PRA Group UK Limited v Segal - Credit Card Charges & Default Notices

[pt2537]

I am pleased to be able to provide a further update on another case which we have successfully defended. The case in question was PRA Group v Segal.

The claim arose out of a credit card agreement with MBNA, which our client argued was irredeemably unenforceable because the agreement did not contain the prescribed terms, and further the agreement was unenforceable due to non compliance with s78 CCA, and further the Default notice was in conflict with the s78 reply, so either s78 was complied with and the Default was bad or the Default was good and the s78 was bad, it could not be both.

We also challenged the charges for a credit card, since the Bevis ruling in the supreme Court there has been numerous arguments by creditors that the default charges are not unfair, also we have seen creditors use the Abbey v OFT supreme court ruling as a way of getting around having default charges challenged.

Fortunately we now have a ruling, which addresses default charges, and has confirmed they can be challenged under UTCCR 1999 and that the supreme court ruling is distinguished as it deals with bank charges which are a fee for a service whereas default charges clearly are fees for breach of contract.

The segal judgment is available and will be posted when i am able to do so. Til then, another cracking victory for our client and great teamwork between QualitySolicitors Howlett Clarke and Thomas Brennan!!


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[Amethyst]

Re: PRA Group UK Limited v Segal

Just to clarify PT - were the charges applied post 2006 ? ( so the £12 ones )

[Amethyst]

Judgment available here - > https://consumercreditlitigationandd...egal-judgment/

The Default Notice stuff is probably most useful to people generally however this is pretty decent as too many judges just write off default charge arguments because of OFT v Abbey ( irritating)

40. Had it been necessary to do so I would have reached the following conclusions on the question of fairness under UTCCR:-

(a) The Abbey National decision is not of direct application, since it concerns unauthorised bank overdraft charges, not default charges in running account credit agreements. Default charges are without doubt the consequence of breach of contract. Unauthorised overdraft charges, as analysed in the Abbey National decision, result from the provision of services pursuant to an implied request. I do not consider that Abbey National is authority for the view that default charges necessarily fall within the regulation 6(2) exemption and in the circumstances of this case I accept PRA’s counsel’s responsible and proper recognition that the charges here almost certainly do not;

(b) The burden of showing that the term is fair is on PRA;

(c) PRA has called no evidence on that point. I am unable to tell whether, for example, the charges might be fair in all the circumstances as forming a proportionate part of the revenue stream for providing the overall package of services under the account, or to secure proper performance of the contract;

(d) That being so PRA has not discharged the burden of showing that the default charges are fair.

41. In view of my decision about the default notice issue, it is not necessary for me to decide what relief would follow from a conclusion that the default charges have not been shown to be fair, or what directions would need to be given for the determination of that issue. I observe however that even a cursory examination of the effect of default charges on Mr Segal’s debit balance, as evidenced for example in the statement log at [392] shows that it was substantial.

[pt2537]

yep £12 charges, and some £20 tooo

[LucyWare]

The Default Notice stuff is probably most useful to people generally however this is pretty decent as too many judges just write off default charge