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Jamie-Law, Solicitor
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Experience:  Solicitor
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For uk lawyers only - consumer credit law my sister opened a

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For uk lawyers only - consumer credit law
my sister opened a mail order account with STUDIO in 2006 on behalf of our mother for whom she had power of attorney at the time. Mother wasn't happy with the last order which was faulted and no further orders were made. The company was supposed to send envelope for the return of the goods but when she rang up to chase them they told her that as it was a personalised baby-grow (with the name Olivia glued on instead of being securely stitched for safety reasons) they said it wasn't worth it as it could not be re-sold. There was no dispute over the unpaid balance which she presumed had been wiped out when the account was refunded with the faulty goods and in time they stopped sending her catalogues and special offers. In September 2011 my sister placed another order and she assumed that as the old account had lapsed she was given a new account number. Once again there was a dispute over collection of faulty goods and once again here account appeared to lapse in 2012 when she stopped making payments.When this matter re-surfaced this year she made a DPA application in July and the records show it was just the same account number she had 5 years ago. Since the bundle of docs did not include the actual credit agreement she signed she has been demanding a copy of this for the past 6 weeks together with other missing documents. They have acknowledged her emails via robot but not responded or sent the missing documents. She is adamant that she did not sign any agreement in 2011 and did not agree to the £20 "Default charge" that has been debited to her account 6 times according to the Transaction List they sent her.Question 1 - can this credit debt inc these charges be enforced in court if there is no signed agreement? Even now this company does not mention a credit agreement or Default charges on the Order Forms that they regularly advertise in tv guide. This is important because the alleged debt was sold on last August for £323.35 which is mainly made up of monthly credit charges and Default charges. Not only did Studio never write to her chasing this debt (according to the DPA records they sent) but the buyer Cabot International also did not chase this debt before getting CCJ against her in April this year. As it was done through CC Business Centre in Northampton the claim was not sent via recorded delivery and was never received so she did not get a chance to enter a Defence. She only became aware when Cabot's solicitor sent her the CCJ on 27th April. She applied to get the Judgment set aside till she could enter a Defence. She told the Court she couldn't enter a Defence because Cabot had not produced any details of the alleged debt they had bought from Studio. At the time she thought she was victim of ID theft because only many months later did she find out that the original debtor was Studio.
At the hearing in August this year Cabot asked for adjournment till October so they could request full details of the debt from Studio. It is listed for hearing 20th October but the other side has ignored her request for these missing details or agree to further adjournment until they are able to produce these documents as proof of debt. She can't seek adjournment herself without paying a £250 court fee. We suspect that they have gone quiet because they have discovered that she did not sign any credit agreement with Studio. If Studio can't enforce this debt surely it can't be sold on to a third party for enforcement through the Courts?Question 2 - should she complain to the Ombudsman about Studio trying to enforce this grossly inflated debt when she signed no credit agreement? Did Studio mislead Cabot by selling the debt as one which could be enforced because of breach of contract?Sorry this question is so long - I shall have to make a bonus payment for this.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Thank you for the detailed information. Please could you clarify the full amount of the debt which I understand dates back to 2006?

Customer: replied 1 year ago.
Hi Ben
no the original account was opened in 2006 by my sister Carmel so that our Mother could buy goods because she had dementia and my sister was managing her finances. The account was kept up to date with each invoice being paid in full out of respect for Mother who never ran up debts so there was never any interest charge debited to the account. There was a dispute over a personalised baby-gro that should have been embroidered but turned out to be stuck on with fabric glue. Carmel demanded they collect the faulty item and take issue with the supplier since glued on letters were hazardous to infants. Personalised items are sent direct from the manufacturer. Studio declined to collect the item as it could not be sold on and they said they had credited the account. That was the end of the dispute but Mother placed no further orders and the account lapsed, or so Carmel thought. In 2011 Carmel responded to a national advert and placed an order with Studio for her daughter for xmas stuff. She didn't notice that the account number had not changed (until recent DPA bundle). Carmel was not asked to sign a credit agreement on behalf of our Mother in 2006 and did not sign a new credit agreement in 2011 and Studio have failed/refused to produce a copy which should have clearly set out the terms of credit including monthly interest, if any, and any charges that might be levied such as "default" charges for late payments. Just in case the terms of credit were set out on the first order form, Carmel asked for further missing data from Studio but they have failed to produce this. They are still advertising in national tv guide but the order forms do not require a signature - indeed you can order by phone - and do not set out their terms of business. Also missing from the DPA bundle are any letters from Studio chasing the outstanding balance when Carmel stopped making payments after they were swallowed up by regular Default charges of £20 together with "service charges" which took up to 30% of her monthly payments. There was once again a dispute over some faulty items which Studio declined/refused to collect and credit her account. By 27/9/2012 the account balance was £323.35 of which £194.93 was credit charges and Default charges. It appears that in August 2015 last year this alleged debt was sold to Cabot International who then sued Carmel and got a CCJ because she didn't get the court papers and couldn't defend the action. I envisage the complaint to FCA will be that Studio failed to produce a signed credit agreement before selling the alleged debt on to Cabot but also conduct of the account itself. The List of Transactions supplied by Studio show that a credit limit of £100 was set and at first they did manage her account by holding back further orders till payments were made but not only did they not keep this up and allowed the balance to reach £135 and still fulfilled further orders but they actively encouraged Carmel to place further orders. I have proof of this but once you respond to this question I will raise a further question on whether to complain to FCA about Studio and whether we should include Cabot in this complaint because they should not be buying up alleged debts from Studio without first establishing that there was a signed and valid credit agreement. It's unfair that I actually asked 2 questions and you are only getting credit for one. So when you respond to the first part of this question please invite me to raise further questions and I will upload the documents that I want you to see.thanks

I have looked into your query in more detail but unfortunately it is not something I can assist with. I will therefore ‘opt out’ and a colleague better placed to deal with the nature of your query should hopefully pick this up soon. Please do not reply in the meantime as that will just assign the question back to me and you will experience a delay. Thank you

Hello my name is ***** ***** I will help you with this.

What is it you want to achieve?

Customer: replied 1 year ago.
HiI want to know if Studio can take enforcement action over this grossly inflated debt when they cannot produce a signed credit agreement? And if not, does it follow that Cabot International - who bought the debt last year - also cannot pursue this "debt" through the courts? If she did not sign her agreement to their credit terms how can interest payments and default charges be added to her account? Should she complain to the FCA over their conduct and possibly get the debt reduced or written off?

Just to be clear, at what stage are we with Court proceedings?
How much is the original debt and then how much is the CCJ for?

Customer: replied 1 year ago.
The hearing of her Application to Set Judgment Aside is listed for 20th October, having been adjourned by the other side so they could get details of the debt out of "archive" because Cabot bought the debt in good faith from Studio/Express Gifts but do not have any documents at all. Email to other side chasing these documents has been ignored. Several requests over past 6 weeks to Studio for copy of signed credit agreement and other missing docs have been ignored. Is it legal to withhold copy of a credit agreement like this?Goods ordered - including some faulty products - totalled £240.81 minus payments made of £115.16 left a balance of £124.55 as at 22.5.2012 but with the monthly service charges and 3 x £20 default charges totalling £96.84 having been added to the account the balance, according to Studio. was at that stage £221.39. When she could not get these charges removed from her account Carmel stopped making payments. From that point on (according to the data received) Studio just kept adding monthly service charges and £20 default charges to the account totalling £97.85 before they finally closed the account on 27.9.2012 with a balance of £323.35 whereas the actual debt was £124.55 including invoices for faulty goods that they would not collect.The CCJ is for £343.35 plus £107 costs totalling £450.35I am trying to establish that without a signed credit agreement agreeing to pay exhorbitant monthly interest rates which they call "service charge" and £20 Default charges for late payments did Studio breach FSA rules by applying these charges to her account every month.Further, the basis of their claim against Carmel - sold on to third party Cabot - is breach of a credit agreement and yet no such agreement exists. Did Studio mislead Cabot when they sold on this debt arising out of a breach of a credit agreement when so such contract actually exists.I will be so grateful for your help

All you have to establish at a set aside hearing is that you have 'some' defence. It is night a high test.

So if you can show you have some argument then yes it will be set aside.
But if there is no signed agreement then yes it will cause problems for the Claimant.

We also now that the OFT recommended £12 maximum charge and they are in breach of this.

Can I clarify anything for you about this today please?

Customer: replied 1 year ago.
When you say it will cause problems for the claimant it makes me nervous. I was expecting you to say that without a signed credit agreement Studio cannot take any enforcement action and they should not have sold this "debt" on to Cabot. Have been googling for info all morning and will post a new question. It's not fair to draw this one out by adding more questions when you only get credited for the one. Should I just post this new question or can you invite me to ask you further questions once I have rated your answer? I want to make sure I get you again so I don't have to explain all about the case again.

Yes I can answer further questions once you rate, just ask foe me.

Does that clarify?

Jamie-Law, Solicitor
Category: Law
Satisfied Customers: 6795
Experience: Solicitor
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