Barclaycards' wierd view of the Law

[RoadToRecovery]

OK, so anyone who has made a request for a true copy of thier original credit agreement is likely to have had the standard old twaddle from Barclaycard. They claim that a copy of recent terms and conditions satisfies thier obligation under the Consumer Credit Act.

If this were true, the following would be entirely possible (I am not sugesting for one moment Barclaycard do this.).

1) A company sets itself up with the required credit licences to trade as a credit copany. Known as "Spoofacard".

2) Obtains names and addresses of potential new clients.

3) Sets up fictitious balances with thier 'new clients'.

4) Sends overdue balance request to thier 'new clients'.

5) 'New clients' have no idea about the accounts in question. Request details from "Spoofacard" as per s.78(1) of the Consumer Credit Act 1974.

6) "Spoofacard" reply with an up to date statement and a copy of the current terms and conditions saying they have satisfied the request, please pay up or else.

Ok, the above is a very simplisitic view but using the law as Barclaycard see it is entirely possible and lawful. How can this be right, how can Barclaycard even consider it to be right. Do the laws of the land mean nothing to these financial companies?

[Beck1968]

Carry On...Send your cards to all the DCA's

[slick132]

Hi RTR,

I don't think your example is particularly accurate with what is essentially a moral dilemma.

BC are using their interpretation of the CCA 1974 to avoid sending out credit agreements, maybe because they are unavailable or unenforceable.

But surely the majority of a/c holders will have received and willingly used their cards to spend money.

[RoadToRecovery]

Hi slick.

You clearly know far more about the subject than me, I am reading as much as possible to try and become as informed as possible Thanks for the reply. You are of course right that people willingly used the cards.

I was making an absolute example, obviously not very well!

Is there any legal precedent that ruled a printout of current T&C's satisfies the CCA request? I simply cannot logically work out how barclaycard can make the deduction they do from the wording of the consumer credit act.

[slick132]

Hi RTR,

Yep, I realised the point you wanted to make. I was just saying there's a big moral dilemma tied up here too.

Without going into the finer detail, BC are using CCA 1974 to show that, where the original agreement terms have been varied, they are entitled to supply a current "statement of account" and the current T&C's.

[RoadToRecovery]

Begs the question, why don't all the CC companies use this simple wheeze as the CC companies seem to change the T&C's several times per year.


Looks as though the CPR route is the only option with Barclaycard from here.

Thanks for the input, I have a lot to learn!

[LampLighter]

Originally Posted by slick132

Hi RTR,
Without going into the finer detail, BC are using CCA 1974 to show that, where the original agreement terms have been varied, they are entitled to supply a current "statement of account" and the current T&C's.

Hi Slick, RTR,
Surely this depends on whether it's an 'original' Barclaycard that a person has accepted and used, OR it's an 'assigned' Barclaycard that was previously (say) Goldfish or Morgan Stanley and was 'assigned' when BC bought the accounts. I see no moral dilemma when it's an 'assigned' card.
Cheers,
LL

[slick132]

Hi LL,

I disagree.

When I say the terms have been varied, I mean changes to the a/c's T&C, not the card morphing from Goldfish or MSDW into BC.

Eg, where there is a change of interest rate, or maybe a change in the interest-free period before interest kicks in.

The moral dilemma I refer to is whether it's ok to avoid repaying money that you have spent.

[LampLighter]

Hi Slick,
I take the view that it's not proper to turn around to an existing creditor and say 'Forget it, I won't pay you because you have lost your CCA. HAha!' I would not expect a magistrate to be sympathetic to this either.

I take the view that a creditor who has bought your debt for a fraction of its book value but has not bothered to take care of the paperwork properly, then tries to enrich itself by ignoring your personal circumstances and charging almost 30% APR knowing you cannot possibly afford to pay that, is completely out of order, and therefore the lack of a CCA and consequent non-repayment by the debtor is nobody's fault but the creditor itself.

In the former case I would side with the creditor. In the latter case ... BC are a good example : they bully - they insist you are bound by CCA74 without a CCA but are not prepared themselves to be bound by it when they are in default. Etcetera etcetera.

Cheers,
LL

[slick132]

Noted, and I agree with your views about a debt "purchased" by a DCA.

I would not expect a magistrate to be sympathetic to this either.

A judge may have no option BUT to agree that a debt is legally unenforceable, if the documents are not as they should be and the case is presented well.

[LampLighter]

Originally Posted by RoadToRecovery

OK, so anyone who has made a request for a true copy of thier original credit agreement is likely to have had the standard old twaddle from Barclaycard. They claim that a copy of recent terms and conditions satisfies thier obligation under the Consumer Credit Act.

If this were true, the following would be entirely possible (I am not sugesting for one moment Barclaycard do this.).
1) A company sets itself up with the required credit licences to trade as a credit copany. Known as "Spoofacard".
2) Obtains names and addresses of potential new clients.
3) Sets up fictitious balances with thier 'new clients'.
4) Sends overdue balance request to thier 'new clients'.
5) 'New clients' have no idea about the accounts in question. Request details from "Spoofacard" as per s.78(1) of the Consumer Credit Act 1974.
6) "Spoofacard" reply with an up to date statement and a copy of the current terms and conditions saying they have satisfied the request, please pay up or else.
Ok, the above is a very simplisitic view but using the law as Barclaycard see it is entirely possible and lawful. How can this be right, how can Barclaycard even consider it to be right.

My OH and I realised this 'plan' as well, to be honest we don't understand why BC don't send something to everyone on the planet given their view of how the CCA74 is interpreted. Then they just have to stick to their guns and harass harass harass - it's a numbers game, nothing personal.

Luckily there are resources and genuine understanding and interpretation of ALL the regulations that appertain to these matters. It's a sheer delight to me that there are these proper safeguards in the (albeit sometimes flawed) legislation that these bullies HAVE to recognise when a Judge says 'Pay attention!'. Thank Heaven for CAG, it's a great comfort.

Originally Posted by RoadToRecovery

Do the laws of the land mean nothing to these financial companies?

Apparently not! It seems that being really ignorant of the regulations (or, far far worse, pretending to be really ignorant of the regulations) is to their strong advantage ... so long as the consumer is as well or less well informed and also in genuine fear of collectors and court action because of their lack of knowledge and/or experience.

CAG has taken away all the worry and fear I used to experience. Nice one!

Must get back to my own thread.
Cheers,
LL.

[Coactum]

Slick123 raises the question of morality here. Let us consider an individual who we will call Bob who uses his card to pay for daily essentials and nothing extravagant. Over many years just when Bob nears the pre agreed credit limit the bank increase the limit, they do this many times and although Bob is meeting the minimum monthly payment it should be clear to all that the rising indebtedness suggests he is living beyond his means. The banks choose to ignore this because the potential returns are so rewarding and they think that they could always convert his debt through a debt consolidation sale to gain some security in exchange for reducing the interest rate.

Then the day of reckoning comes when Bob discovers he cannot meet the payments, this may be due to the realisation that this rising debt cannot continue or his circumstances have changed causing a reduction in income.

Bob tries to negotiate a reduced payment but whatever is offered proves inadequate to the lender and finally he comes upon this forum where he discovers that there might be a legal loophole that he can use. Now you might reasonably argue that he is morally wrong to exploit such a loophole. Then again you might consider that it was the lender who was morally wrong to extend credit that was unaffordable but let’s leave that to the side for a moment.

The lender sells off this debt to another company and as LampLighter suggest this will be at a significant reduction on whatever balance is claimed due. The lender may not have technically lost through such action due to the high interest charged on credit cards and the duration that Bob held the card, and of course there is a tax right off on the book loss on the year of disposal. Once again I ask you to bear this in mind but put it to the side for a moment.

This new lender, let’s say it is Barclaycard, who have purchased a debt for pennies in the pound. Now Barclaycard hope to charge Bob the full outstanding balance and of course that high level of interest.

Now I ask you to consider all those morality questions. Was Bob morally wrong to accept the credit and spend the money? Is Bob morally wrong to explore if he can exploit the legal loophole so that he does not need to repay? Was the original lender morally wrong to extend credit that Bob could not afford to repay? Was the lender morally wrong to charge penalistic rates of interest? Are Barclaycard morally wrong to expect repayment of the full balance?

I would guess that Bob is not alone and is representative of a large number of caggers and I’m guessing that few people would be as critical of Bob’s morals that the other parties to this scenario but then again you might think differently.

[LampLighter]

Originally Posted by Coactum

Now I ask you to consider all those morality questions.
Was Bob morally wrong to accept the credit and spend the money?

There is no moral judgement to be made here. Bob was free to accept the credit and manage the credit and could ask them to reduce his credit limit at any time as part of managing his finances. It's up to him to manage the risks of being exposed to debt this way.

Originally Posted by Coactum

Is Bob morally wrong to explore if he can exploit the legal loophole so that he does not need to repay?

Again there is no moral judgement to be made. Bob is free to apply the law to his position, as is the creditor. Because the interpretation of the law rests with the judges, a (presumed trustworthy/honest) 3rd Party each side is able to make a case or defend a case and so devolve judgement to the 3rd party.

Originally Posted by Coactum

Was the original lender morally wrong to extend credit that Bob could not afford to repay?

Again there is no moral judgement to be made. Bob can refuse more credit, or seek more credit, as he wishes. The creditor can 'trust' Bob or 'entice' Bob as it wishes : Bob is the one at risk financially because the creditor is already wealthy and so its risk is very small. And often offset by past business to a zero risk financially. Unlike Bob, who depends on good health and retaining his job, etcetera, to keep his risk small.

Originally Posted by Coactum

Was the lender morally wrong to charge penalistic rates of interest?

Here we reach more shady ground.
When the penalties for late payment are applied because payment has not been managed or despatched when it could have been (i.e. the debtor does not care to pay) they could be considered reasonable as long as they are within pre-agreed limits or values, e.g. as part of a CCA.
When the penalties for late payment are applied despite the creditor making his position clear (e.g. now on incapacity benefit, unable to manage ongoing account, must pay off as a reducing balance) yet being completely ignored by the creditor who increases both interest and pressure as Bob gets into trouble then they have to be considered unreasonable : self-enrichment by unlawful behaviour on the back of someone's bad fortune is obviously not reasonable.

Originally Posted by Coactum

Are Barclaycard morally wrong to expect repayment of the full balance?

I think not if they have acted properly throughout.
As soon as they start ignoring Bob's true plight they are in the wrong.
As soon as they start harassing Bob in an unlawful manner they are in the wrong.
Making Bob worse off by not taking note of his plight puts them in the wrong.

Notwithstanding the expectation to complete the business they have arranged with Bob, they also have to accept the risk to that business, e.g. Bob has a bad back and cannot work, and cannot repay the credit extended to him. Not his fault, not their fault, but still the true nature of the situation.

If they are in any dispute, the court should decide the outcome. Not the creditor, who has to respect the nature of a dispute. It is unlawful to take someone's benefits from their account, it is unlawful not to recognise that the debtor is no longer able to maintain the contractual agreement.

There's no sentiment in business, they say, but the laws of the land require creditors to act properly, fairly and honestly. Debtors also, yet the law seeks to protect them from unscupulous creditors as well as the other way round, and there is undoubtedly a need for proper regulation of both sides. One day ... perhaps as porcines glide by.

In my humble opinion.
LL

[RoadToRecovery]

Originally Posted by Coactum

Slick123 raises the question of morality here. Let us consider an individual who we will call Bob who uses his card to pay for daily essentials and nothing extravagant. Over many years just when Bob nears the pre agreed credit limit the bank increase the limit, they do this many times and although Bob is meeting the minimum monthly payment it should be clear to all that the rising indebtedness suggests he is living beyond his means. The banks choose to ignore this because the potential returns are so rewarding and they think that they could always convert his debt through a debt consolidation sale to gain some security in exchange for reducing the interest rate.

Then the day of reckoning comes when Bob discovers he cannot meet the payments, this may be due to the realisation that this rising debt cannot continue or his circumstances have changed causing a reduction in income.

Bob tries to negotiate a reduced payment but whatever is offered proves inadequate to the lender and finally he comes upon this forum where he discovers that there might be a legal loophole that he can use. Now you might reasonably argue that he is morally wrong to exploit such a loophole. Then again you might consider that it was the lender who was morally wrong to extend credit that was unaffordable but let’s leave that to the side for a moment.

The lender sells off this debt to another company and as LampLighter suggest this will be at a significant reduction on whatever balance is claimed due. The lender may not have technically lost through such action due to the high interest charged on credit cards and the duration that Bob held the card, and of course there is a tax right off on the book loss on the year of disposal. Once again I ask you to bear this in mind but put it to the side for a moment.

This new lender, let’s say it is Barclaycard, who have purchased a debt for pennies in the pound. Now Barclaycard hope to charge Bob the full outstanding balance and of course that high level of interest.

Now I ask you to consider all those morality questions. Was Bob morally wrong to accept the credit and spend the money? Is Bob morally wrong to explore if he can exploit the legal loophole so that he does not need to repay? Was the original lender morally wrong to extend credit that Bob could not afford to repay? Was the lender morally wrong to charge penalistic rates of interest? Are Barclaycard morally wrong to expect repayment of the full balance?

I would guess that Bob is not alone and is representative of a large number of caggers and I’m guessing that few people would be as critical of Bob’s morals that the other parties to this scenario but then again you might think differently.

Just about sums up my predicament to the letter. I have never missed a payment on anything in my life. Even now I can no longer afford the minimum payments I have continued to pay what I can afford. Which is not enough for any of the CC companies, obviously.

[Coactum]

I guessed that what I wrote could apply to so many on this forum but thought my earlier post would have stimulated more response for you RoadToRecovery. Is LampLighter the only one who is going to express an opinion here?

[slick132]

To avoid hijacking of RTR's thread, the general discussion could be continued on a separate thread if anyone wants to discuss further.

[RoadToRecovery]

Please feel free to hijack the thread

It was started to promote a discussion on the subject. Personally I never even considered the morality of the issue, I always considered consumer law to be black and white

The simple fact that an unsecured debt that has been charged at unsecored rates ie; 25%+ apr can be instantly turned into a secured debt by the credit card sharks sums the morality issue up in a nutshell for me.

[slick132]

Doh, sorry I thought this was a normal thread which got hijacked.

I'll leave ya to it.

[izzitme101]

Originally Posted by Coactum
Is Bob morally wrong to explore if he can exploit the legal loophole so that he does not need to repay?

would you point to the loophole?

[Coactum]

Hypothetical ramblings. However, sections 77, 78 and 79 of the Credit Act 1974 are in essence what i had in mind.