and I just do not understand it or their thining. If anyone can enlighten me, I would be very grateful.

 

I "know" they pay 10% based on (i) a lot of reading (ii) looking at some debt purchase sites in US (where often 4 - 5% is the norm and (iii) talking to a lawyer who used to act for debt purchase companies years ago.

 

I imagine that there are pricing variations depending on the age of the debts, liklihood of collection etc. I have said to DCAs that my "working assumption" is you paid no more than 10% for the debt and I am using that my starting point. IF you, Mr DCA paid more, fine, but show me the evidence. If indeed you DID pay more then I can go back to the people lending me the money to TRY TO CONVINCE THEM to fund a settlement at a higher level." Needless to say, no proof has ever been forthcoming.

 

Settlements have been with Connaught and 1st Credit on underslying MBNA and Barclays cards. Debts claimed were circa £12K and £7K respectively

[Bigdebtor]

Stephan56

 

Thanks for this. I agree with your first line totally. Given we now virtually own two of the largest banks I think we should all e-mail our own MP's and suggest our own banks do this PDQ - no additional cost to the Bank and much fairer to a beleaguered debtor into the bargain.

[diddydicky]

In my view, banks and CC companies should have a LEGAL OBLIGATION to offer a debtor the right of first refusal to buy the "debt" at the same price as the CC company is proposing to sell it to a DCA for.

 

What happens now is that CC companies sell on the debt, take a tax writeoff and then the DCA, who paid only 10% for it, chases the debtor. Who wins? Only DCAs - who are nothing more than debt speculators.

 

If debts were "sold" to the debtors (as happens in the commercial debt market) (i) CC companies would get the same/more money (ii) CC companies would not need to take such big writeoffs (and thus claim such a big tax credit) and (ii) debtors would be out from under the "debt burden quicker" and the whole consumer sector could be more rapidly rehabilitated.

 

Maybe some/many debtors could not even affrord to settle at 10 - 15%, but in which case the debts would get sold to DCAs and the current situation would exist. But, at least for many debtors who could scrape together money (borrow it etc), then this is a way out.

 

Also, DCAs never lent me any money. Only CC ocmpanies did. And they have already written it off. So anything I pay DCAs above 10% is PURE PROFIT to them - with their only costs being their costs of hassling me. And why should I pay for that!

 

Why don't banks and CC companies offer to settle direct with the debtors? Or respond positivley to offers from debtors along these lines? A real mystery to me. It is NOT economically rational and I just do not understand it or their thining. If anyone can enlighten me, I would be very grateful.

 

I "know" they pay 10% based on (i) a lot of reading (ii) looking at some debt purchase sites in US (where often 4 - 5% is the norm and (iii) talking to a lawyer who used to act for debt purchase companies years ago.

 

I imagine that there are pricing variations depending on the age of the debts, liklihood of collection etc. I have said to DCAs that my "working assumption" is you paid no more than 10% for the debt and I am using that my starting point. IF you, Mr DCA paid more, fine, but show me the evidence. If indeed you DID pay more then I can go back to the people lending me the money to TRY TO CONVINCE THEM to fund a settlement at a higher level." Needless to say, no proof has ever been forthcoming.

 

Settlements have been with Connaught and 1st Credit on underslying MBNA and Barclays cards. Debts claimed were circa £12K and £7K respectively

 

a nice sentiment but really? what message would creditors send out if it was widely known that you could simply default/dispute a debt in the full knowledge that you could then settle it for 10p in the pound?

 

i think i may also be correct is saying they would get no tax releif on the write off in this way

[Stephan56]

In response to Diddydicky

 

I agree, there are issues of moral hazard. However, I do not think many people would want to reach the point where a CC company is planning to sell the debt (you will have trashed your credit rating, been chased by creditors and otherwise taken a "beating"). In my view, if people CAN pay their bills they would. Most of us are here because we just cannot do so. Not because we do not want to. While I accept there will always be some people "who play the system" that is no reason to not have a "sensible solution" for those that are in genuine distress.

[Basil Fawlty]

Received a DN today. The date on the notice is 4th December (Friday) and the date for payment of arrears to be paid is 21st December.

Going by that its 17 days but that includes the weekend.

Receiving it today, the 9th, means only 12 days.

I've kept the envelope but there is no date on it, only two orange bar codes

on the bottom half.

Is there any way of knowing if this is valid?

 

Tks

BF

[mkb]

Does it have UK Mail or TNT or something similar where the stamp would normally be? There should be something there or the RM would be charging you for its delivery (God, hope that doesn't give them ideas )

 

If posted 1st class, date of service would be 8th and 14 clear days would be 22nd

 

If posted by any other method, date of service would be 10th and 14 clear days would be 24th

 

so IMO, the notice is invalid.