Has a Default Notice been served?

by Waffle Fri Oct 13, 2017 10:28 am

Prior to a "creditor" taking certain action a default notice MUST be served on the debtor. This default notice must meet the specific requirements under the Consumer Credit Enforcement Default and Termination Regulations 1983.

http://www.legislation.gov.uk/uksi/1983/1561/contents/made

These are very specific, the wording in the default notice has to be exact and has to be served very specifically. This is also legislated under s76 of the Consumer Credit Agreement Act

http://www.legislation.gov.uk/ukpga/1974/39/section/76

There is a number of loop holes surrounding a default notice and the termination of a contract, if not executed correctly by the OC, the OC and the purchaser have no right of action.

by petesomething Fri Oct 13, 2017 3:13 pm

Hi Waffle,

This is great information people are not aware of. For instance a bank cannot legally sell your debt without sending a default notice. But if you have to go to court, it is no good just saying I never received a default notice. The bank will say or their solicitor will say they did, and the court will believe them. However if you do receive a default notice, don't just throw it in the bin, check your details, has it got the correct account number, your correct full name and address, has it given you a time frame in which to reply to the default notice.

If not keep it safe, this can act as part of your defense in court. Because for instance, if it is the wrong account number, you can argue you never got a default notice for the account you defaulted on.

by Waffle Fri Oct 13, 2017 7:38 pm

Hi petesomething

It is important for us to know legally what the exact process and wording should be, we need to be looking at every detail we can. Even the wording they use has to be very precise.

by handle Fri Oct 13, 2017 8:21 pm

make note of s76
(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.

by petesomething Fri Oct 13, 2017 9:12 pm

HI Waffle

i have always said you are brilliant at research Very Happy

by Waffle Fri Oct 13, 2017 9:59 pm

Handle, thanks for taking note of that.

Thanks Petesomething I get a lot of inspiration from reading your comments.

Ive just taken the time to look at all this in more detail. s 76 is actually for non-defaulted accounts.

Its s 87 & 88 of the 1974 act we should look at for defaulted accounts.

87 Need for default notice.

(1)Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—
(a)to terminate the agreement, or
(b)to demand earlier payment of any sum, or
(c)to recover possession of any goods or land, or
(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or
(e)to enforce any security.

88 Contents and effect of default notice

Then the default notice MUST be within the very particular form laid out in schedule 2 of the Consumer Credit Default & Termination Regulations. see here

http://www.legislation.gov.uk/uksi/1983/1561/schedule/2/made

A "creditor" is not entitled to demand earlier payment, terminate the agreement, recover possession of goods, treat any right conferred on the debtor as terminated, restricted or deferred and they cannot enforce a security.

They cannot sell it on if there is no proper service of a default.

Those default notices need to be looked at very closely and made sure they have been properly constructed and properly served.

by Candor Fri Oct 13, 2017 10:59 pm

So wuddya reckon. does this expand and clarify on S136 of the 1925 LoPA, which lets face it is about as helpful as a glass hook ?

by Tiggy Sat Oct 14, 2017 2:18 pm

Candor wrote:So wuddya reckon. does this expand and clarify on S136 of the 1925 LoPA, which lets face it is about as helpful as a glass hook ?

No, they are different aspects of law, the Law of Property Act deals with the assignment of the debt which can be done even where a default notice hasn't beenissued.

The question of the default notice comes into it where you're defending against a claim being brought, as under the Consumer Credit Act you have to issue a Default Notice, it's classed as it's the Cause of Action. If one hasn't been issued, then neither an original creditor nor any debt purchaser technically should issue proceedings.

This only applies to debts covered by the Consumer Credit Act.

The other aspect of a Default Notice (and where a lot of people fall down!) is it's also classed as the Cause of Action under the Limitations Act 1980, so for a debt to be statute barred it's 6 years (5 in Scotland) from the issue of the formal Default Notice NOT from when you actually stopped paying.

Again, only for debts covered by the CCA.

by Candor Sat Oct 14, 2017 10:08 pm

Thanks Tiggy for clearing that up, I was of the impression the statutory information regards the DN seems to be a lot clearer than it is for Assignments.

by johnny7 Sun Apr 29, 2018 9:58 am

petesomething wrote:Hi Waffle,

This is great information people are not aware of. For instance a bank cannot legally sell your debt without sending a default notice. But if you have to go to court, it is no good just saying I never received a default notice. The bank will say or their solicitor will say they did, and the court will believe them. However if you do receive a default notice, don't just throw it in the bin, check your details, has it got the correct account number, your correct full name and address, has it given you a time frame in which to reply to the default notice.

If not keep it safe, this can act as part of your defense in court. Because for instance, if it is the wrong account number, you can argue you never got a default notice for the account you defaulted on.

pete what do you mean by this? I have never received a default notice and I am going to court soon - are you saying that me telling them I have never received one means nothing to my defence? thanks

by handle Mon Apr 30, 2018 1:20 pm

Tiggy wrote:
Candor wrote:So wuddya reckon. does this expand and clarify on S136 of the 1925 LoPA, which lets face it is about as helpful as a glass hook ?
No, they are different aspects of law, the Law of Property Act deals with the assignment of the debt which can be done even where a default notice hasn't beenissued.

The question of the default notice comes into it where you're defending against a claim being brought, as under the Consumer Credit Act you have to issue a Default Notice, it's classed as it's the Cause of Action. If one hasn't been issued, then neither an original creditor nor any debt purchaser technically should issue proceedings.

This only applies to debts covered by the Consumer Credit Act.

The other aspect of a Default Notice (and where a lot of people fall down!) is it's also classed as the Cause of Action under the Limitations Act 1980, so for a debt to be statute barred it's 6 years (5 in Scotland) from the issue of the formal Default Notice NOT from when you actually stopped paying.

Again, only for debts covered by the CCA.

Tiggy, what if the assigned DCA starts litigation just within the 6 years, but withdraws before the hearing. Does the original 6 years apply?.....or by commencing and stopping litigation actually gets them past the stat of limitations.

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