Cap1 & CCA return

[tamadus]

Most of us are now aware of the effects of non compliance with a consumer Credit Act section 77/78 request. I would like to try and clarify the result of a s78 (1) request I recently made.

 

The company concerned responded 12 days before it went to the poition of committing a criminal offence, however what they have sent me is a copy of the original application and is clearly marked as an application. Its my feeling an application shouldn't be considered as a regulated agreement under the CCA. I am certain (but cannot immediately find the detailed description of the form a regulated agreement should take) that the heading on the agreement should clearly state 'Credit Agreement' (or words to that effect).

 

Also on the copy of the application they have sent I added a second card holder (authorised user)with a different surname to mine. Underneath the authorised users signature it clearly states Authorised users must have the same surname as the applicant.

 

I am now wading through the CCA (1974) trying to clarify these points and came across something interesting in section 85, and I quote.

 

85 Duty on issue of new credit-tokens

 

(1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement(if any) and of any document referred to in it.

 

(2) If the creditor fails to comply with this section-

 

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

 

(b) if the default continues for one month he commits an offence.

 

(3) This section does not apply to a small agreement.

 

Now by definition a credit card has to be a credit-token. The CCA clearly states that a copy of the executed agreement has to be supplied to the debtor prior to its use and the debtor has a 'cooling off' period. I read section 85 as meaning that any time the creditor replaces or issues a replacement card a copy of the original agreement has to be supplied with the new card (credit-token).

 

I have NEVER recieved a copy of the agreement when a credit card has been replaced. I may be going over old ground here but has anybody any suggestions on section 85 of the CCA and also on the application form suddenly becoming an agreement and the authorised user having a different surname?

[tamadus]

I fully agree dollies and I am trying to decide now if it's worth persuing. I wonder how many other credit card applications were granted purely on the application form without a clearly marked credit agreement.

 

I have just got a reply to my CCA request to Capital One and its clearly headed 'Credit agreement as regulated by the Consumer Credit Act 1974' along with the terms and conditions and it contains a right to cancel section, along with a section on my rights under the act.

 

My opinion also is that Barclaycard have failed under section 78(1) of the CCA to provide what I asked for and I now need to decide how best to follow it up. My feeling on the application form is that they broke their own (written) rules by allowing an authorised user with a different surname, and that they have also failed under section 85 by not providing a copy of the credit agreement each time a new card was issued. An application form does not constitute a credit agreement, it simply means I applied for one. They did not at the time allow a cooling off period or deliver a copy of the agreement before executing it. They have still not produced a signed credit agreement regulated by the Consumer Credit Act (1974) and what they have produced fails a long way short of the regulations in the act. I need to find out the official version of whats has to be included to constitute an agreement now.

[tamadus]

Thats exactly how it struck me as I read it. The first card issue is ok as its covered by the agreement but subsequent issues without being accompanied by a copy of the agreement put the CC company into a default situation and the agreement becomes unenforceable. One interesting point is that Egg actually put on the back of their card that it may only be used in accordance with current Egg card credit agreement conditions. The other cards I have access to only state (if anything) that its use is in accordance with current terms and conditions.

 

As I see it the original agreement will cover a new card issue, but ONLY if its included with the card issue. Maybe I am wrong so hopefully somebody with more knowledge can correct me.

 

This may be a new can of worms but I am no further along with my application form questions and it's after 2:30 again

 

Since when does an application form become an agreement regulated under the act? Every other agreement I have clearly states it is a credit agreement regulated under the CCA (1974) this application form doesnt give that in any way, shape or form, and clearly states it is an application, although it is signed (almost illegibly) by the branch manager.

 

Ah well just another stage in the Barclaycard saga so I am heading for sleepy land and will continue the quest tomorrow.

[tamadus]

I'd be interested to know what some of the legal seagulls think of what you have brought up.

 

yes so would I and hopefully one or more of them will make a comment soon. The suspense is killing me lol. On the face of it every one of the credit card companies has incorrectly issued replacement cards and the agreement is no longer enforceable.

 

I am also looking at another aspect which makes agreements unenforceable but figured to look a fool on this one first

[tamadus]

The Terminator said:

Either the OFT have sh-t out or they are totally incumbasant to the law.Section 85(1) quite clearly states that each time a new credit token is issued then a new agrreement has to be signed as well.It is ironic in two ways that the CC companys have got away with this for the last 30 years and a poster on a forum has what in my opinion has opened up a can of worms and most proberly the biggest loophole in the act.Barclaycard, Egg, MBNA eat your hearts out coz the terminator is after yer.

 

The act doesn't say a new agreement has to be signed but that the creditor ( card issuer) has to give a copy of the executed agreement with the new token.

 

pugsley said:

SE16090 - Vouchers and credit-tokens: meaning of credit- token

 

Section 142(4) and (5) ICTA 1988

 

A “credit-token” is something which merely has to be produced in order to obtain goods and services without immediate payment. It does not have to be capable of being exchanged for goods or services.

 

A credit-token is “any card token document or other thing”, except a non-cash or cash voucher, which is given to a person by someone who undertakes:

• to supply money, goods or services on credit on its production, for example, a credit card supplied by a retailer or
• to pay a third party for the supply of money, goods or services on its production to that third party, for example, a credit card like a Mastercard or Visa card supplied by a credit card company.

A charge to tax arises where such a credit-token is provided for an employee or a relation ( SE16080) by reason of the employment. For the amount chargeable as an emolument see SE16140.

 

The use of a “credit-token” to operate a machine, for example, a cash dispenser, is deemed to constitute its production.

 

The charge arising from the use of credit-tokens eliminates any argument over whether the payment by an employer of credit card bills run up by an employee is a discharge of the employee's pecuniary liability ( SE00580). There is thus a uniform charge on all employees in these circumstances however the credit card facilities are provided.

 

Thanks pugsley I knew it had to be defined properly somewhere. Having just read the article pugsley found I have a feeling they will get over this by claiming the replacement card is the same token and not a new token. The article mentions activating a card but (and I am probably wrong) I see activation as a clear sign that something about the new card has changed even though the account number remains the same.

 

I do recall a couple of years ago that MBNA took over the credit card side of RBS and replaced all RBS affinity cards with MBNA cards. That must surely come under section 85 as the account numbers, the creditor and the card appearance changed. Lots more research needed still.

 

PhantomReclaimer said:

I'm, not sure it's that simple. You need to research certain things further. You say that a credit card has to be a credit token. Perhaps, but is "credit token" defined in the Act? Perhaps a "credit token" is some arcane iuntrument that you only geta single use of or something? Even if it isn't then perhaps the actual "credit token" is actually the account with a given spend limit and that the card is only evidence of such "token"? If that were the case then new replacement carrying the same account number and expiry date would not be a new token, just replacement evidence of it.

 

Also, what is a "small agreement"?

 

I've never looked at the Act just runnign some stuff off the top of my head.

 

P.

 

If I recall correctly a 'small agreement' is one under £50. The difference between a 'new token' anbd a replacement needs clarifying further I think. Personally I suspect that having to 'activate' a replacement card makes it different in and electronic aspect as the replacement wont work untill such time as it is activated, even though the account numbers remain the same. Also small changes occur which are visible, namely expiry dates, security number, and signature strip has to be signed again. I suppose they could even claim that by signing a replacement card that we actually verify the original agreement.

 

I would definitely class the latest 'chip and pin' cards as new tokens though as they use different technology and no longer require a signature at point of sale. Those IMHO should require totally new agreement as the customer (debtor) is now very vulnerable to fraud usage with no comeback on the creditor.

[tamadus]

when I got a replacement credit card the number (is this the same as the account number?, not sure) of the card has changed for capital one, but the account and balance remain the same.

 

The account number is the 16 digit number on the face of the card. I am sure changing the account number should warrant a new agreement, but need advice from the legal eagles

[tamadus]

Not necessarily. The 16 digit number is the card number and might or might not be the same as the account number.

 

A debit card has a 16 digit number which identifies that particular card but the account number is the card holders bank account number. There are also cases where more than one person has a card for the same account but, for obvious reasons, they can't both have the same number.

 

P.

 

Very true on both counts, thanks for correcting me. 16 digits are used for several reasons, but invariably that number will relate directly to the account number. Likewise a second user on the account will have a different card number bit it relates directly to the primary account. MBNA changed my card number( and should have issued a new agreement I believe) on 2 accounts but both numbers on both accounts can still be referenced directly to the appropriate account. So using the card number will have the same affect as using the real account number.

 

Hmmmm this could present something new. IF my card number isn't the same as my account number (which it obviously might not be) then why haven't they advised me of the real number. In actual fact I have just looked at a credit agreement and no account number appears anywhere on it:confused:

 

Something else that needs researching now

[tamadus]

If you look at the wording of the section the answer is staring you in the face.

 

"In relation to a new credit agreement," when they issue a new card this is just a new piece of plastic, whatever the technology used in it, in relation to the old agreement.

 

It actually doesnt say in relation to a new credit agreement it says

 

85. Duty on issue of new credit-token

 

(1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it.

 

I see this as saying that whenever a new token (other than the first issued on the agreement) is issued a copy of the agreement has to be provided. It obviously has to be provided with the first token issued as that is the start of the new account and agreement.

 

A new piece of plastic is still a new token as it will be invalid once it reaches the expiry date ergo a new token is needed to maintain the running credit agreement. The agreement itself can run as long as desired by either party.

[tamadus]

Sorry whenever in connection with a new credit -token agreement then. If you want to be pedantic.

 

Sorry zootscoot I wasn't trying ot be pedantic, but you know that changing one word in these things can make a huge difference in its meaning. If this really means what I think in law then they have all left themselves wide open to it and I can't beleieve they haven't realised that en-block.

[tamadus]

Tamadus and zootscoot you two are gods Im just about to issue a default notice to MBNA and Humptey Dumptey.Watch this space for the reaction. This just strengthing everybody else's case.I had a lawyer look over what Tamadus posted i.e S85 and his answer is the same as zootscoots" Its staring you in the face"

 

Let us know the reaction please Terminator. I'd love to know what else your lawyer said if you want to PM me

[tamadus]

zootscoot my logic is this.

 

The first token issued starts the agreement and a copy of the regulated agreement will have been sent out with or just before the card(token) is sent.

 

The token has a life span of say 2 years and is replaced at that time with a new token, but NOT a new agreement. The act says that whenever a token is given (issued) by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it. Because the initial token is specifically mention this must be referring to subsequent token or replacements. Therefore if a copy of the agreement isn't given with the replacement token the the creditor is in default.

[tamadus]

The Act states whenever a token is issued in connection with a new credit -token agreement. When a replacement card is issued this is a new credit token but it is not in relation to a new credit-token agreement.

 

But section 85 doesn't mention new agreements, only new tokens and it specifically says a copy of the agreement should be given and thats my point.

[tamadus]

You will be the first to know the reaction.Basically what the lawyer said(and I work in housing litigation) is that from what he can recall their is no case law where this section of the CCA(1974) has been brought up and that the debtor has every right to issue a default notice against the CC company because overall they have not complied with the Act.He has also advised me that it would be possible to register the default and he is looking into this for me.Once I have the information I will be posting it on here.He also advised me that the banks do not like going to court because nine times out of ten they lose even going to the COA.I will provide the following link for everyone on this site.There are two other issues that I brought up and im reading from the notes I made.1) A DCA cannot issue a default notice wither they are acting for a creditor or not.The default notice must be served by the creditor as the agreement is between the creditor and the debtor not the DCA and the debtor.2) Activating a card is purely a security measure and does not allow the CC provider to get around S85 as he would still have to provide a copy of the original agreement for replacement cards.

 

British and Irish Legal Information Institute

 

In the search engine put in the name of a bank and you will see what I mean.This is case law from the COA there may be information there that will help our cause.

 

great news Terminator, I wait with bated breath now

[tamadus]

s85 clearly states 'a copy of the executed agreement(if one exists). That to my mind is a signed copy of the agreement, which has to be clearly marked as being a 'Credit agreement regulated by the Consumer Credit Act 1974' Having the Title 'Application form' or Terms and conditions' does NOT make it a credit agreement. An unsigned copy of the agreement cannot be binding on either party.

 

I agree pcr1 they only need to send a copy of the agreement to remove themselves from default, BUT is a retrospective copy sufficient? s85 clearly states that the act of giving the copy should occur at the same time as giving the new token so they may have to issue new cards along with a copy of the agreement to everyone affected to get out of default.

 

One other thing suddenly comes to mind. If the terms and conditions are an integral part of the credit agreement, then the agreement is unlawful to start with. We know the terms and conditions are unlawful because they include the unlawful charges, hence the agreement must also be unlawful as well.

 

I really am having a terrible time believing that every one of the credit card companies have made this same fundamental mistake.

 

I agree that as long as they are in default they can't make a profit so would have to refund any interest charged.

 

As Terminator says s85 is very clear in its wording (and for once it doesnt send us through dozens of other parts of the act to clarify it). Terminator please make sure you issue the defaults in strict accordance with the act or they will only bounce it back.

 

These companies make millions from their business and should be operating within the laws regulating the business. If they fail to do that then how can we, the consumer, ever trust them? If thus discussion closes the loophole and forces them to become accountable to the regulations then it will have achieved a miracle. If we can't trust those who routinely handle our financial lives on a daily basis then we all have a major problem.

[tamadus]

(snip)

 

The default continues, according to the Act, until they provide the copy of the agreement. This will remove them from default, but whilst they were in default (from sending the new card to sending the copy of the agreement), they cannot enforce the agreement which means they can't demand payment and can't charge interest. They can't then do this retrospectively.

 

So, how about if the default started with a new card say 10 years ago? They would not be happy at having to refund that much in interest and would probably risk going to court.

 

No. Under contract law, if the contract can continue with the unfair term removed then it will. This is the case with these agreements.

 

As the credit agreement is such an important document I would have thought it would have to be re-signed agreeing to the changes. A legal agreement cannot be changed to suit the creditor without being agreed by the debtor. The signatures verify the agreement.

 

As above, it's because they can't enforce the agreement, so can't demand payment and can't charge interest whilst they are in default.

 

Agreed totally

 

It will depend on any case law which the Goode document should answer. I'll report straight back when I've read it; I intend to get to the library this week as I'm away next week.

 

I'll get a copy of this and scan through it as well.

[tamadus]

Thaaat's the gamble!

 

 

 

No, as a remedy to an unfair term, per legislation, the contract will remain in force when the court invalidates the offending terms. Only if the offending term forms such a substance to the contract that the contract cannot possibly continue without it, will the court terminate the contract.

 

It says this in UCTA and UTCCR but I don't have them to hand to quote unfortunately.

 

You're much better off going down the s77, s78 and hopefully even better the s85 route. (I say better because under s85, even if they produce an agreement, they need to refund a fair bit of interest. One of my Barclaycards started July 2003 and doesn't expire till December this year!)

 

 

 

It's reference only and not widely available, so you'll need to sit in the library to read it or copy it (which is what I'll be doing!). I'll post the ISBN/ISSN number when I look it up again, which will probably be tomorrow, if not then Thursday.

 

I have already started down the s78 route with Barclaycard who have just sent me a lovely copy of the original application form from 1979 Just written back to them saying thank you very much but I asked for a copy of the signed agreement as along with everything over 2 years old you failed to supply it under my SAR.

 

The 30 days runs out on 5th October:D

 

If they do manage to surprise me then I might fall back onto the s85 argument and demand they rectify their default (which must date back to about 1980/81)and refund all that interest.

 

Another card from the early 80's also run out of time on the 5th October and they must be running around scratching their heads as they have sent me another 2 copies of data under my SAR from July

[tamadus]

I just got back from my daughters house and mentioned it to her and she thinks she may have a copy at her office. She owns a company that does costings for legal firms so she is going to look tomorrow and let me borrow it if she has it

 

I did a quick search earlier on the net and hit a blank wall.

[tamadus]

I just had a thougt pcr. How about we get both yours and this thread merged for clarity ?

[tamadus]

I have managed to find Goode's Consumer credit law and practice for sale online but I changed my mind about buying it at £768

[tamadus]

I've come up with something which may be of interest.I went through some old papers tonight and stumbled on what could be the key that we are looking for.I've found an old letter from MBUSA which has the following. Top right hand corner replacement card.Then underneath details of activation.Underneath this credit agreement as regultated by the cca(1974) then it go's on about the terms and conditions etc.Then it says copy of agreement for you to keep and a notice about your cancellation rights.T&C continue on the back.The key is that nowhere on the letter is there a signture and it is not a copy of the original executed agreement so I am treating this as a breach of S85.I read the Act again and it is that first line.This is going back to 2000 and basically it is a cancellation form which says only send back if you wish to cancel and tooking through some of the terms very unfair.

 

I am convinced the executed agreement has to be signed, what you have a a standard pre-printed thing so I am inclinded to agree its a breach.

 

I am just having a lot of difficulty believing they have all made such a big and fundamental mistake over s85. They have teams of legal eagles to make sure all this stuff is within the regulations and yet a couple of people on this site stumble onto it ?

[tamadus]

Sadly I have to admit all this has gone right over my head..............I felt the breeze!

But does any of it mean, I can tell Lowell finance that a Application form does not cover a cca request?!

 

dollies, I have today written to Barclaycard telling them that very same thing. The regulations are very clear about the format that the agreement is presented in. It has to clearly say 'Credit agreement regulated under the Consumer Credit Act 1974'

[tamadus]

OH something else that has come up in the last couple of days. Apparently a default notice isnt fully binding unless it is served by hand, but I need to cross check this still. But a couple of people independantly have said it so its very possibly true.

[tamadus]

OH something else that has come up in the last couple of days. Apparently a default notice isnt fully binding unless it is served by hand, but I need to cross check this still. But a couple of people independantly have said it so its very possibly true.

 

Ok forget this bit as section 176 covers service of documents and clearly states that posting a document to the last known address is sufficient to be deemed served.

[tamadus]

It's about 1987-1991ish.

 

Sorry, I have no idea where it is. I remember the judge starting off by saying it was a very sad case, as a good bank-customer relationship had broken down completely.

 

He must be thinking that their are a lot of sad cases now for the same reason.

 

It was over a second mortgage, and I think it was a possession hearing. The judge noted the PPI amount was in the wrong section ("total charge for credit" or amount advance, one way round or the other) and the agreement was therefore unenforceable. He then touched upon the s85 argument but said because of his judgement it was now irrelevant (I think; whatever he said he was right but it was disappointing it wasn't tried).

 

Why on earth dont they include extra things like this in their judgement to save it having to be gone over at some future date.

 

I think I followed the link from a forum when looking for something else. If I find it I'll post it but I've just had an unsuccessful Google for it.

 

 

If

[tamadus]

It's about 1987-1991ish.

 

Sorry, I have no idea where it is. I remember the judge starting off by saying it was a very sad case, as a good bank-customer relationship had broken down completely.

 

He must be thinking that their are a lot of sad cases now for the same reason.

 

It was over a second mortgage, and I think it was a possession hearing. The judge noted the PPI amount was in the wrong section ("total charge for credit" or amount advance, one way round or the other) and the agreement was therefore unenforceable. He then touched upon the s85 argument but said because of his judgement it was now irrelevant (I think; whatever he said he was right but it was disappointing it wasn't tried).

 

Why on earth dont they include extra things like this in their judgement to save it having to be gone over at some future date.

 

I think I followed the link from a forum when looking for something else. If I find it I'll post it but I've just had an unsuccessful Google for it.

 

 

If PPI was included in the Total Charge for Credit then it would make the agreement unenforceable as a case somebody highlighted to me recently showed.