Cap1 & CCA return

[AnimalMagic]

Back to the subject of s140 and mortgages prior to Oct 2004... I am trying to understand if mortgages prior to Oct 2004 are subject to the s140 unfair relationships legislation

 

s16 appears to exclude mortgages, but the OFT are still saying the only exemption is FSA regulated mortgages, in an email dated 14 July 2010... Confusion reigns...

 

If mortgages are already excluded by s16 CCA, then why introduce a new exclusion for regulated mortgages?

 

Also found this:

13 Debtor-creditor agreements

A debtor-creditor agreement is a regulated consumer credit agreement being—

the operative word being 'regulated'. A mortgage prior to Oct 2004 is not regulated by FSA or by CCA...

The exemptions specifically state:

16 2 (b) a debtor-creditor agreement secured by any land mortgage

Am I reading this correctly, that 16 2 (b) exemption applies only to a CCA regulated agreement secured on land? and not a mortgage?

 

Also if mortgages are excluded how did Bentley have a case...?

Edited July 16, 2010 by AnimalMagic

[AnimalMagic]

Finally found the missing bit

 

(2) In section 16 of that Act (exempt agreements) before subsection (8) insert—

“(7A) Nothing in this section affects the application of sections 140A to 140C.”

[Peterbard]

Back to the subject of s140 and mortgages prior to Oct 2004... I am trying to understand if mortgages prior to Oct 2004 are subject to the s140 unfair relationships legislation

 

s16 appears to exclude mortgages, but the OFT are still saying the only exemption is FSA regulated mortgages, in an email dated 14 July 2010... Confusion reigns...

 

If mortgages are already excluded by s16 CCA, then why introduce a new exclusion for regulated mortgages?

 

Also found this:

the operative word being 'regulated'. A mortgage prior to Oct 2004 is not regulated by FSA or by CCA...

The exemptions specifically state:

Am I reading this correctly, that 16 2 (b) exemption applies only to a CCA regulated agreement secured on land? and not a mortgage?

 

Also if mortgages are excluded how did Bentley have a case...?

 

Just a point but if the mortguage is over 25k it will not be covered by the act anyway of course

This may also explain the mention of exclusion for mortguages now coming under regulation due to the lifting of the limit

 

Peter

[AnimalMagic]

Just a point but if the mortguage is over 25k it will not be covered by the act anyway of course

This may also explain the mention of exclusion for mortguages now coming under regulation due to the lifting of the limit

 

Peter

 

AFAIK The 2006 act removed the 25k limit. FSA regulated mortgages were specifically excluded to avoid double regulation for this reason, but everything else is covered.

 

16 (7A) Nothing in this section affects the application of sections 140A to 140C.

Unless you know something I don't...?

[Peterbard]

AFAIK The 2006 act removed the 25k limit. FSA regulated mortgages were specifically excluded to avoid double regulation for this reason, but everything else is covered.

 

Unless you know something I don't...?

 

Well exemption may be granted on application to the regulator as per some buiding societies banks but perhaps you new that as well

 

Come to think of it there are many more things , small loans, loans that are of a particular type and have 0 charge for credit.I will thik of some more and let you know.

 

Peter:D

Edited July 18, 2010 by Dodgeball

[Peterbard]

Hi

Apologies if this has been covered on here before, but I have not been here for a bit.

 

DOUGLAS NAPIER v. HFC BANK LTD TRADING AS THE GM CARD, 31 March 2010, Sheriff D. Kelly

As you will see it is a Scots judgement but it discusses something that has been a bit of a grey area in respect to exactly what the prescribed terms and particularly the “credit limit” on credit cards actually mean in respect of the CCA and enforceability.

As you will see the Pusuer (plaintiff )says that the agreement is not properly executed because the credit limit does not conform with the requirements of schedule 6 “A term stating the credit limit or the manner in which it will be determined or that there is no credit limit.”

The requisite section of the agreement just saying” Your Credit Limit will be determined by us from time to time and notified to you."

This as you will know is quite common in other cards I don’t know if has been tested here but anyway.

The judgment seemed to hang on the judges take on the word “manner” in the schedule 6 definition.

In finding for the bank he reasoned that Manner in this sense meant the manner of communicating the information to the debtor, rather than the manner in which the figure was reached.

This then of course lets the creditor off the hook.

As an aside he links the schedule 6 definition to the definition given in schedule 1 saying that the two are complimentary.

Personally I think this is another case of reinterpreting the legislation to the advantage of the creditor.

Surely the debtor would have the right to know what criteria would be applied in setting there credit limit.

I think that there are pre-contractual issues here also, if you are shopping around for a credit card you need to be aware of all information in fact the act is designed to see that you are.

These days a major part of the decision as to whether to apply or not must be the likelihood of success of the application.

Apart from the embarrassment involved there is the matter of the negative marker on your credit file or at least the record that a request has been made and no account exists which to a future creditor amounts’ to the same thing.

Being able to asses the likely hood of making a successful application by looking at the agreement you are signing seems to me to make sense.

Also, and I must say that most of the consumer organisations are with me on this, I think that agreement for credit card should always be issued with a fixed credit limit on the agreement you sign.

The legislation does not support this at the moment as we have just said, this means that the creditor will make the maximum offer of credit that he thinks the debtor is likely to be able to bear, commercially this of course makes sense.

Many of the more savy consumers are wise to this now, we don’t want to be walking about with ten grand’s worth of available credit in our pockets, the lure and instant gratification of that HD TV or new Kitchen is just to strong for most of us to resist. Some of us just want a card we can use to top up the petrol with or make use of to purchase on line and take advantage of the section 75 protection, in short credit may be like a piece of string but we know how long our piece of string is.

Peter

[Peterbard]

Well exemption may be granted on application to the regulator as per some buiding societies banks but perhaps you new that as well

 

Come to think of it there are many more things , small loans, loans that are of a particular type and have 0 charge for credit.I will thik of some more and let you know.

 

Peter:D

 

Heres some more

some second charge mortgages, depending upon the nature of the agreement and the identity of the lender

agreements for goods or services where the consumer has to repay the credit within one year in four payments or less

charge cards and similar agreements where the consumer has to repay the outstanding balance in full at the end of each period

credit union agreements where the APR does not exceed 26.9 per cent

credit agreements offered to a limited group of borrowers where the APR does not exceed a specified 'low cost' rate (set by reference to average base rates)

certain agreements relating to overseas finance.

The 2006 Act introduces two new categories of exempt agreement:

lending to high net worth individuals, with net income exceeding £150,000 or net assets exceeding £500,000 and supporting documentation

business lending over £25,000, where the loan is wholly or predominantly for business purposes (business lending up to £25,000 remains regulated).

These new exemptions are set out in sections 16A and 16B of the 1974 Act (as amended) and the Consumer Credit (Exempt Agreements) Order 2007

 

I thnk there are a few lore in some SI i have some where i will post them also

 

Peter

[AnimalMagic]

Thanks Peter.

 

My conclusion is that s140A-D is a powerful bit of legislation for the consumer which applies across the board. I'm having difficulty understanding why more people are not using it...

[Peterbard]

Thanks Peter.

 

My conclusion is that s140A-D is a powerful bit of legislation for the consumer which applies across the board. I'm having difficulty understanding why more people are not using it...

 

Hi Yes

since reading your post i have been trying to get my head arround the transitional arrangements in the 2006 regarding these provisions.

 

still not really sure how it applies to exististing aagreements/unregulated agreements.

 

I will continue to study,in the mean time if anyone would like to enlighten me i would appretiate any information its all a bit convoluted.

 

Peter

[AnimalMagic]

As I understand it, existing agreements are covered, but only insomuch as the unfairness manifests after the act becomes law. So if one is treated unfairly prior to 2006, then you can't make a case, but if the creditor continues the unfair treatment after april 2008 (I think), then you can make a case.

 

Feel free to correct me if you think I'm wrong

[Peterbard]

Hi Yes thanks for that

 

I am particularily interesd in this section in relation to the high interest loans currently on the market, which if you read elswhere on here are causing all kinds of problems(Pay day loans etc)

 

These as i understand it are exempt agreements because they are repayed in one installment as per my earlier post, however they i think are still covered by this section of the act.

Appretiate any thoughts

[Peterbard]

found this

Section 21: Interpretation of ss.140A and 140B of the 1974 Act

50. Section 21 inserts a new section 140C after the new section 140B (inserted into the 1974 Act by section 20). The new section 140C defines the types of agreements that are covered by sections 140A and 140B. Any agreement that involves the provision of credit to an individual, whether or not regulated by the 1974 Act (except as specified (see paragraph 48 above)), is covered. The sections also cover, through the definition of “related agreement”, the practice where the creditor enters into successive credit agreements with a debtor for the purpose, for example, of increasing the total amount of the debt or obtaining multiple fees from the debtor for setting up each loan.

The ssection 48 is land agreements

Other exempt agreements are it seems covered

Peter

[AnimalMagic]

The ssection 48 is land agreements

 

Just to clarify, that applies to mortgages regulated by FSA under FSMA i.e. mortgages after Oct 2004...

[Shilp1]

Hi All,

 

I thought I would let you know a very important development in the unenforceabilty of Consumer credit Agreements on Interest rate breaches.

 

There was a recent CMC meeting and although the arguement was that consumer agreements breached terms of the consumer credit regulations and there was evidence to support this which made it irredemebly unenforceable.

the banks argued the point that as long as they stated a rate of interest then they complied. this meant even ifthe calculations are incorrect they comply because they stated a rate of interest.

 

The short of it is that the court favoured the Bank and have yet to hand a wwritten judgement.

 

I think as consumers we really need to become more active and bring this to the forefront of the media as it is always the banks that are being bailed out and us left out of pocket.

 

What we need is ideas and ways of bringing this to the media and getting acampaign together to go against the decisions.

 

Any suggestions would be great .

 

Thanks

.

[pt2537]

your referring to the northern rock case arent you

 

im aware of the judgment, and as far as i know the court didnt actually say that the rate can be wrong but that as long as a rate to be applied to the credit was stated.

 

Certainly my reading of the case and the reports surrounding it

[means2anend]

But if that were to be applied then misstatements would be allowed even if the prescribed term was present...and I would have thought that the substance of that term is what would confuse customers into thinking that cost was one thing when in fact it was another...goes against the concept of ''truth in lending'' the core!!!

[Shilp1]

I am not talking anout Northern Rock case I am taking about a CMC that took place last week and really I do need suggestions on how we can highlight this an=in the media and get campaigns together otherwise truly there will be no cases it does not affect PPI cases just interest rate breaches.

[Peterbard]

Hi All,

 

I thought I would let you know a very important development in the unenforceabilty of Consumer credit Agreements on Interest rate breaches.

 

There was a recent CMC meeting and although the arguement was that consumer agreements breached terms of the consumer credit regulations and there was evidence to support this which made it irredemebly unenforceable.

the banks argued the point that as long as they stated a rate of interest then they complied. this meant even ifthe calculations are incorrect they comply because they stated a rate of interest.

 

The short of it is that the court favoured the Bank and have yet to hand a wwritten judgement.

 

I think as consumers we really need to become more active and bring this to the forefront of the media as it is always the banks that are being bailed out and us left out of pocket.

 

What we need is ideas and ways of bringing this to the media and getting acampaign together to go against the decisions.

 

Any suggestions would be great .

 

Thanks

.

 

Hi

The interest rate on a fixed sum agreement has never been a prescribed term so it has always only been a section 65 matter and down to the court to decide if to issue an enforcement order.

The main thing is ,that in pre 2007 agreements the Total Credit, APR, repayment rate and interval calculation is correct, if not then it will still be unenforceable under section 127(3) it would take a change in legislation to alter that.

Peter

Edited July 21, 2010 by Dodgeball

[means2anend]

I am not talking anout Northern Rock case I am taking about a CMC that took place last week and really I do need suggestions on how we can highlight this an=in the media and get campaigns together otherwise truly there will be no cases it does not affect PPI cases just interest rate breaches.

 

CMC is a way off from a decision is it not..and even if it were at CC level it would not mean anything...Anyway there already exists case law Burchell V Thompson being one of them that says opposite....''document read as whole should not instill confusion in the mind of the reader'' or something to that effect

[Shilp1]

I am explaining to you that yes I agree what CMC is however there is a judgement that has been made as the judge knows that if they agree to favour the law they would open up a floodgate of claims and you know at the end of teh day given the economic situation the banks will always be favoured. At the end of the day I am only trying to rally up surrort and ideas on how we can bring the issue and give it more media exposure and maybe the judges can see that they cannot continually get away with favouring the Banks.

 

I am just informing yu of latest developments and asking for people help and idea maybe im on the wrong thread as I am new to this.

[means2anend]

Shilp1

 

My apologies if it seemed I was ''having a go'' I sincerely hope that that was not the impression.

 

Was the CMC at CC level or HC level?

[Peterbard]

Hi

 

Sorry and with the greatest of respect but this is not making a lot of sense

Interest rates are not even required on pre 2005 agreements.

 

Do you have a link that relates to this meeting.

 

Peter

[stevehatesbankers]

A tad controversial but I wouldnt be surprised if some of these CMC's are now on the banks payrol to rollover gently. They have gone from being aggressive and confident to pussycats within the space of 6 month. They are only interested in easy pickings such as reclaiming PPI

[means2anend]

CMC=Case Management Conference not Claims Management Companies...in this context I believe???

[stevehatesbankers]

Apologies. A misunderstanding but I still stick by my comments.