I thought it was about time to draw together some of the strands of information about the Consumer Credit Act and more importantly to address some of the points which often cause consumers confusion.
So, here goes, and this is just my own opinion bear in mind. Ill keep adding to this over the time too.
Under s78 you are no entitled to a signed copy of the original credit agreement, this was made clear by HHJ Waksman in Carey v HSBC. It is important to remember that many lenders stored their data including credit agreements in large storage facilities. Lets say one of them facilities burnt down and the bank lost all its credit agreements.If the bank had to produce the signed original agreements then this would in effect leave the bank unable to enforce its credit agreements. This point came up in Carey (See para 53(6)) and the Court raised exactly this point that through no fault of the banks, it could lose its ability to enforce its credit agreements by virtue of s78(6) Consumer Credit Act 1974.
Now there is nothing to stop you asking the creditor whether they have the original or whether they have lost it , and indeed if you never signed a credit agreement then its hard to see how a copy could be produced.
The creditor can of course send a copy of the original signed credit agreement to comply with s78, there is nothing to stop this as long as they have it and as long as the document is easily legible.
Under s78, the creditor must send easily legible documents, in accordance with regulation 2 Consumer Credit (Cancellation Notices and Copies of Documents) regulations 1983 the lettering in the executed agreement, and any other document referred to in it, shall be easily legible.
The Act does not define what is easily legible, in my view it is a common sense test, the document must be capable of being read without using computer enhancement or a magnifying glass. A case in point on this topic was Hillesden Securities vs Harry Moore where over 6 hearings took place because the documents each time were not easily legible. The Moore case is reported in the Telegraph online.
So, what other issues arise, well to comply with s78, the creditor must comply all at once, not piece meal. This is clear from the wording of s78 itself, the act uses the words “together with” well you dont have curry together with rice if the rice arrives 5 days later, the same applies with s78, together with means that, at the same time in my view, so you should get the executed agreement, or a reconstitution, a copy of the terms applicable at the point of the request, and a statement of account as required by s78.
There are often errors in recon documents, you only have to look at the case of Harrison v Link Financial Limited to see the trouble reconstituted agreements provide. Often the interest rates will be wrong, for example you will have had a 0% rate for 6 months, yet the recon youre given says “29.9%” this plainly will not be a true copy.
Also, addresses or telephone numbers will be key to proving the copy isnt accurate. For example, lets say you took out a credit agreement in 1992, you wouldnt expect to see a telephone number with the STD code “01604” because PhoneDay didnt take place til circa 1995 and before the code would have been “0604” equally, the PPI insurers address may tell a little piece of info, often a check of companies house will show you a companies history, and if the company didnt move to the address til 2000 then again there may be evidence to show the copy isnt as true as the creditor hoped.
True copies have the risk of being wrong, after all when a debt has been assigned the new creditor probably wont have a clue what terms need to be provided or not.
There is also another point, one which is often overlooked but which has a Court of Appeal authority backing it, that is the need for a copy of the agreement to be complete, in kotecha v Phoenix, the Court of Appeal ruled that the complete agreement must be produced under s78, any terms incorporated into the agreement must be provided. Any PPI terms, any general terms which are referred to in the agreement must be produced as part of the s78 reply. The Court of Appeal said so.