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  #1  
Old 13-01-2008, 01:06 AM
ian1969uk ian1969uk is offline
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Default Unlawfully terminated accounts.

I am sure I have read somewhere that. if a creditor unlawfully terminates an acount, they cannot then enforce that agreement. For instance, if a creditor issues a default notice giving two weeks to rectify the breach, but then terminates the account before this two weeks is up.

Have I imagined this or is this indeed the case? Is there any case law or legislation to back this up?
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  #2  
Old 13-01-2008, 08:24 AM
ncf360 ncf360 is offline
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Hi,

may be wrong but think thats was dicussed OTR on DaveFirewalkers CCA thread?
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  #3  
Old 13-01-2008, 05:56 PM
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Default

May be a bit more info on the circumstances, I have a default with Voda phone, defaulted on CRA the same date the the Default was sent to me, also that same day they sent my account to westcott and canceled my agreement.

it may make a difference if its covered by the CCA.

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  #4  
Old 13-01-2008, 08:18 PM
ian1969uk ian1969uk is offline
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Default

Yep, it's a credit card with Intelligent Finance I'm talking about, so definitely covered by the CCA 1974.
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  #5  
Old 13-01-2008, 09:34 PM
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Default

They have to give you a prescribed period of time to rectify the default. If they don't do that then the default is invalid.
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Old 13-01-2008, 09:54 PM
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Default

Quote:
76 Duty to give notice before taking certain action

(1) The creditor or owner is not entitled to enforce a term of a regulated agreement by—

(a) demanding earlier payment of any sum, or

(b) recovering possession of any goods or land, or

(c) treating any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred,


except by or after giving the debtor or hirer not less than seven now 14 I believe days’ notice of intention to do so.

(2) Subsection (1) applies only where—

(a) a period for the duration of the agreement is specified in the agreement, and

(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),


but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(3) A notice under subsection (1) is ineffective if not in the prescribed form.

(4) Subsection (1) does not prevent a creditor from treating the right to draw on any credit as restricted or deferred and taking such steps as may be necessary to make the restriction or deferment effective.

(5) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

(6) Subsection (1) does not apply to a right of enforcement arising by reason of any breach by the debtor or hirer of the regulated agreement.
Quote:
98 Duty to give notice of termination (non-default cases)

(1) The creditor or owner is not entitled to terminate a regulated agreement except by or after giving the debtor or hirer not less than seven days’ also now 14 I believe re 2006 act notice of the termination.

(2) Subsection (1) applies only where—

(a) a period for the duration of the agreement is specified in the agreement, and

(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),


but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(3) A notice under subsection (1) is ineffective if not in the prescribed form.

(4) Subsection (1) does not prevent a creditor from treating the right to draw on any credit as restricted or deferred and taking such steps as may be necessary to make the restriction or deferment effective.

(5) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

(6) Subsection (1) does not apply to the termination of a regulated agreement by reason of any breach by the debtor or hirer of the agreement.
I'm sure these two cover what you're looking for...
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  #7  
Old 13-01-2008, 11:35 PM
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Default

Thanks, not sure they apply though. Section 76 is for an agreement with a specified length, and 98 is when they haven't issued a default notice.

I know that the default is invalid due to their actions among other things, but what I am interested in is their termination of the agreement before the default period was over.

In those circumstances, are they still entitled to enforce the agreement and recover any sum owing or not.

I have seen this quoted OTR:

"Failure of a Default or Termination Notice to be accurate not only invalidates the Default or Termination Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give the Claimant a claim for damages. (Kpohraror v Woolwich Building Society [1996] 4 All ER 119)"

Is this the case? Is a Court now prevented from enforcement?

Like I say, I know the default is invalid but presumably they could just issue a corrected default if they chose to. It's the withdrawal of the credit facilities before the default period was up that I am interested in.

Cheers.
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  #8  
Old 13-01-2008, 11:43 PM
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TANZARELLI TANZARELLI is offline
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Default

"Failure of a Default or Termination Notice to be accurate not only invalidates the Default or Termination Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give the Claimant a claim for damages. (Kpohraror v Woolwich Building Society [1996] 4 All ER 119)"

Hi Ian both these cases are in the caselaw section.
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  #9  
Old 13-01-2008, 11:54 PM
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You also have statements of arrears, which if they haven't complied with these, they cannot enforce the debt or claim interest.
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  #10  
Old 14-01-2008, 12:46 AM
ian1969uk ian1969uk is offline
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Default

Quote:
Originally Posted by TANZARELLI View Post
"Failure of a Default or Termination Notice to be accurate not only invalidates the Default or Termination Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give the Claimant a claim for damages. (Kpohraror v Woolwich Building Society [1996] 4 All ER 119)"

Hi Ian both these cases are in the caselaw section.
Thanks, just had a read and can see that the default is invalid and that there an be a claim for damages for loss of credit reputation etc. I can't see, though, how a court is prevented from enforcing the debt, unless it is simply because the proper procedures haven't been followed. In that case, what is to stop the credit card company, in my case, sending out a new default notice?

Hmm...but can they now default an account that they have already terminated? There is no way to remedy the alleged breach now as the facilities have already been withdrawn so there can never be a situation where the breach is treated as if it had never occurred.

God, this is complicated stuff
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