NI court - late placing of a Default By Barclaycard/lowells - **SETTLED OUT OF COURT**

[SabreSheep]

Unenforceable is not the same as "doesn't exist"

 

Read through Marey Carey vs HSBC

 

the 2009 case states that in case of breach of s78 the creditor cannot obtain a judgments which enforces the agreement however THE CONTRACTUAL LIABILITY OF THE DEBTOR TO PAY ANY SUMS DUE REMAINS. Furthroremore during the s78 default period interest will still accrue and the creditor is still entitled to demand payment, issue a default notice and/or report the debtor to a Credit Reference Agency

 

Case also dismissed the idea that being in breach of s78 created an unfair relationship.

 

So as you have pointed out, you WOULD have to get the court to rule the agreement irredeemably unenforceable before anything can be done. this could be difficult.

[theoldrouge]

McGuffick v RBS

 

from the fca failure to comply with s77/78/79 request

 

(5) In the judgment of McGuffick -v- The Royal Bank of Scotland plc [2009] EWHC 2386 (Comm) Flaux J held in a case under section 77 of the CCA that passing details of a debt to a credit reference agency and related activities do not constitute enforcement under the CCA

[johndeevoy]

A debt collection agency has placed a Default on my credit file but their principle never complied with a s78 request.

 

The matter has also been in dispute for more than 6 years and

 

the debt collection agency has confirmed in writing that they will no longer be pursuing the debt but that they will not remove the Default.

 

The Default is due to drop off next year but my partner and I need a mortgage now;

I have a clean file apart from this one Default and have been refused a high-street mortgage product due to "adverse credit".

 

I feel I have no choice but to sue for removal of the Default.

I wish to ask the Court to order the Default removed and to claim compensation for the damage caused in missing out on the best mortgage rates.

 

Is this a libel action that I need to issue in the County Court?

 

 

I would much rather issue Small Claims proceedings but I understand that the Small Claims Court does not deal with libel claims.

[silverfox1961]

Hi

If the default was lawfully placed as being accurate then they have no duty to remove it. Taking them to court would be like throwing good money away.

 

It matters not whether they can produce an agreement or not. Filing a default notice is entirely separate from the CCA

 

The debt collection agency would not have placed the original default. The original creditor would have done that with the agency then replacing the name with their own.

 

IF the default was placed later than the guidance from the ICO recommended then you may have grounds for complaint.

 

The ICO state that a default should be placed as soon as possible and no later than 6 months after the first missed payment.

 

Some grounds for your action to remove may be helpful.

[johndeevoy]

Hi silverfox, thanks but you didn't answer my question - is it a libel case? Can I issue proceedings in the Small Claims Court under a non-libel action?

 

To your points, my case is that the default has not been lawfully placed.

 

 

The account dates from pre 2007 and Wilson v First County applies (if they do not have a signed agreement they lose their rights including the right to place defaults).

 

 

Also, Grace -v- Black Horse, the matter is now irredeemably unenforceable due to being statue-barred,

 

 

I am under no legal obligation to make any payments but I am still being treated by prospective creditors as having "adverse credit".

 

The default carries the name of the agent and they refuse to remove it so it is them I will be suing.

[johndeevoy]

Hi silverfox, I believe i tried the ICO route before on this and it went nowhere. It may well be worth tring it again as the company in question waited for nearly 2 years after non-payment to place the default. Do you have a link handy to the ICO guidance you refer to regarding the 6 months? Thanks.

[dx100uk]

tell us about the debt and this default please

 

 

I suspect the OC defaulted the account before sale.

 

 

dx

[ncf355]

Hi silverfox, I believe i tried the ICO route before on this and it went nowhere. It may well be worth tring it again as the company in question waited for nearly 2 years after non-payment to place the default. Do you have a link handy to the ICO guidance you refer to regarding the 6 months? Thanks.

I have to disagree with silverfox here

 

If they cannot provide a copy of the original credit agreement, the debt is unenforceable at law

 

As such, via the judgement made in Grace v black horse, they may not report the Default to the CRA whilst the debt remains unenforceable

 

 

Furthermore, it sounds to me as if there is some ambiguity regards the date the Default commenced

 

Ordinarily this would be 6 month after the last full payment was made

[SabreSheep]

1. Only a court can deem the debt irredeemably unenforceable.

2. Statute Barred does not equal debt not exist. (Only in scotland does this happen after 5 years) In E+W if a debt is statute barred, it means it cannot be enforced (You have that bit right) However the debt is still owed and therefore still exists.

3. Failure to comply with a cca request does not stop them from placing defaults as giving information to a CRA is not deemed enforcement action.

 

I have breifly looked at the Wilson v First County case and cannot see any mention of default.

For impact of CCA requests, I suggest you view the more recent case of Marey Carey vs HSBC

[dx100uk]

7 threads merged on this issue

 

if you can prove that Barclays registered a default on date XXXXXX

and that the lowlife default is a diff date.

 

simply goto the ICO/FOS.

 

lowels cannot change the original default date entered by the original creditor.

 

so, have you a copy of the Barclays default notice?

 

dx

[johndeevoy]

I have to disagree with silverfox here

 

If they cannot provide a copy of the original credit agreement, the debt is unenforceable at law

 

As such, via the judgement made in Grace v black horse, they may not report the Default to the CRA whilst the debt remains unenforceable

 

 

Furthermore, it sounds to me as if there is some ambiguity regards the date the Default commenced

 

Ordinarily this would be 6 month after the last full payment was made

 

They waited for over a year after I stopped paying before placing a default. I am currently searching the ICO website for the guidance that says 6 months. If anyone has a link please share.

[SabreSheep]

Your second case however is a bit more interesting, running out of time now but will hopefully look at it later after work

 

I have to disagree with silverfox here

 

If they cannot provide a copy of the original credit agreement, the debt is unenforceable at law

 

As such, via the judgement made in Grace v black horse, they may not report the Default to the CRA whilst the debt remains unenforceable

 

 

 

Remember with Marey Carey ruling a CCA request *CAN BE SATISFIED* with a reconstituted copy. HOWEVER they would need the original to use to ENFORCE the agreement in COURT

It is not irredeemably unenforceable until either it becomes Time Barred (And that is where OP should be looking to fight this battle) OR a court says it is so.

[johndeevoy]

Ok, i just realised that I complained to the ICO about a different matter some years ago and it took them 8 months to deal with it.

 

I need this addressed ASAP so it seems legal proceedings are unavoidable.

 

I guess that the agency will just remove the default rather than try to defend my claim.

 

The question remains - is this a libel case?

 

And if so, is there any way I can re-frame it to fall within the remit of the Small Claims Court?

[dx100uk]

have you a copy of the original Barclaycard default notice

 

 

dx

[johndeevoy]

I would rather not have had these old threads merged as I created the new thread to ask a specific question

- is a Court action to remove a default and claim damages a libel action?

 

Seeing as we are here I have gone through the paperwork

and I received a Default Notice under 87(i) CCA dated 2nd April 2009 asking for payment by 19th April 2009.

 

 

I don't seem to have received any other Default Notices and then the default was registered with CRA in Jan 2010.

[dx100uk]

then send lowells a copy of the DN and give them 14 days to remove their default

or align it with the Barclays date.

 

 

a dca even if they own a debt

cannot change the original OC's defaulted date.

 

 

dx

[johndeevoy]

then send lowells a copy of the DN and give them 14 days to remove their default

or align it with the Barclays date.

 

dx

 

From my last correspondence with Lowells they said that Barclays had placed the original default.

 

They just changed their name onto it at some time.

 

This is why I didn't want these threads merged,

 

some of the older posts I made had info that was wrong.

 

It seems Barcays placed the default in Jan 2010, then Lowells put their name on it sometime thereafter.

[dx100uk]

that's ok no issue with old wrong info.

 

so if BC issued a DN, that gives them the 'option' to default the account

it doesn't mean they 'have to'.

 

bit crass that they took almost a year to do it

but, theres nothing written in stone, that they've done nowt wrong.

 

there used to be guidance by the ICO that indicated creditors should default within 6 mts of the 'offence'

 

however, its telling that the recently updated ICO guidance, now makes no such reference.

 

have you ever politely written to BC asking nicely if they would consider moving the defaulted date to one appropriate to the time of you initial difficulties.

 

I think its been achieved before here.

 

slick132 would know better than me

 

but I feel theres no harm in asking

 

I certainly do not think you have any recourse under the legal system mind.

 

dx

[johndeevoy]

If this fell within the remit of the Small Claims Court then I would go ahead and issue proceedings.

 

 

I do not want to risk the costs involved for a County Court action.

 

 

I don't want to waste my time drawing up the legal application to the Small Claims Court if they are going to reject it as a libel case.

 

 

Anyone have any thoughts on this?

[slick132]

Hi JD. This is my take on things, but there are others better qualified to comment.

 

Normally, most court action discussed on CAG would be taken in the County Court. Depending on the nature and size of the claim, the case would be allocated to the Small Claims Track, the Fast Track or the Multi Track.

 

Libel or defamation would be started in the High Court where the associated costs make this remedy out of the reach of many folk.

 

Rather than sue for defamation in the High Court, you could sue for damages, to be decided by the judge, in the Claims Court on the Small Claims Track (limited to £10K).

 

Cases to see are Kpohraror v Woolwich Bldg Socy and Durkin v DSG Retail.

 

However, before you go anywhere near a court, you need to know if you have the basis of a claim, AND a good chance of success. Even if you threaten Barclays with litigation, they are not likely to take you seriously until they receive a claim form.

 

In your case here, I don't see that you have a clear case for court. It may be that BC were slow to report the default on your CRA files. But that does not mean you have the right to claim damages.

 

Apart from this DN, do you have any other defaults or late payment markers showing on your CRA files.

 

[johndeevoy]

I've decided to go ahead and issue a Small Claim in the Northern Irish Courts. Here is my draft particulars. I guess I don't need to be as specific with quoting legislation etc as would be expected in the County Court system. It will cost me £100 to issue the Small Claim and there are no other legal costs allowed for either side. So if Lowells want to defend this they will have to pay for a Northern Irish solicitor to do it and those costs will be unrecoverable even if I lose.

 

Just thought I would post it here in case anyone wants to read and offer suggestions or advice. I plan to submit tomorrow.

 

OVERVIEW

 

I make this application to the Court seeking an order under the Data Protection Act 1998, or any other such Order as the Court sees fit, to remove reference to a disputed debt including a “Default” marker which has been placed on my credit file with the credit reference agencies, Experian, Equifax and Call Credit. The alleged debt information and “Default” marker are under the control of the Defendant.

 

The Default was placed on 28/01/2010 in relation to a credit card account with Barclaycard dating from 2003 with an alleged sum of £xxxx owing.

 

My case is that I have no financial obligation to the Defendant or their principles, that the Defendant has no lawful right to place the Default, and that the Default is invalid in accordance with the Fourth Principle of Accuracy contained within Schedule 1 of the Data Protection Act 1998.

 

The Default indicates to prospective creditors that I am currently “in default” of my financial obligations, which is untrue. This has caused me to be refused financial products despite my credit record being otherwise “Excellent” with a score of 965 out of 1000 with Experian.

 

HISTORY

I suffered a number of personal issues in 2006, (i explain some to the Court here but delete from this post).

 

I was unable to make payments and fell into default on some of the accounts. I believe some of the accounts were actually taken out by my ex-partner but bearing my name. I discovered an internet forum in 2008 that offered a lot of information regarding financial legislation so I began to query the debts that were being demanded of me.

 

On 19/08/2008 I wrote to Barclaycard under s78(1) Consumer Credit Act 1974 requesting a copy of the executed agreement for the account in question. They sent me a photocopy of a generic T&C booklet. There was not even a place on this booklet which could carry the signatures of the parties and it was not in the prescribed form according to s61 of the 1974 Act and subsequent regulations. I wrote to Barclaycard on 24/09/2008 advising that this was not a true copy of the executed agreement and that I considered them to be in default of their statutory obligations, and that the agreement was unenforceable while they remained in default.

 

A series of letters was sent between myself and Barclaycard during 2008 and 2009 regarding the dispute over their s78 duties. These letters are marked EXHIBITx in the bundle. My goal was to decide whether or not Barclaycard held an agreement that was enforceable in law. I wished to perform an analysis of whether the agreement was in the prescribed form and content according to the 1974 Act and crucially whether it contained my signature, as under s123(3) of the 1974 Act a Court cannot enforce an agreement that was not in the prescribed form and signed by the debtor.

 

To this end I wrote to Barclaycard on 29/08/2009 enclosing £10.00 as the statutory fee under the Data Protection Act 1998 asking for full disclosure of all documentation held about me. See bullet points within letter marked EXHIBIT2a. I asked them specifically to state whether or not they were in possession of the original credit agreement bearing both parties signatures. Barclaycard replied, EXHIBIT 2b, enclosing a bundle of documents none of which was a copy of the signed agreement, and they also ignored my specific query regarding their possession of a signed credit agreement. This is an important point as I quote from OFT guidance document published in 2010, OFT1272 “Guidance on sections 77, 78 and 79 of the Consumer Credit Act 1974”:

5.5 The OFT considers that a creditor should not, either by act or omission, mislead a debtor as to the enforceability of an agreement. To do so is an unfair or improper business practice and is relevant to the creditor's or owner's fitness to hold a licence under the CCA. It may also be an unfair commercial practice under the Consumer Protection from Unfair Trading Regulations 2008.

 

At no time did Barclaycard, their agents, or subsequent purchasers of the alleged debt, ever provide any evidence of a properly executed credit agreement signed by me. Letter from the Defendant dated 27/01/2015 EXHIBIT4 indicates that they were unable to obtain proof of agreement from Barclaycard and as such are no longer pursuing the alleged debt.

 

ARGUMENT 1

 

This dispute relates to an alleged consumer credit agreement dating from 2003. The relevant Act is the 1974 Consumer Credit Act and s127(3) of that Act is in play. s127(3) was repealed by the Consumer Credit Act 2006 but not retrospectively for agreements entered into prior to 6th April 2007.

 

I believe the form, content and consequence of s127(3) to be well known so will summarize same by saying that it is a limitation on the enforcement powers of the Courts in relation to relevant credit agreements where the creditor cannot prove that the debtor signed the credit agreement in accordance with s61(1) of the Act.

 

In Wilson v Secretary of State for Trade and Industry [2003] UKHL 40, [2004] 1 AC 816, [2003] 4 All ER 97 Lord Nicholls said:

"72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security.

 

Much development in case-law in recent years can only be applicable to post April 2007 agreements where the Courts have full and unrestricted powers of enforcement. The logic and reasoning behind the decisions in some of the more significant cases e.g. McGuffick v RBS [2009] EWHC 2386 (a lender retains rights to process defaults where an agreement is “temporarily” unenforceable) and Carey v HSBC [2009] EWHC 3417 (a lender can satisfy his legal obligations under s77-79 of the Act by recreating or reconstructing a version of the credit agreement) is difficult to reconcile within a pre-2007 legal framework where s127(3) of the 1974 Act is in play. Within such a framework, which is the relevant framework for resolution of this dispute, the decision in Wilson reigns supreme and falling foul of s127(3) means that the creditor loses all rights under the agreement.

 

A creditors right to share information with credit reference agencies is contractual in nature, it is granted under the terms of the credit agreement and if the creditor “loses all his rights under the agreement” then this includes the right to share information about the alleged debt with the credit reference agencies. Of course this extends to any agents and to any purchaser of the alleged debt.

 

I contend that the Defendant in this matter purchased thin air from Barclaycard as no debt was ever proven to have existed against me. The purchase of thin air does not grant the Defendant the right to place markers on my credit reference file indicating that I am “in Default” of any financial obligations.

 

In summary, my argument is that at no point in the 6 years subsequent to my raising a dispute did Barclaycard or any of their agents produce any evidence of a properly executed credit agreement. In particular Barclaycard fall foul of s127(3) and they therefore have no rights under the alleged agreement which includes the right to process information with credit reference agencies. The Defendant did not therefore acquire these rights when they purchased the alleged debt.

 

ARGUMENT 2

 

My last payment was made on 29/12/2008 and I have not acknowledged any debt since that date. See copy statements marked EXHIBITXXX. Under the Statue of Limitations, Barclaycard had 6 years (until 29/12/2014) to initiate action to prove the existence of and recover the debt they claim is owed. This avenue is now closed. No debt was ever proven to have existed and the alleged credit agreement is now irredeemably unenforceable.

 

In Grace & Anor v Black Horse [2014] EWCA Civ 1413, the Court of Appeal held that it is a breach of the fourth data protection principle of accuracy for lenders to report debtors as “defaulters” where the debt in question is irredeemably unenforceable. In such circumstances no legal obligation rests on the alleged debtor to make any payment, therefore it is not possible for alleged debtor to be in “default”.

 

ARGUMENT 3

 

If my previous arguments fail then I would make one final appeal to the Court based again on the fourth Data Protection Principle of Accuracy. I question the accuracy of the Default date of 28/01/10.

 

I stopped making payments on 29/12/2008 and Barclaycard issued me with a Default Notice via their agents Mercers on 02/04/2009 (see EXHIBIT 3x). The delay until 28/01/10 before recording the Default with the CRAs is unexplained and unacceptable. Some creditors, when they know that a debtor is facing multiple defaults, will delay in placing their Default in order to stretch out the pain for the debtor as a means of coercing payment. This is against Information Commissioners Office guidelines that a Default Notice should be placed within 6 months of the last payment unless there are special circumstances to consider, of which there are none in this case. Please see EXHIBITXX which is text taken from the 2014 ICO published guidelines.

 

It is not accurate to state that I defaulted on this account on 28/01/2010 when my last payment and acknowledgement of the debt was on 29/12/2008. According to the ICO guidelines the very latest date that the Default should have been placed was 29/06/2009.

----------------

 

ATTEMPTS TO RESOLVE

I have written to the Defendant and directly to the main Credit Reference Agency, Experian, and the general response has been that the Defendant contends that the Default has been placed correctly and will not remove same, even when confronted with the very clear direction from the Courts in Grace v Black Horse. See correspondence marked EXHIBITXXX.

 

PERSONAL IMPACT

My financial difficulties were caused by a tsunami of extreme personal circumstances occurring in a short space of time. That time has passed and my credit file is now clean apart from the disputed Default. The Default is not an accurate indicator of my current creditworthiness.

 

My partner and I noticed a possibly once-in-a-lifetime opportunity to purchase a property in our ideal location at an affordable price. I submitted an application to HSBC to open an Advance bank account which is a pre-requisite to their Buy-to-let mortgage products (which I need to rent out my current home) and to their best mortgage rates including a £1500 cashback on mortgage purchase. I was denied due to “adverse credit”. See documents marked EXHIBIT5.

 

At present I am in discussion with a local bank where the product fees are much higher than HSBCs (approx. £1300 over the two mortgage products I need) with higher rates and no cashback offer. It may well be the case that I am denied all “high-street” mortgage products and will be forced to take a “bad-credit” mortgage with rates of triple those in the high-street along with even larger product fees. The potential worst case scenario is being unable to secure a mortgage product at all and missing out on the home purchase opportunity which would be a detriment in the range of tens of thousands of pounds. I am willing to forgo any excess and seek compensation up to the amount of the limit of the Small Claims Court of £3000.

[slick132]

Hi JD,

 

Before you steam ahead, please wait and see if we can get you some advice about starting a court claim using the N Ireland court system.

 

I'll flag this for attention.

 

[johndeevoy]

Cheers slick, it would be good to get some feedback/advise, however, I'm quite happy to go ahead and give the Small Claim Court a shot now that I have done the hard work in research, drafting particulars and scanning and printing a bundle of supporting paperwork. As far as I am concerned the worst that could happen is that the Small Claims Court will reject the claim or pass it up to the County Court where the risk of having to pay legal costs becomes a factor if I lose.

 

In terms of strategy, I am happy to issue proceedings while risking only the £100 small claim fee, as I think Lowells would be absolutely mad to try and defend this. I fully expect them to offer to remove the default for me to withdraw the claim.

 

I posted the content of the particulars here in case I had missed something that someone could add that may be beneficial to my case. I know a few guys have posted saying they don't think I have a case, I obviously disagree with them as set out in my arguments so I don't really want further debate as to the merits or otherwise of my case, only feedback on something I may have missed or got completely and factually wrong.

 

Thanks!

[slick132]

Hi JD,

 

My limited understanding of the N Ireland system is that your claim will be lodged in the County Court. The likelihood is that it'll be allocated to the Small Claims Track which limits claims to £3K, as you've already said.

 

[steampowered]

How much is the disputed debt?

 

In order for you to win your claim, it is at least necessary for you to show that the underlying agreement is not enforceable. As you are effectively disputing the whole debt, then if the debt is more than 3k it seems to me that the amount in dispute would be more than 3k (regardless of how much you are claiming in damages) in which case you can't be sure of ending up in small claims.