Spinningfish V The Woolwich

[Craftygirl42]

I have also settled an overdraft via mediation just 10 days before a court hearing.

 

Nobody has won really, its just that each side liaise via a third party to come to a settlement and payment plan that both sides are agreeable too. I decided to do it this way as there was little information available as to what documentation the bank should provide when a debt is an overdraft. For my own peace of mind, I decided to go with settling via mediation, had been paying a monthly payment, so the intent to pay was there

[speedtrip]

I am trying to disect this for my own o/d which has over 30% in bank charges. I expect to go down the reg 5 route when we get more guidance from CAG

 

However, i wanted to check undertstanding on the following regarding the net o/d after bank charges as I only got a reply to the SAR when the case was stayed last year.

 

Until the SAR turned up no copies of agreements were forthcoming even though the banks referred to regulated agreement and the Default Notice in the POC. The bank are not able to provide copies of either.

 

What have they provided under court directions :

 

letters confirming overdraft

bank statements

summary of bank charges

transactions carried exceeding the o/d limit

Default/Termination Notice (not available)

Orignal Account Application (not provided)

 

Under a SAR I have more but this is largely duplicated or computer printouts and nothing that looks like an agreement.

 

So what is the regulated agreement they refer to in POC and will rely upon in court.

 

This must be the letters confirming overdraft granted. I have three such copy letters. The first two state the amount in the letter, my name and account number. Page 2 is the T&C. On here it sets out charges, interest and that regular amounts must be paid on a monthly basis. It does not specify how much and on what date. Goes on to say charges/rates change but are available at branches etc. There is no reference to cooling off period right to cancel.

 

The most recent letter which i assume would the one relied upon has been modifed so that in addition to the above:

 

states on letter page 1 that o/d limit will be reduced by XX months starting XXXXXX after which o/d facility will be removed etc .... No payment amount is mentioned.

 

page 2 refers to disputes and regulation

 

page 3 differs to previous as follows:

 

condition of this o/d is that we expect you to make regular payments into account, such as monthly salary. I was in sales and income was irregular and they knew that.

 

states interest and charges agreed o/d and for those were o/d exceeded.

 

You can cancel anytime but if so you must return money etc.

 

Our agreement will continue to apply if you dont cancel.

 

 

Now given there will be net debt payable after bank charges it seems to me when they refer to regulated agreement the only thing they can point to is the o/d letters and my question is the most recent one outlined above considered a regulated agreement?

 

As there are bank charges involved over 30% does this invalidate the default notice.

 

Do I have grounds for defence on the remaining debt once the bank charges are resolved, in that there is no enforcable regulated agreement in place.

 

What I am trying to do here is looking at the documents they have produced under Court Directions satisfies the "regulated agreement" under the criteria set out by OFT determination.

 

As the account is over 7 years and they have not provided a copy oh my O/A i would suggest they no longer have a copy due to age.

 

Hope this is clear

 

Regards

 

ST

 

 

 

 

To help clarify matters, this is an extract from a Court case Coutts v Sebastyen and this part is partt of the summing up by the Judge in relation to overdrafts and teh Consumer Credit Act-

 

THE ACT

It is common ground:

 

 

(a) that the agreement for an overdraft of £2,000 in the terms of Coutts' letter dated 5 April 2002 was a regulated debtor-creditor agreement within the meaning of sections 8 and 13© of the Act, providing for 'running-account credit' within the meaning of section 10(1)(a) of the Act (in effect, a revolving credit within the agreed credit limit of £2,000); and

 

 

(b) that, as such, it was subject to the requirements of Part V of the Act (including the requirements as to documentation set out in sections 57 to 63 of the Act) save and in so far as it was excluded or exempted from such requirements.

 

Section 65 in Part V of the Act provides that an "improperly executed" regulated agreement is unenforceable by the creditor without a court order. It is common ground that a regulated agreement is "improperly executed" for this purpose if the requirements of sections 57 to 63 have not been complied with.

 

Section 74 of the Act provides for the exclusion of certain agreements from Part V. It provides as follows (so far as material):

 

"74. – (1) This part …. does not apply to –

 

(a) ….

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, …

© ….

(2) ….

(3) Subsection 1(b) … applies only where the OFT so determines, and such a determination –

(a) may be made subject to such conditions as the OFT thinks fit …

(b) ….

(3A) …. in relation to a debtor-creditor agreement under which the creditor is …. a bank …. the OFT shall make a determination that subsection 1(b) above applies unless it considers that it would be against the public interest to do so.

(4) …."

Part VI of the Act relates to matters arising during the currency of credit agreements. Section 82 in Part VI, which is headed 'Variation of Agreements', provides as follows (so far as material):

"82. – (1) ….

 

(2) Where an agreement (a "modifying agreement") varies or supplements an earlier agreement, the modifying agreement shall for the purposes of this Act be treated as –

 

 

(a) revoking the earlier agreement, and

(b) containing provisions reproducing the combined effect of the two agreements,

and obligations outstanding in relation to the earlier agreement shall accordingly be treated as outstanding instead in relation to the modifying agreement.

 

 

(3) ….

(4) If the earlier agreement is a regulated agreement for running-account credit, and by the modifying agreement the creditor allows the credit limit to be exceeded but intends the excess to be merely temporary, Part V …. shall not apply to the modifying agreement.

(5) ….

 

(6) ….

(7) …."

 

 

THE DETERMINATION

 

The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:

"1. Under the powers conferred upon me by Sections 74(3) and (3A) and 133 of the Consumer Credit 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.

 

 

2. This Determination is made subject to the following conditions:-

 

 

(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;

(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded:

- of the credit limit, if any,

- of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,

of the procedure for terminating the agreement;

and this information shall be confirmed in writing.

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing not later than 7 days after the end of that 3 month period of the annual rate of interest and charges applicable.

3. In this Determination the terms 'creditor' and 'debtor' shall have the meanings assigned to them respectively by Section 189 of [the Act]. The term 'bank' includes the Bank of England and banks within the meaning of the Bankers' Books Evidence Act 1879 as amended."

Edited December 2, 2009 by speedtrip

[Blaze36]

Are there any updates on this? I have a DCA chasing me for a student overdraft I defaulted on in 2006. The overdraft was interest-free but I've been charged interest as the default amount is lower than the amount the DCA are asking me to pay.

 

I'm just wondering where to start with it all really.

[speedtrip]

Hi there.

 

To be honest I am as much in the dark as you are.

 

My claim was stayed by the court due to the "bank charges" issue and following the SC decision I applied to the court requesting a indefinite stay to await developments post OFT.

 

The banks have written to negotiate but im unemployed so not in a position to do so anything.

 

If anybody has any suggestion these would be gratefully received

 

ST

[floricita]

Sub

[Bigdebtor]

sub

[means2anend]

I have completed thread from beginning..as a result by beingdirected from another thread 'Sherriff...bank charges''

 

It seems to me that from what Uniboy and pinny have said, I would not initiate proceedings but let them bring proceedings as the claimant..for the folowing reasons

 

They will not UNLESS they have complied with the DETERMINATION's requirements..the fact that in the meanwhile they have not or will not initiate proceedings is indicative of the fact that they are not or will no be able to comply with that DETERMINATION and it is for this fact that uniboy's AH Judge said by COUNTERclaiming they may have invoked s127..

 

Pinny's experience hihglights that to retrospectively show that 'at the time of the overdraft agreement' all compliance with the DETERMINATION was taken is more difficult..because contemporary records are not kept being made and this manner of record taking is not being practiced...much the same situation as stated or suggested by Judge in recent Harrison v MBNA case although that was to do with s78 request.

 

rgds

m2ae

[Bigdebtor]

Hi there.

 

To be honest I am as much in the dark as you are.

 

My claim was stayed by the court due to the "bank charges" issue and following the SC decision I applied to the court requesting a indefinite stay to await developments post OFT.

 

The banks have written to negotiate but im unemployed so not in a position to do so anything.

 

If anybody has any suggestion these would be gratefully received

 

ST

 

Interesting they want to negotiate - most unusual for them regarding bank charges since they stopped settling out of court!

 

Maybe they sense some weakness (on their part) in your own case?

 

BD

[jdes26]

Any updates?

[Dot1]

Hi all, very interesting thread but there are still many questions unanswered. I am also in a similar position. Any updates at all?