I have had a few cases land on my desk over the past few months involving Marbles. Now Marbles have had a few problems with the enforceability of their agreements, i look back on the cases ive litigated and one jumps off the page, that case was the late Dr Ian Cresswells case with Phoenix Recoveries where HHJ Wooster said this of a Marbles agreement
In my judgment, the requirement of Schedule 6, paragraph 4 is such that the
agreement should provide for the accurate rate of interest. It does not. Certainly the document the Claimant has produced does not. On the basis of that finding of fact the Defendant’s argument that there is, as a consequence, an irredeemable breach of the provisions of section 61(1A) of The Consumer Credit Act is bound to succeed
However, an even bigger headache appears to be on the horizon for them. You see, Marbles was a creature of HFC Bank / Beneficial Bank, and in around 2010 Marbles brand was sold to New Day Limited. Now i don’t know what information was passed across to New Day, but from the letters ive seen from them, it appears very little is the answer.
So what are the issues?
Well, good old New Day have made a number of changes to the terms of the original agreements. No issue there, well not really, indeed if the original contract allows the creditor to vary the agreement, then as long as he complies with s82 Consumer Credit Act 1974 there’s no issue, is there? Well that’s the problem because they seem to have a problem in establishing what the original contract actually said.
Marbles have been asked to provide a copy of the credit agreement as required by s78(1) Consumer Credit Act 1974. Now these accounts are on going, no defaults, so no suggestion that the obiter in Rankine v Amex can be applied. Basically, the requests were valid , they were in accordance with the CCA 1974 and thus there is a duty to comply.
So, Marbles have sent what they say is the original agreement, sadly there’s just one problem, what they’ve sent isn’t. It isn’t the original agreement. Its an agreement with New Day from when they took over the account.
Now s78(1) is clear, they have to produce the original agreement (reconstituted or otherwise) and not just part of it, any terms incorporated into the agreement have to be provided per Kotecha v Phoenix Court of Appeal ruling (one of my best days so far as a lawyer)
So Marbles send the 2010 agreement and the current agreement, as a result these replies were challenged. What came out of those replies were that Marbles simply don’t have the original agreements now that presents them a big big BIG problem. If consumers make a s78 request and the creditor doesn’t comply then they cannot enforce the agreement. I predicted many years ago that creditors failing to transfer all relevant documents would be a problem and the Credit Services Association dismissed it out of hand. Well perhaps now is the time to remember what was said back then on the BBC website ……………………………………………………………………..ENJOY
AAAAAND just a quick reminder of what the CSA (not FLA as i previous suggested) said
The trade association for lenders and debt purchasers, the Credit Services Association (CSA), says there are no statistics on how often lenders failed to enforce their debts because of defective paperwork.
But its chief executive, Peter Wallwork, says it is uncommon.
“The feeling is that it is a very small proportion – people do challenge, but our members do usually get the supporting material,” he says.
And he denies that debt purchasers, such as Link, Cabot or Phoenix, are in for a nasty surprise because the original lenders sometimes cannot come up with the right information.
“Debt purchasers are not waking up and suddenly finding they have a problem on their hands,” Mr Wallwork says.