Articles about the CCA ''stays''

[Amethyst]

This is Money - > Debt escape court cases put on hold | This is Money

Debt escape court cases put on hold

Alan O'Sullivan, This is Money
7 May 2009
Thousands of borrowers who are trying to escape their debts by using changes to consumer law have had their hopes scuppered by a recent landmark court ruling.



Dozens of companies have sprung up over the past two years promising to free borrowers of all their debts – in exchange for large fees – by proving certain loans are 'unfair' under changes to the Consumer Credit Act. An estimated 100,000 such cases are waiting to be heard in courts around the country, but now these have been put on indefinite hold while senior judges review a sample of 'select cases' at the Commercial Court in London.
Experts believe these cases and any resulting appeals by lenders could take years to resolve, in a possible rerun of the current lengthy court battle over the fairness of bank charges, which itself may not be resolved until 2011.
Under the new laws, which came into effect in April 2007, a borrower simply has to prove a credit agreement is 'unfair' in order to escape paying, which is why 'Claims Management Companies' have been pouring over thousands of contracts trying to find faults.
Daniella Lipszyc, a solicitor who specialises in financial irregularity cases at law firm Ultimate Law, said: 'This decision will wipe out any faint hope of an immediate resolution and consumers will be taking a significant risk by parting with any cash in return for a debt-free life.
'Some companies will continue to make false promises to win back people's money and clear them of their debts even though they know this waiver is now in place. Consumers need to be aware there is no point in paying a company for this service anymore: by the time the test case has finished, the lender may have sued them over their debts or they may have paid it off anyway.'
The judge at the centre of 170 such cases at Chester Country Court said last Friday he was putting the cases on hold following the referral of 'a few carefully selected cases to the Commercial Court in London on a test basis', in official court documents seen by This is Money.
As the move has the backing of Lord Justice Moore-Bick, the deputy dead of Civil Justice, it is likely to be copied by county courts nationwide. This means an estimated 100,000 claims from desperately indebted borrowers will be put on hold, many of whom will have paid out hundreds of pounds on the promise of becoming debt-free.
The 'claims management companies' behind these cases have been mired in controversy over the past year: they have been warned not to mislead customers by saying credit agreements are 'unenforceable' and drawn the ire of consumer groups.
Solicitors have also been warned this week to think twice before getting involved with claims management companies by the Solicitors Regulation Authority, which is investigating 10 law firms for allegedly handling false or exaggerated claims.
A heavily indebted couple desperate to escape their debts, Basil and Amanda Rankine, were critcised by a High Court judge last year for trying to opportunistically escape their debt obligations.
Some claims management firms point to their 'recent successes' in their marketing material, but these are cases won out of court over a year ago, which are no longer possible as lenders 'up their game', Ms Lipszyc said.
She added: 'Even among those who were lucky enough to have their debt written off early on, their debt did not actually disappear. A settlement means the lender cannot pursue them for payment through the courts, but the debt will remain on their credit file until it is paid off.'

[Amethyst]

Re: CCA Claims to be stayed in Cheshire.....CONFIRMED

MSE Article

Debt write-off cases to be suspended by courts, lawyer claims

Guy Anker
News Editor
7th May 2009


Consumers hoping to get their loan or credit card debt wiped off or reduced via the courts by exploiting loopholes in legislation have been warned by a lawyer that they’ve little chance of immediate success.
This follows a landmark decision by a judge in Chester to suspend over 100 debt write-off claims last Friday – a decision which could be replicated in other courts – pending the result of "a few select test cases" in the Commercial Court.

That does not stop borrowers negotiating settlements with lenders outside court, insists Daniella Lipszyc, a solicitor from law firm Ultimate Law.
Critics, however, question whether it’s morally correct to try to get out of paying a debt you knowingly built up. The British Bankers’ Association says we all pay more to cover those who cannot or will not repay their debts.
Lipszyc says once news of the decision by Judge Derek Halbert in Chester County Court spreads further, all claims in the courts will be put on hold, with an estimated 100,000 claims suspended already.
The trend of consumers trying to get their debt wiped off has grown over the past few months because of a flood of adverts from claims management companies looking to exploit loopholes in Consumer Credit Act legislation.
For example, when lenders cannot produce copies of the original credit agreement or if the agreement failed to correctly state a prescribed term, such as the APR, claims firms say you may be able to get your debt written off.
Yet two weeks ago, the body that regulates solicitors warned a number of adverts which claim to offer an easy route to getting your credit card or loan debt wiped out could be misleading as many loan agreements are, in fact, enforceable.
Lipszyc adds: "The Chester decision is a landmark one that will have massive implications on cases involving the enforceability of credit agreements. It’s now extremely inappropriate and misleading for any company to promise to write off balances in light of this judicial move."

[EXC]

Re: CCA Claims to be stayed in Cheshire.....CONFIRMED

http://news.bbc.co.uk/1/hi/business/8037983.stm



Judges seek hold on debt claims


The test cases should establish whether consumers can cancel debts

Judges in England and Wales are considering putting on hold up to 100,000 claims for the cancellation of credit card and other consumer debts. Many of the cases have been generated by claims-handling firms advertising in the newspapers and on TV.
The firms argue that the debts cannot be enforced if lenders have not kept the right paper work.
The judiciary is planning to select a few claims for a test case in the High Court to decide the issues involved.
A spokesman for the Judicial Communications Office explained that the aim was to find a way of dealing with a very large number of claims.
"It is about the management of these cases in the most efficient manner," he said.
Test cases
The intention of the judiciary has been revealed in a recent letter written by Judge Derek Halbert, the head civil judge in Cheshire.
"It is apparent that there are a number of claims to be commenced nationally in which the main claim will be for a declaration of the invalidity of a credit agreement for non-compliance with the Consumer Credit Act (CCA)," Judge Halbert said.
"Estimates vary but up to 100,000 claims may be involved.
""The consensus is that the appropriate course is to refer a few carefully selected cases to the Commercial Court in London on a test basis... and then stay all others until the test cases have established the requisite principles," he added.
No deadline has been set for any decision on a test case, which will be decided by Lord Justice Moore-Bick, the deputy head of civil justice.
Challenging debts
Last year, a Staffordshire couple, Basil and Amanda Rankine, gained widespread publicity for managing to persuade lenders to write off more than £65,000 of assorted credit card debts and other loans.

The Rankines were accused by a judge of lying in court

They relied on various arguments, including that the lenders had not produced accurate paperwork to back up their loans, or had not complied with other requirements of the CCA.
But when they went to the High Court to challenge further debts, and establish a legal precedent, they lost.
Judge Simon Brown accused them of lying, and said their arguments were factually and legally flawed, describing some of them as "pure sophistry" or "totally without factual or legal merit".
The law
The idea that some borrowers might be able to renege on some of their debts hinges on the wording of the 1974 CCA, which covers agreements struck before the advent of a new Act in 2006.
The purpose of the 1974 Act was stop unscrupulous lenders exploiting unsophisticated borrowers.

There are companies encouraging people to look for loopholes in loan agreements but our position is quite clear - if you borrow, you should repay


British Bankers' Association

But according to Marc Gander of the Consumer Action Group (CAG), it also contains requirements that can be used by some borrowers.
"If you write to the lender under the CCA and ask for a 'true copy' of loan agreement, if they are unable to supply it in the required time, then it becomes an unenforceable agreement," he said.
It is now clear that tens of thousands of such claims, based on this and other requirements of the 1974 Act, have been building up, garnered in many cases by claims-handling firms, and threatening to swamp the county courts.
Claims-handling firms are regulated by the Ministry of Justice (MoJ).
In February, the ministry and the Office of Fair Trading (OFT) warned they would close down any firms which made misleading claims about their ability to get their clients' debts written off.
The British Bankers' Association (BBA) said: "The BBA is aware there are companies encouraging people to look for loopholes in loan agreements but our position is quite clear - if you borrow, you should repay: if you are experiencing financial problems, talk to your lender."
Test case
The CCA issue has parallels with that of the bank charges saga, in which tens of thousands of claims for the return of bank overdraft charges were put on hold in the summer of 2007 pending the outcome of a High Court test case.
That has still not resolved whether overdraft charges are fair or not, and the first part of the litigation between the banks and the OFT reaches the House of Lords for an appeal in June.
The High Court judge who issued the first judgement on bank charges last year, Mr Justice Andrew Smith, has agreed to hear any CCA test cases.
"Anyone who find themselves struggling with their debt should contact their lender and arrange to have their repayments restructured," said the consumers' organisation Which?
"If they are really worried about their debt, they should contact Citizens Advice, National Debtline or the Consumer Credit Counselling Service," it said.

[Amethyst]

Re: CCA Claims to be stayed in Cheshire.....CONFIRMED

sorry not picking on Marc or anything and he's probably been misquoted but...

"If you write to the lender under the CCA and ask for a 'true copy' of loan agreement, if they are unable to supply it in the required time, then it becomes an unenforceable agreement," he said.

it doesn't. I suppose it does temporarily but that not what the CCA stays are about - they are about iredeemably unenforcable agreements under 127(3) due to lack of prescribed terms and whatnot...not the old 12+30 days malarky.


Otherwise its much better balanced than the Ultimate Law angle.


edit: dealt with.



also

Unenforceable Credit Agreements

News Release Issued Today
All enforceability claims at Chester County Court have been put on hold by His Honour Judge Derek Halbert, pending the outcome of a ‘few carefully selected’ test cases in the Commercial Court. In total, an estimated 100,000 claims are understood to have been stayed across the country as the courts reassess the validity of credit agreements.
The number of successful claims against credit enforceability has shrunk to zero since the beginning of the year, as lenders become more clued up on complex legislation. Consumers are now being warned to steer clear of companies claiming to write off balances in return for an upfront fee, following the move by county courts across the UK.
Daniella Lipszyc – a solicitor who specialises in financial irregularity cases at law firm, Ultimate Law – has urged consumers to think carefully before pursuing a claim, insisting that they’re more likely to win on a horse race than see their credit card debt wiped out.
She commented: “The ruling by His Honour Judge Halbert – and other civil courts across the UK – is a landmark decision that will have massive implications on cases involving the enforceability of credit agreements.
“After a number of early wins, many claims management companies have jumped on the band wagon, promising desperate consumers that they can write off credit card balances. In reality, cases have simply ground to a halt as banks and lenders up their game and become more clued up on the Consumer Credit Act and subsidiary legislation. It’s now extremely inappropriate and misleading for any company to promise to write off balances in light of this judicial move.”
She continued: “In the current economic climate, it’s completely understandable that people are being tempted by promises to clear excessive spending. But this decision will wipe out any faint hope of an immediate resolution and consumers will be taking a significant risk by parting with any cash in return for a debt-free life.”

Despite an increasing number of claims management companies specialising in credit card enforceability claims, Lipsyzc insists that consumers should now shift their focus on claiming against unfair credit card charges.
She said: “Many people believe that there’s been a freeze on claiming unfair credit card charges. This follows the Financial Services Authority’s decision to allow banks to ignore dealing with bank charges last year. Credit cards do not fall under this waiver – consumers are far more likely to get money back on unfair charges than see their balance wiped out.
“It’s important to understand that even if credit card debt is successfully written off, the balance does not disappear – banks simply cannot request payment. What’s more, consumers do not receive any compensation, despite suggestions from several claims management companies.”
The warning comes after an industry watchdog warned solicitors not to get involved with claims management firms who make false claims that most credit agreements issued before April 2007 are unenforceable under the Consumer Credit Act 1974.
Lipszyc added: “Judge Halbert’s decision comes as little surprise. Whilst many claims management companies believe this area is lucrative and ‘sexy’, I’ve always had grave reservations about entering into this sector and advise any solicitor who is considering a move into this market to do so with extreme caution.”
A number of law firms are currently being investigated by the Solicitors Regulation Authority and any found to be breaching its code of conduct could face a tribunal.

consumerclaimsagency.com / ultimatelaw (A CMC basically)