Tweet
Default Notices - Useful Information
Firstly i must say this does not constitute legal advice whatsoever. If you need assistance consult a qualified legal professional.
The humble default notice has been subject to large amount of interest from the Courts from County Court level right up to the High Court ( Harrison vs Link) and also the Court of Appeal (Brandon vs Amex)
So, can a default notice being bad lead to a claim against you being dismissed? i believe it can yes.
I must stress that a defective notice will not lead to the debt being written off but it will place the creditor in all kinds of trouble and will assist you in your bargaining position undoubtedly. Not least because if the notice is bad its likely if a claim has been issued then the Creditor will have to look at discontinuance and pay your costs, very very helpful in lowering your liability.
So what can make a notice bad.
District Judge Grand (Isle of Wight) handed down a judgment that struck a blow to the heart of Lloyds TSB Defaults and will now cause Lloyds a big problem.
Lloyds TSB did not amend their template in Oct 2008 when the amendments were made to the 1974 Act and the Default Regulations.
So from 2008 until recently, Jan 2011 is the most recent i have seen, Lloyds TSB credit card default notices have omitted the information required by Schedule 2 Para 10a of the Default Regs.
District Judge Grand ruled that this was enough to defeat Lloyds TSB claim as he relied on Harrison v Link Financial Para 75 as the authority for a bad notice not allowing any enforcement.
Seems Lloyds have a problem
Turning to the other creditors out there. One thing people often miss is that the terms and conditions of the contract wil normally include a term that says something like this
1) you must pay us immediately any amount which exceeds your credit limit
2) you must pay us any arrears you have built up............
However, (and MBNA seem a good example) many firms will seek one or the other.
An example here is a clients case which recently went to court.
In that case the over limit amount was £914, the arrears were £594.
So the default notice said you must pay us £594 to remedy the breach.
The problem was however that even if the client did pay what he was asked for, then he would still have been in breach of contract.
I submit that this is absurd and that the correct approach would have been for the notice to ask for as a minimum the £914 if not the full combined amount of the two.
In any event it was conceded that the notice was bad.
Link Financial also seem to keep asking for the full balance in their notices which is a no no, they can only ask for accelerated payments AFTER the Default notice has been issued and expired.
HFO Capital limit also seem to have a headache in getting it right, they always issue in the name of HFO services when the creditor is Capital.
This is a breach of schedule 2 para 1 of the Default Regs as the name and address of the creditor NOT his agent must be stated on the notice.
Also they seem to ask for the full balance or 40% down payment. This is contrary to the requirements it seems as they should state the action to be taken to remedy the breach. Now if you ever saw a HFO default notice you will know that they put TWO balances on them but never tell you which balance to pay 40% of??????
These are just points ive picked up over the past couple of years. I wanted to get them down on paper to help others,
I will continue to add to this thread as and when i get time
I have uploaded the regulations to this thread to assist people. The relevant schedule if you breach your contract is schedule 2 and this sets out what the notice must contain
Admin Note:
This thread is duplicated (and open for comment) over in Unenforceability: ---> Default Notices - Updated Information!
The humble default notice has been subject to large amount of interest from the Courts from County Court level right up to the High Court ( Harrison vs Link) and also the Court of Appeal (Brandon vs Amex)
So, can a default notice being bad lead to a claim against you being dismissed? i believe it can yes.
I must stress that a defective notice will not lead to the debt being written off but it will place the creditor in all kinds of trouble and will assist you in your bargaining position undoubtedly. Not least because if the notice is bad its likely if a claim has been issued then the Creditor will have to look at discontinuance and pay your costs, very very helpful in lowering your liability.
So what can make a notice bad.
District Judge Grand (Isle of Wight) handed down a judgment that struck a blow to the heart of Lloyds TSB Defaults and will now cause Lloyds a big problem.
Lloyds TSB did not amend their template in Oct 2008 when the amendments were made to the 1974 Act and the Default Regulations.
So from 2008 until recently, Jan 2011 is the most recent i have seen, Lloyds TSB credit card default notices have omitted the information required by Schedule 2 Para 10a of the Default Regs.
District Judge Grand ruled that this was enough to defeat Lloyds TSB claim as he relied on Harrison v Link Financial Para 75 as the authority for a bad notice not allowing any enforcement.
Seems Lloyds have a problem
Turning to the other creditors out there. One thing people often miss is that the terms and conditions of the contract wil normally include a term that says something like this
1) you must pay us immediately any amount which exceeds your credit limit
2) you must pay us any arrears you have built up............
However, (and MBNA seem a good example) many firms will seek one or the other.
An example here is a clients case which recently went to court.
In that case the over limit amount was £914, the arrears were £594.
So the default notice said you must pay us £594 to remedy the breach.
The problem was however that even if the client did pay what he was asked for, then he would still have been in breach of contract.
I submit that this is absurd and that the correct approach would have been for the notice to ask for as a minimum the £914 if not the full combined amount of the two.
In any event it was conceded that the notice was bad.
Link Financial also seem to keep asking for the full balance in their notices which is a no no, they can only ask for accelerated payments AFTER the Default notice has been issued and expired.
HFO Capital limit also seem to have a headache in getting it right, they always issue in the name of HFO services when the creditor is Capital.
This is a breach of schedule 2 para 1 of the Default Regs as the name and address of the creditor NOT his agent must be stated on the notice.
Also they seem to ask for the full balance or 40% down payment. This is contrary to the requirements it seems as they should state the action to be taken to remedy the breach. Now if you ever saw a HFO default notice you will know that they put TWO balances on them but never tell you which balance to pay 40% of??????
These are just points ive picked up over the past couple of years. I wanted to get them down on paper to help others,
I will continue to add to this thread as and when i get time
I have uploaded the regulations to this thread to assist people. The relevant schedule if you breach your contract is schedule 2 and this sets out what the notice must contain
Admin Note:
This thread is duplicated (and open for comment) over in Unenforceability: ---> Default Notices - Updated Information!