December 31, 2009
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U.K. Lenders Score Victory In Court, Pt.1
Contract copies meet CCA requirements.Credit card companies realized a victory in a High Court in Manchester, UK as Judge David Waksman sided with the financial institutions in a court battle over a copy of the card's contract. The dispute found credit card companies and cardholders at odds as to whether a copy of the original card contract is legally acceptable evidence in debt disputes. Judge Waksman's ruling states that a copy of the credit card agreement is acceptable. In his statement, Judge Waksman also said "It seems to me to be likely that the number of challenges... will diminish significantly hereafter." The ruling will allow banks to present copies of old card terms and conditions that might have been so old that the hard copies were thrown away.
In accordance with the Consumer Credit Act (CCA), lenders are required to provide a copy of the card loan agreement to the cardholder within 12 days if requested. The ruling means that UK credit card companies will have an easier time collecting debt if the contract is lost or destroyed. It can often be a difficult task for credit card companies to produce the original agreement and typically destroy most old card contracts. It has been argued that some individuals were attempting to prevent lenders from permanently collected unpaid debt. However, Judge Waksman said the rule was in place to prove the agreement is authentic, but rather to inform consumers about the position of their card account.
Although Judge Waksman ruled that the credit card company could fulfill its responsibility to present a copy of the contract's terms and conditions, he made it very clear that lenders could not just invent a new contract. Contracts must be “based upon records held as to the debtor and the agreement he made.” The Judge's decision didn't fully side with lenders; consumers scored a few small victories as well. Read on to learn more about it.