df vs. MBNA/Hillesden Securities - Sheriff Court Citation

[davie_falkirk]

Hi all,

 

I've been a long time follower of this forum and dipped in previously in 2009 when I started actively dealing with the DCAs that I had chasing me. I'm now a bit further down the road and would like to start a new thread to discuss my options and get some input from others who have been in my position before.

 

Background

 

In late 2008 I started having financial difficulties. I had unwisely tried to juggle my credit card debt by repeatedly transferring the balances to new deals from competing providers to take advantage of 0% interest periods and low introductory monthly repayment offers. This had worked initially because I had cleared all of the debt from my existing cards onto the 3 new cards, one of which was the MBNA account in question.

 

As a result of two missed payments to one of the cards, which happened when the statements arrived AFTER the due date, I found myself in the position that my credit rating had been damaged. The next time I tried to obtain a new credit card deal in order to transfer the balance from an existing card which was reaching the end of the 0% / low monthly repayment period I found that I was unable to do so as my application was rejected.

 

The result of this was that within a matter of months my monthly payments snowballed on all 3 cards. Initially I tried to keep up with the payments by making cash withdrawals from my 3 original cards but very soon I had reached the limit on those as well, but had done little more than double my outstanding debt.

 

At this point it very quickly became a choice between: paying the mortgage, buying food for the house and fuel to get to work or keeping up with these payments, which by now were crippling due to owing monthly payments for my existing cards again on top of the 3 consolidation cards. I therefore stopped the monthly payments to all of the credit cards.

 

For the next few months I stuck my head in the sand and did nothing. I felt deeply ashamed at the position I had gotten into having never defaulted on a payment in my life. In mid 2009 the threatening letters and phone calls from the credit card companies and debt collection agencies were becoming unbearable and I decided to take stock and sort everything out. I initially looked at dealing with a consolidation service in an effort to pay back the debts over a longer period however by this stage I had been made redundant from my job and had no income to speak of.

 

I started reading forums such as CAG and decided that the best course of action at this point was to validate each of the debts and confirm that they were indeed legally enforceable before making any further payments or entering into any repayment agreements. To begin with it was purely to buy me some time but I realised that if I saw it through I might end up reducing some of what I owed or at the very least being in a position to negotiate payments that I could actually afford.

 

MBNA Case

 

At this time DLC were acting on behalf of Hillesden Securities Ltd (who had bought the original debt from MBNA) and I wrote to DLC at the beginning of May 2009:

 

This letter is a formal request pursuant to s.78(1) of the Consumer Credit Act 1974. I require you to provide me with a true copy of the credit agreement relating to the above account, together with any other documentation the Act requires you to provide.

 

I expect you to comply fully and properly with this request, within the statutory time limit.

 

You are reminded that should you fail to comply with my request, the provisions of s.78(6) will apply.If it is your view that you are not the creditor, s.175 of the CCA 1974 applies in the case of a simple assignment, and places a duty upon you to pass this request to the creditor.

 

In the case of an absolute assignment, you are a creditor as defined by s.189. If you contend that you purchased the rights but not the duties of any agreement, you are reminded that s.189 of the Act is clear that an assignment is of both rights and duties.

 

Your attention is drawn to ss.5(2), 3(b), 6 and 7 of the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR).I enclose a postal order in the sum of £1.00, which is the statutory fee. Note that these funds are not to be used for any other purpose.

 

If you are unable to comply fully and properly with this request, you should confirm this in writing at the earliest opportunity, and certainly within the statutory time limit for compliance, and return the fee.

I received the letter below back from HS a fortnight later:

 

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

I responded at the start of June 2009:

 

Thank you for your letter of xx/05/09, the contents of which have been noted.

You have failed to comply with my legal request to supply me with a true copy of the original Consumer Credit Agreement for the above account within the statutory time limit.

On xx/05/09 I made a formal request for a true signed agreement for the alleged account under the Consumer Credit Act 1974 s78(1), a copy of which is enclosed for your perusal and ease of reference.

 

You have failed to comply with my request within the statutory time limit, and as such the account entered default on xx May 2009.

 

The document that you are obliged to send me is a true copy of the executed agreement that contained all of the prescribed terms, all other required terms and statutory notices and was signed by both your company and myself as defined in section 61(1) of CCA 74 and subsequent Statutory Instruments. If the executed agreement contained any reference to any other document, you are also obliged to send me a copy of that document. In addition a full statement of this account should have been sent to me detailing all debits and credits to the account.

 

Furthermore:

You are no doubt aware that the Consumer Credit Act allows 12+2 working days for a request for a true copy of a credit agreement to be carried out before your client enters into a default situation.

 

This limit has expired.

 

As you are no doubt aware section 78(6) states:

 

If the creditor under an agreement fails to comply with subsection (1)—

 

(a) he is not entitled, while the default continues, to enforce the agreement;

 

Therefore this account has become unenforceable at law as you have failed to comply with a lawful request for a true, signed copy of the said agreement and other relevant documents mentioned in it, failed to send a full statement of the account and failed to provide any of the documentation requested.

 

Consequentially any legal action you pursue will be averred as both UNLAWFUL and VEXATIOUS.

 

Furthermore I shall counterclaim that any such action constitutes unlawful harassment.

 

Please note you may also consider this letter as a statutory notice under section 10 of the Data Protection Act to cease processing any data in relation to this account with immediate effect.

 

This means you must remove all information regarding this account from your own internal records and from my records with any credit reference agencies.

Should you refuse to comply, you must within 21 days provide me with a detailed breakdown of your reasoning behind continuing to process my data.

 

It is not sufficient to simply state that you have a ‘legal right’; you must outline your reasoning in this matter and state upon which legislation this reasoning depends.

 

Should you not respond within 21 days I expect that this means you agree to remove all such data.

 

Furthermore you should be aware that a creditor is not permitted to take ANY

action against an account whilst it remains in dispute.

 

The lack of a credit agreement is a very clear dispute and as such the following applies:

 

* You may not demand any payment on the account, nor am I obliged to offer any payment to you.

* You may not add further interest or any charges to the account.

* You may not pass the account to a third party.

* You may not register any information in respect of the account with any credit reference agency.

* You may not issue a default notice related to the account.

 

I reserve the right to report your actions to any such regulatory authorities as I see fit.

 

You have 14 days from receiving this letter to contact me with your intentions to resolve this matter which is now a formal complaint.

 

I would appreciate your due diligence in this matter.

 

I look forward to hearing from you in writing.

 

HS replied a few days later acknowledging receipt of my letter and advising that they would respond in due course.

 

I then received this reply a few days after that:

 

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

 

At the end of June 2009 I received the following letter from HS:

 

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

 

This letter was accompanied by what looked like all previous statements and default notices on the account.

 

There was also the following document claiming to be the CCA (1 x double sided sheet and 1 x single sheet - more on this later!) with the HS account number hand written in the top right corner and the MBNA account number hand written above the title, with another typed reference number on the left which I didn't recognise. It is titled as a CCA and claims to contain sections 1-3 of the terms and conditions (I was also sent a full copy of the CURRENT terms & conditions which is also posted below).

There appears to be at least two pages missing from the CCA; I have seen other people post similar documents from MBNA and mine appears to be incomplete. The first sheet is double sided yet comparing it with the full T&Cs shows that it jumps from section 2(b) at the bottom of the front page to midway through section 3(a) on the back, missing out 2© - 2(g). It then jumps from the heading: "Your right to cancel" at the bottom of the back page to the box which should confirm my digital signature at the top of the 2nd sheet. As you can see it therefore doesn't show any form of consent on my part to agreeing with the terms, digital or otherwise:

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

 

Here are the terms & conditions that were sent at the same time, note the different APR shown compared to the CCA:

 

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

 

As mentioned earlier, also enclosed with the above were copies of previous monthly statements from MBNA dating from August 2006 showing the initial balance transfer and transfer fee then subsequent statements showing the minimum monthly repayments of £5 under the terms of the 1 year interest free period for balance transfers. A second balance transfer was made in January 2007. The minimum monthly repayments continued until August 2007 when the 1 year interest free period expired. As explained above I had been unable to transfer this debt to a new deal with a different provider and had no choice but to start paying the full interest on the balance. The statement from September 2007 shows a monthly interest rate of 1.2408% which indeed matches the APR of 15.9% shown on the CCA but not the rate of 34.9% shown on the terms and conditions above.

Having stopped making payments in August 2008 the minimum payment had increased to almost £600 by December 2008. The APR had increased to ~28% as the base rate had gone up significantly by then.

 

It is also worth noting that the monthly interest rate shown on the most recent statement provided (dated March 2009) is 2.5292%. This works out to an APR of 34.9% which is the interest figure quoted in the terms and conditions above. This confirms that that the T&Cs provided do not relate to any agreement signed by me in 2006, as these terms and conditions clearly date from 2009 when the base rate was much higher. This is despite the fact that the cover letter clearly states that the enclosed documentation was in response to my requests for original agreements and related documents.

I responded with the following letter at the start of July 2009:

 

Thank you for your letter of xx/06/09, the contents of which have been noted.

Please refer to the document enclosed with your letter of xx/06/09, titled “Credit Card Agreement Regulated by The Consumer Credit Act 1974”. The printed document I have received is clearly not a true copy of the executed agreement as it does not contain my signature and does not fully comply with the prescribed terms laid out in the Consumer Credit Act 1974 for a valid Consumer Credit Agreement.

 

I put it to Hillesden Securities that the document in my possession, which Hillesden Securities claim is a copy of the executed agreement for the above account, is a fabricated example of a credit agreement demonstrating breach of the Consumer Credit Act 1974 and is nothing less than fraud.

Thus, you have still failed to comply with my legal request of xx/05/09 to supply me with a true copy of the original Consumer Credit Agreement for the above account and the account remains in dispute.

 

Finally, the Consumer Credit Act 1974 stipulates that a company is required to hold a licence to issue credit. It is a criminal offence to offer credit without a licence issued by the OFT. Please provide a copy of the licence issued to MBNA which was valid on the date of the credit agreement relating to the above account.

 

I look forward to hearing from you in writing.

HS responded with the following at the start of August 2009:

 

(I did try to post this as a link but my post count isn't high enough. To view the pics please go to the Photobucket site and search for user "davie_falkirk2")

 

Enclosed was a printout from the OFT showing details of the credit license held by MBNA valid on the date of the credit agreement relating to this account. As you can see the letter claims that under the terms of the Electronic Communications Order 2004 which came into effect on 31st December 2004, the CCA1974 was changed and it was no longer a legal requirement to obtain a signed credit card agreement, that an electronic agreement was sufficient.

 

Having previously notified HS that I considered the account to be in dispute and unenforceable without the original signed credit agreement I decided to cease all communications until such time that they either produced the original signed agreement or until they commenced court proceedings against me, at which time I would set forward the arguments as above in order to request that the court either declare that the account is unenforceable or issue an order to the claimant requiring them to provide the original signed agreement containing the prescribed terms with all of the terms and conditions within a reasonable time frame.

 

I hadn't heard anything for a long time other than the usual threat-o-grams until yesterday when I received a "Form 05" citation from the Sheriff Court requiring that I either admit the claim and repay the money owed, admit the claim and apply for a time to pay direction or time order, or pay the court fee of £80 and lodge a notice of intention to defend (Form 07) with the court and the Pursuer.

I was worried at first because the application for the citation was dated 2 weeks prior to the date that I was served, but the date of service and date of expiry of period of notice have both been scored out and new dates handwritten in. I thought that this might have been an attempt to trick me into missing the deadline for responding so I phoned the court and they advised that I have 21 days to respond from the date of being served not 21 days from the date the citation was issued. I think I'll still try to get my response in before the original date though.

 

I've had a good read through both this site and several others and the overwhelming opinion seems to be that a "tick" on the online CCA is indeed sufficient to comply with the CCA1974 and the CCA would be enforceable assuming all of the prescribed terms are also present.

 

What I have not been able to find is any confirmation of whether this has been argued or tested in court.

 

Having spent hours going over my notes and reading up since I received the citation, I think my defense will be as follows:

* MBNA did not perform due diligence as a careful lender prior to making credit available to me. My current account was already overdrawn by a significant amount, I had existing credit with rival companies on 3 credit cards in excess of £15k and I had recently remortgaged my property and used most of the equity on my house to clear previous credit card debts on my existing cards.

 

* They have not supplied the signed agreement when applying for the citation or serving me with the citation despite referring to the agreement in their argument.

 

* The Electronic Communications Order 2004 did not affect the fact that s.61.1(a) of the CCA1974 still requires that a properly executed agreement be signed by the debtor and creditor. It allows for digital transmission of the document in the form of a fax or scanning it and sending via email. It does not hold that a tick box on a web page can be considered as a valid means of signing the document. The CCA1974 does not define what the prescribed form of the signature must be, however I would argue that under the terms of the CCA1974 a written signature is still required and the changes under ECO2004 only allow for digital transmission of the signed document rather than negating the need for a written signature.

 

* The tick on the page is nothing more than a picture; the true electronic signature is the conversion of the submitted webpage into a digital database entry or electronic mail or some other form of digital storage in which a record can be kept of when that electronic signature was digitally transmitted and from which source IP address it originated from. It would also need to be associated with some form

of identifying information unique to the individual submitting the electronic signature.

 

* A picture of a tick does not prove that I accepted the terms of the agreement. Where is the log of the IP address and digital track? There are many court cases dealing with illegal downloads at the moment and the key evidence in these cases is some form of proof that the electronic activity originated from the person accused of downloading copyrighted material. Otherwise there is no case. The same should apply here with regards to verification of the electronic signature on the agreement.

 

* I would therefore argue that the onus is on the creditor to prove that the electronic signature was indeed submitted by me and that this document has not simply been generated for the purposes of attempting to satisfy the terms of the act.

 

* This is why I believe there is a valid argument that the changes to the cca74 do NOT give any strength or validity to electronic signatures in the form shown here.

 

* EU directive 1999/93/EC indicated a distinction between electronic signatures and advanced electronic signatures, and also set out a framework for electronic signatures. Much of this was incorporated into the 2002 regulations (which ones?) and the ECO2004

 

From 1999/93/EC:

 

(20) Harmonised criteria relating to the legal effects of electronic signatures will preserve a coherent legal framework across the Community; national law lays down different requirements for the legal validity of hand-written signatures; whereas certificates can be used to confirm the identity of a person signing electronically; advanced electronic signatures based on qualified certificates aim at a higher level of security; advanced electronic signatures which are based on a qualified certificate and which are created by a secure-signature-creation device can be regarded as legally equivalent to hand-written signatures only if the requirements for hand-written signatures are fulfilled;

 

For the purpose of this Directive:

 

1. "electronic signature" means data in electronic form which are attached to or logically associated with other electronic data and which serve as a method of AUTHENTICATION;

 

* How exactly does a picture of a tick in any way provide authentication?

 

* Annex IV of the above directive goes on to establish criteria for secure signature verification. I would argue that the credit card companies have been ill-advised or have simply cut-corners by assuming that a tickbox would provide sufficient means of validating and authenticating the CCA.

 

* ANNEX IV of the same directive:

 

Recommendations for secure signature verification

 

During the signature-verification process it should be ensured with reasonable certainty that:

 

(a) the data used for verifying the signature correspond to the data displayed to the verifier;

 

(b) the signature is reliably verified and the result of that verification is correctly displayed;

 

© the verifier can, as necessary, reliably establish the contents of the signed data;

 

(d) the authenticity and validity of the certificate required at the time of signature verification are reliably verified;

 

(e) the result of verification and the signatory's identity are correctly displayed;

 

(f) the use of a pseudonym is clearly indicated; and

 

(g) any security-relevant changes can be detected.

 

* The above taken into consideration along with the text in the Electronic Communications Order 2004 shows that a picture of a tick is NOT sufficient means of establishing identity and consent via a digital signature.

 

From ECO2004:

 

(1)In any legal proceedings—

 

(a)an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and

 

(b)the certification by any person of such a signature,

 

shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.

 

(2)For the purposes of this section an electronic signature is so much of anything in electronic form as—

 

(a)is incorporated into or otherwise logically associated with any electronic communication or electronic data; and

 

(b)purports to be so incorporated or associated for the purpose of being used in establishing the authenticity of the communication or data, the integrity of the communication or data, or both.

 

(3)For the purposes of this section an electronic signature incorporated into or associated with a particular electronic communication or particular electronic data is certified by any person if that person (whether before or after the making of the communication) has made a statement confirming that—

 

(a)the signature,

 

(b)a means of producing, communicating or verifying the signature, or

 

©a procedure applied to the signature,

 

is (either alone or in combination with other factors) a valid means of establishing the authenticity of the communication or data, the integrity of the communication or data, or both.

I am quite keen to fight this action however obviously I would welcome any advice or suggestions from more experienced forum members.

 

I still have a lot of work to do and my biggest concern at the moment is getting things done in the right order; responding to the citation, submitting my defense, requesting documents from the other side etc.

 

I'm also quite worried about the differences between Scottish and English law wrt CCA and would especially welcome any advice in this area. The same goes for Civil Procedures.

 

I might be able to apply for legal aid but its unlikely that I will get sufficient help and will probably be going to court on my own.

 

DF.

Edited June 24, 2011 by davie_falkirk

[davie_falkirk]

Not sure why the formatting is so messed up! It looked ok before I submitted the post.

[davie_falkirk]

Bumping in the hope of some advice, I've submitted notice of my intention to defend and have until Thursday to submit my defence. Options hearing is at the end of September.

[davie_falkirk]

Apologies again for the lack of links to my pictures on photobucket in my first post, I did have them all in but had to take them out due to my post count. If an admin could help me sort them I would be much obliged.

 

OK so I submitted my defence on time, and today received a copy First Inventory of Productions and and a First Note of Adjustments for Pursuers.

 

I have about a month to respond and I assume I also need to lodge my own Inventory of Productions with the court prior to the deadline for submitting adjustments. I have a further week for lodging preliminary pleas and the Options hearing is a week after that.

 

They are taking a very hard line over the whole electronic signature issue which I knew they would as they pointed to that in the initial exchange of letters before it went to court. I think there is a chink in their armour though as they have yet again failed to produce a copy of MY electronic signature, there are pages missing from the supposed copy of the CCA that they have submitted in their Inventory of Productions (basically the same documents I received in response to my s78 request) which I will quote below to save you scanning for it in my length first post:

 

There was also the following document claiming to be the CCA (1 x double sided sheet and 1 x single sheet - more on this later!) with the HS account number hand written in the top right corner and the MBNA account number hand written above the title, with another typed reference number on the left which I didn't recognise. It is titled as a CCA and claims to contain sections 1-3 of the terms and conditions (I was also sent a full copy of the CURRENT terms & conditions which is also posted below).

There appears to be at least two pages missing from the CCA; I have seen other people post similar documents from MBNA and mine appears to be incomplete. The first sheet is double sided yet comparing it with the full T&Cs shows that it jumps from section 2(b) at the bottom of the front page to midway through section 3(a) on the back, missing out 2© - 2(g). It then jumps from the heading: "Your right to cancel" at the bottom of the back page to the box which should confirm my digital signature at the top of the 2nd sheet. As you can see it therefore doesn't show any form of consent on my part to agreeing with the terms, digital or otherwise

I assume that they will now not be able to amend this or produce in court the complete document showing my electronic signature after having lodged the incomplete document in their Inventory of Productions?

 

Their Adjustments are pretty predictable, lots of legal speak and latin terms. They are denying my points and expanding on their own based on my defence.

 

My defence is that the agreement is not properly executed (though clearly I will need to expand this now to point out that they have lodged a partial document in their Inventory of Productions) and that due to financial difficulties I made the perfectly legal choice to validate whether or not my current debts were in fact legally enforceable prior to making any further payments.

 

My pleas in law were, in short:

 

1. The initial writ did not contain details of the regulated agreement as required by the "Act of Sederunt (Amendment of the Act of Sederunt (Sheriff Court Rules) (Miscellaneous Amendments) 2009) 2009".

 

2. MBNA failed to perform due diligence as a careful lender prior to making credit available to me.

 

3. That the agreement was not properly executed, although I have not yet expanded on my points above as to why I feel the CCA1974 still requires a proper signature and the ECO only allowed for digital transmission of the proper signature.

 

They have denied my point about the lack of details of the regulated agreement in the initial writ although they have massively expanded on the description of the agreement in the first adjustment, which I think in itself shows that this level of detail is missing from the initial writ.

 

My worry as a layman is that the adjustments are effectively absorbed into the initial writ and that when the case appears before the court they will review only the finished article as it were.

 

They have dismissed my point about due diligence as irrelevant, and have attacked my claim that the agreement is not properly regulated by averring that I am attempting to misuse the CCA1974 to avoid repayment.

 

I think they have also shot themselves in the foot by stating that I took the loan out with no intention of repaying it, despite previously admitting that I made payments to the account for over 2 years.

 

I know that I will need to expand my arguments however I will try to keep things nice and simple wherever I can, that seems to be the winning formula which other successful caggers have used in the past when cases have gone to court.

[davie_falkirk]

Quick update - I was a day late with my defence adjustments because I thought they had to be lodged with the court rather than the other side. At my Options hearing I was successful in getting my adjustments included in the record (seems quite commonplace for documents to be submitted late having listened to some of the other cases) and the hearing has been continued for four weeks to allow the other side a proper chance to respond. I also have two more weeks to make further adjustments.

 

I have decided to seek proper legal advice now having consulted with a friend off the record and also with an agency solicitor, and have been given the name of a solicitor in Edinburgh who is very good on technical defences.

[davie_falkirk]

Further update - I have received consultancy from a commercial solicitor in Edinburgh to help me tighten up some of the technical points of my defence, though I still ultimately wrote the defence adjustments and Rule 22 Note myself and will maintain my status as party litigant when dealing with the court.

 

Continued Options Hearing was today, case was simply scheduled for a diet of debate given that both sides have Rule 22 Notes to be dealt with. This will happen mid-December.

 

Back to my solicitor now for further advice on attacking the Pursuer's Rule 22 Note - which IMO looks rather weak

[davie_falkirk]

Are there any active moderators on this site? I've tried emailing the webmaster through the contact page and sending PM's to a couple of mods to no avail.

[dx100uk]

i must be honest and say you need throw the cca paperwork 'wriggles' out the window

 

since carey etc

you'll never be able to prove you did not ever have an agreement nor the money etc etc.

with a recon & a financial link

any judge would sink you.

 

 

my pers opinion anyhow

 

dx