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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2847
Experience:  Partner in national law firm
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Consumer Credit Act 1974 My wife had a credit card under

Customer Question

Consumer Credit Act 1974
My wife had a credit card under the 1974 consumer credit act and we stopped payìng the credit card due to financial reasons as the bank had an unenforceable contract. The bank is now taking my wife to court and as part of our defence we asked for the original signed contract with my wife's signature etc and to my dismay the bank sent the original contract with my wife's signature.
As this is now going to court I further contested the legitimacy of the bank's claim because only my wife's signature appeared on the contract and not the bank's as well. I thought from a legal standpoint that both parties had to sign a contract to make it legally binding?
Can this contract be enforced even though it is only signed by one party and if so are there any other grounds I can challenge the Consumer Credit Act 1974? I have been told you can challenge the Act on many grounds - is this correct?
Many thanks
Submitted: 1 year ago.
Category: Law
Expert:  Alice H replied 1 year ago.
My name is ***** ***** I'm happy to help with your question today.
Is your wife disputing her indebtedness to the bank?
When was the account opened?
Customer: replied 1 year ago.

Why do you ask? February 2009

Expert:  Alice H replied 1 year ago.
These are questions the Judge will ask.
Also the Consumer Credit Act 1974 was amended by the Consumer Credit Act 2006 which closes down a number of loop holes.
Now, even if you have a technical defence a court is less likely to set aside the agreement.
So could you explain in a little more detail the grounds on which your wife is defending the claim and I will happily look at the law for you in more detail.
S.140 CCA 1974 (as amended) is probably the starting point.
Customer: replied 1 year ago.

Hi Alice,

She disputed the claim on the basis of the claimant supplying proof of the debt and a copy of the original agreement correctly executed and signed.

Is this agreement correctly executed if both parties have not signed the agreement?

Also, what other grounds can this agreement be contested on?

Many thanks

Expert:  Alice H replied 1 year ago.
Understood.There is no requirement that I can find in the 1974 Act or the accompanying regulations that say an agreement is unenforceable by virtue of the creditors failure to sign the agreement.The fact remains that these technicalities are seldom successful these days. Especially as the changes made by the 2006 Act.In fact s.127 CCA 1974 as amended says that the Judge has to consider whether the debtor, for example, has suffered any prejudice by a particular act or omission.So one of the questions the Judge may ask at a hearing is what prejudice if any your wife has suffered by the creditoe failing to sign the agreement.The answer I suspect is none or very little - she appears to have been given a credit account with or without the signature and its a credit account that has clearly been authorised by the bank. Presumably she then made use of the facility?There have been a number of cases very recently dealing with these issues also and the underlining theme is that courts no longer tolerate mere technical arguments to avoid liability for debts.Your wife could argue that she has suffered some unfairness under s140 of the Act and try and get the agreement amended or set aside. But in the basis of the information you have given I cannot see any grounds to do so.Section 140A says:Unfair relationships between creditors and debtors(1)The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—(a)any of the terms of the agreement or of any related agreement;(b)the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;(c)any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).(2)In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).(3)For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.(4)A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.(5)An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C).]Section 140B says:Powers of court in relation to unfair relationships(1)An order under this section in connection with a credit agreement may do one or more of the following—(a)require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);(b)require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;(c)reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;(d)direct the return to a surety of any property provided by him for the purposes of a security;(e)otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;(f)alter the terms of the agreement or of any related agreement;(g)direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.(2)An order under this section may be made in connection with a credit agreement only—(a)on an application made by the debtor or by a surety;(b)at the instance of the debtor or a surety in any proceedings in any court to which the debtor and the creditor are parties, being proceedings to enforce the agreement or any related agreement; or(c)at the instance of the debtor or a surety in any other proceedings in any court where the amount paid or payable under the agreement or any related agreement is relevant.(3)An order under this section may be made notwithstanding that its effect is to place on the creditor, or any associate or former associate of his, a burden in respect of an advantage enjoyed by another person.(4)An application under subsection (2)(a) may only be made—(a)in England and Wales, to the county court;(b)in Scotland, to the sheriff court;(c)in Northern Ireland, to the High Court (subject to subsection (6)).(5)In Scotland such an application may be made in the sheriff court for the district in which the debtor or surety resides or carries on business.(6)In Northern Ireland such an application may be made to the county court if the credit agreement is an agreement under which the creditor provides the debtor with—(a)fixed-sum credit not exceeding £15,000; or(b)running-account credit on which the credit limit does not exceed £15,000.(7)Without prejudice to any provision which may be made by rules of court made in relation to county courts in Northern Ireland, such rules may provide that an application made by virtue of subsection (6) may be made in the county court for the division in which the debtor or surety resides or carries on business.(8)A party to any proceedings mentioned in subsection (2) shall be entitled, in accordance with rules of court, to have any person who might be the subject of an order under this section made a party to the proceedings.(9)If, in any such proceedings, the debtor or a surety alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary.]]If your wife can get her case in under s140A then she can ask for an order under s140B.Finally, one crucial question: when the defence was submitted did your wife admit or deny using the credit facility? If she accepts that she did use it then you will have a struggle persuading the Judge under the 2006 Act that simply because a signature is missing that the entire agreement should be set aside. In other words if she accepts that she has used a credit facility but wants to the Judge to set it aside the she will be starting from a position of disadvantage because what she is essentially asking for is the Judge to write off a debt because of such a minor technicality.I appreciate this may not be quite the answer you were hoping for but I have a duty to give you an honest and objective opinion.Alice

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