Debt Collection Agencies & Consumer Credict Act 1974

[tbern123]

I have read on various threads that there are two trains of thought in relation to the requirement of DCA's to provide documentation under the CCA, as the original agreement was defaulted.

 

I think we all need to do some research in this area to ascertain the correct legal position.

 

I am of the opinion that they do have to provide documentation and I will set out my argument below.

 

Let's start with the Credit Consumer Act, it states:

 

9. Meaning of Credit

(1) In this act "credit" includes a cash loan, and any other form of financial accomendation

 

77 Duty to give information to debtor under fixed-sum agreement

 

(4) 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 and -

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

 

78 Duty to give information to debtor under running-account credit agreement

a) state of account, and

b) the amount, if any, currently payable under the agreement by the debtor to the creditor

 

(6) 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 and -

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

 

97. Duty to Give Information

(1) The creditor under a regulated consumer credit agreement, within the the prescribed period after he has received a request in writing to that effect from the debtor, shall give the debtor a statement in the prescribed form indicating, according to the information to which it is practical for him to refer, the amount of the payment required to discharge the debtor's indebtedness under the agreement, together with the prescibed particulars showing how the amount is arrived at.

 

(3) 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 and -

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

 

145 Types of ancillary credit business

(1) An ancillary credit business is any businessso fair as it relates to -

(d) Debt Collecting

(7) Subject to 146 (7), debt-collecting is the taking of steps to procure payment, of debt due under credit consumer credit agreements or consumer hire agreements.

 

189. Definitions

"Creditor" means the person providing credit under a credit consumer agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit, includes the prospective creditor'

 

My ending argument is that, if a debt sold to a DCA is no longer covered by the CCA, how can a DCA place a DEFAULT on a credit file ? How can you default on a non-existing or terminated agreement ?

 

How do other people interpret the legal position of DCA's and how do you support your argument ?

 

Either the agreement is still in place (requiring them to provide documentation), allowing them to place a default on a credit file or they have illegally put a default on a credit file.

[nathal]

a dca have to provide the original agreement

 

what makes you think a dca dont have to comply with cca

[tbern123]

Some of the posts I have read, state that once a debt as been sold to a DCA the consumer credit agreement is terminated.

 

For example the letter from Link Financial and Zootscoot's comments on this thread

 

http://www.consumeractiongroup.co.uk/forum/debt-bailiffs-advice/43409-link-financial-cca-request.html#post345424

[nathal]

well, i think the matter needs alot of clarification, but when i sent cca request, i contacted fsa for non compliance.

 

Fsa would have took further action on not providing a signed agreement.

 

but as fsa say, there is nothing to say they have to provide the deed of assignment, after providing all nuggets of info about acts that have been posted

[tbern123]

well, i think the matter needs alot of clarification

 

lol, that is why I started this thread to try and get the definative answer

[nathal]

there are so many arguements, but when i passed it to the fsa, i got his email, so if you need a specific question answered i will forward it to him.

[tbern123]

there are so many arguements, but when i passed it to the fsa, i got his email, so if you need a specific question answered i will forward it to him.

 

Simple, question really. Once a debt has been purchased by a DCA, does all the original creditors obligations under the CCA pass onto the DCA ?

[lookinforinfo]

Ok-let's look at it from the dca's point of view-using your examples.

 

1] Fixed sum agreement.

The dca has purchased a £5000 debt say for £600, which whilst he may try and

go for the whole amount, would probably settle for £1500 if paid within days.

That could hardly be described as a fixed sum and so the dca would not need

to respond to a debtors query in this case? Additionally, there is no credit

agreement between the dca and the debtor. The dca has not given the debtor

any credit, he has bought a debt, so no fixed sum agreement exists.

 

 

2] running account

As above, the dca has bought a debt, and has no credit agreement with the debtor

so no need to respond to the debtors query?

 

3]regulated credit agreement

 

Nor is this a regulated credit agreement-so no need to respond?

 

There is no agreement initially between the dca and the debtor when the debt

is first bought. The dca has to contact the debtor, explain that he owns the

debt and pushes the debtor to come to an arrangement. Until the debtor has

done that eg said they would pay x amount per month/ week whatever, and then

defaults the dca on the payments, I do not believe the dca can register a

default.

I raised that point on another thread, remarking that by so registering a default

immediately [ [often before even establishing if the debt matches the debtor]

both companies run the risk of breaching the CCA. I suppose that an additional

charge of defamation might be more difficult if the person named already is a defaulter/debtor.

[tbern123]

 

There is no agreement initially between the dca and the debtor when the debt

is first bought. The dca has to contact the debtor, explain that he owns the

debt and pushes the debtor to come to an arrangement. Until the debtor has

done that eg said they would pay x amount per month/ week whatever, and then

defaults the dca on the payments, I do not believe the dca can register a

default.

I raised that point on another thread, remarking that by so registering a default

immediately [ [often before even establishing if the debt matches the debtor]

both companies run the risk of breaching the CCA. I suppose that an additional

charge of defamation might be more difficult if the person named already is a defaulter/debtor.

 

Thank you... This is exactly what I am getting at.... As stated in my Cabot thread. Kingshill No1 Limited have put a default on my credit file. However, like so many people on here. No one have ever received any letters or had communication directly with Kingshill.

[Turnaround]

You would have to admit that Zootscoots knowledge in this area appears to conflict with the judges interpretation of the CCA, when they throw the debt out because it is not properly documented.

[Turnaround]

Zootscoot To continue......

 

As I was saying from the other thread, my case was thrown out because they didn't provide the requested CCA documention. In other words didn't provide the true signed copy of the original agreement or deed of assignment

[zootscoot]

Do you have a thread on this?

[Turnaround]

No, this was sorted prior to joining this forum

[tbern123]

Thinking about this from a contractual perspective.

 

A defaulted agreement is not a terminated agreement.

 

Even if a default notice is issued, it does not automatically result in the agreement being terminated.

 

As previously stated, when a debt is sold (without the agreement being terminated) the obligations of the original creditor are passed onto the DCA.

 

Would you agree Zoot ?

[zootscoot]

In other words didn't provide the true signed copy of the original agreement or deed of assignment

 

They are not obliged to send either of these under the CCA. I wonder why the judge struck it out? Was this in relation to a debt that you owed or was it a matter of mistaken identity?

[tbern123]

Please don't this thread personally Zoot...

 

I am just trying to get my facts right.....

[zootscoot]

Thinking about this from a contractual perspective.

 

A defaulted agreement is not a terminated agreement.

 

Even if a default notice is issued, it does not automatically result in the agreement being terminated.

 

As previously stated, when a debt is sold (without the agreement being terminated) the obligations of the original creditor are passed onto the DCA.

 

If the agreement is defaulted this will give the creditor the right to terminate the contract, but they do not have to. Some credit agreement terms contain a provision stating all the sums owing have to be paid immediately in the event of default. In which case the creditor could be enforcing this term rather than teminating the contract when asking for immediate payment. Which would mean when the debt is sold the CCA will still apply.

[tbern123]

I think this is what causes the confusion...

 

I need to find out if the original credit agreement was terminated.

 

Thanks for your help Zoot

[Turnaround]

It was a matter of mistaken identity. Chasing the first Joe Bloggs that answered.

[zootscoot]

It was a matter of mistaken identity. Chasing the first Joe Bloggs that answered

 

 

That would explain why it was thrown out!

 

I need to find out if the original credit agreement was terminated.

 

Thanks for your help Zoot

 

Best of luck with sorting this one out

 

Zoot

[Turnaround]

Quote:

 

It was a matter of mistaken identity. Chasing the first Joe Bloggs that answered

 

 

 

That would explain why it was thrown out!

 

Why?

[zootscoot]

They obviously did not have sufficient information to prove you owed them any money.

[lookinforinfo]

Tbern you agreed with one of the points I made, but totally ignored the other-and it

was the first one you asked. As far as I can see,it is hard to see much that

would indicate that dca's acquiring a debt have any obligation to supply details

of the transfer. Indeed it appears to be the duty of the original creditor to

inform the debtor of the change of ownership.

 

As regards the posting of a default before an agreement has even been set, there

is a long winded method of resolving the matter with the cra as recorded in

sections 1589 and 160 of the CCA.

First complain to the cra that no default between one self and the new creditor has

ocurred because a repayment agreement has not yet been set up, and so no

payments have been missed therefore the account is not in default, so please

remove the default. The cra has 28 days in which to respond. If the cra decides

not to remove it, the debtor can apply to the OFT [though there is a fee to pay]

to appeal against the decision of the cra and ask that the OFT decide if

the default should stand. If the answer is no, then in view of the payment made,

one would expect that the OFT would advise on what penalty is suitable for

both the cra and the dca for displaying an unwarranted prejudicial statement.

[tbern123]

Ok, for the sake of argument a credit agreement is assigned to a DCA without being terminated. If that DCA then is unable to provide a copy of the agreement and did not provide a statement of the account, following a CCA request. Is it possible to claim compensation under the CCA 1974. I know under the DDA there are provisions for compensation, but I am unsure about the CCA

 

Any advice would be great...

[tbern123]

Tbern you agreed with one of the points I made, but totally ignored the other-and it

was the first one you asked. As far as I can see,it is hard to see much that

would indicate that dca's acquiring a debt have any obligation to supply details

of the transfer. Indeed it appears to be the duty of the original creditor to

inform the debtor of the change of ownership.

quote]

 

Sorry lookinforinfo, just had a quick read, what did I ignore so that I can take another look thanks