Court Decides Credit Card Debt Was Unfair

A Manchester man has had a £13,000 credit card debt wiped out thanks to a leading North West law firm.
Stephensons Solicitors LLP has just won a County Court case for a client who found himself in debt after taking out a credit card.
Mr Traynor initially took out the credit card when he was approached in Sainsburys supermarket seven years ago. He completed and signed an application form in store and received his card a few days later through the post.
In late 2005, his business was not doing well and he began to struggle with the repayments. His credit limit had been continually increased without him requesting it and with interest and late payment fees mounting up, his debt had risen to more than £10,000 by April 2006.
Mr Traynor said: “After failing to make my minimum monthly payments I was regularly contacted by my credit card provider. I tried to explain that hopefully I would be able to make repayments if my income increased. In September 2006, I started making nominal repayments of £1 per month”.
However, Phoenix Recoveries (UK) Limited later acquired the debt and in February 2008 they issued a County Court claim to recover the outstanding amount – which by now had reached £13,223.67.
Sarah Hood, a consumer solicitor at North West law firm Stephensons Solicitors LLP, successfully defended the client against the claim after it was discovered that he not been supplied with what are known as ‘prescribed terms’ when he first took out the card.
Before the trial, Phoenix produced one further document which contained the prescribed terms, but it was not signed by Mr Traynor and was clearly not provided to him back in 2002. The Court agreed the agreement was unenforceable and ordered Phoenix to pay his legal costs.
Sarah Hood said: “Often credit card companies are unable to produce a credit card agreement or other document signed by the debtor containing the prescribed terms, such as a credit limit or a sentence indicating that the credit card company will decide this limit from time to time.
“Most requests for a copy of the agreement result in the disclosure of a signed application form that does not comply with the Consumer Credit Act 1974.
“If you entered into a credit card agreement before April 6th 2007 and your credit card company cannot produce a signed document containing the prescribed terms, then there is an argument that they cannot enforce the agreement.”
Each case has to be considered on its own merits but this case illustrates that defending a county court claim in relation to a credit card debt can have a positive outcome.
Liam Waine, partner and head of the consumer contract department at Stephensons added: “Many people may consider this result to be unfair against the credit card company but the rules governing the content of credit agreements are inflexible and designed to protect the consumer. It’s the responsibility of the creditor to ensure they comply. The onus is on them to provide an enforceable document if they are hoping to obtain a county court judgment against a consumer who has failed to meet the repayments.”
Mr Traynor said: “I am extremely grateful to Stephensons for helping me win this case and getting the credit agreement made unenforceable in a court of law. It is a great weight off my shoulders.”