I have found quite a few cases being litigated lately where the underlying debt arises out of an overdraft. The general approach that seems to be adopted when defending these claims seems to overlook section 140A Consumer Credit Act 1974.
I dealt with a case recently where Hoist Portfolio Holding 2 limited had purchased a debt that was made up of overdraft / bounced direct debit charges. The charges had created a cycle of debt, yet the advice given on one of the other forums that i dont get on was that a s79 CCA 1974 request should be made and there was some waffle about the fact there was no signed agreement meant that the debt was unenforceable…….. now back in the real world the advice given was utter nonsense.
So the client consulted me and after considering the facts of the case it was clear that there was an unfair relationship, the way the creditor had added the charges were clearly unfair, most were added when the debtor was waiting for funds to come in and despite requests the creditor refused to defer payment of the charges thus creating an ever increasing cycle.
So a Defence was drafted, and the Claim proceeded to trial. The Claimant seemed to bizarrely think that they couldn’t be touched by these charges. However s140B Consumer Credit Act is clear that the Court can make an order directing an assignee to repay monies even though the monies werent paid to them.
In addition, s140B(9) CCA 1974 also prescribes that where there is an allegation of unfairness, it is the opponent who carries the burden of proving the relationship is not unfair.
So, the matter came to trial, not only did the Claimant lose the Claim, they were ordered to repay all of the bank charges added to the account.
Section 140A is often overlooked, undervalued and it is a powerful provision. I used s140A back in 2010 when i took the Harrison v Link Financial case to the High Court when all the advice was to challenge the creditor under the Protection from Harassment Act 1997 i decided to use the CCA and the result speaks for itself. The provision of s140A covers a broad spectrum and im surprised that it isnt used more often to reclaim charges and to Defend proceedings.