Recent Court decisions have once again placed the spotlight on default notices – do the contents comply with the CCA and have they been served in sufficient time? As far back as 1998 the Court of Appeal (Woodchester Leasing Management Services Limited v Swain) ruled that a default notice needed to accurately state the amount of the arrears as the customer “needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right”. The ruling was accompanied by an unequivocal warning that lenders will not be afforded sympathy/leniency as they have resources to ensure the information on default notices is accurate.
For a copy of the full article please contact either Nigel Coe (Managing Director) or Jeremy Bouchier (Solicitor & CLO).
Hopes that a general “de minimis” exception could apply (initially raised by a High Court decision) have been substantially dampened by the recent Court of Appeal ruling in American Express v Brandon (where the default notice did not allow 14 days) and a first instance decision (deciding the notice was defective because it omitted the OFT information sheet). Recent case law also shows judges are quite prepared to “prefer” the evidence of well-prepared customers/defendants who have retained documentation and correspondence over the lifetime of the facility and are prepared to allege the default notice they received did not comply with Act. A consequence of the requirement of the default notice to be accurate and readily understood is that a customer (who is so minded) can easily check whether it is CCA compliant – and there is a wealth of information on the websites operated by both the regulators /consumer groups to assist.
From an internal point of view when a default notice is served can be influenced by a number of factors, eg how the status of a particular account will sit/fit within the lender’s own reporting systems. The message from both long standing and recent case law however is the overriding factor should be CCA compliance. Otherwise contested recovery action will be delayed (and become costly) when, in the light of favourable case law on “enforceability”, it should be easier.
Restons have a wealth of experience in advising lenders on all CCA issues including default notices.