Rankine v American Express Europe Ltd and others
QBD 16 May 2008

Mr & Mrs Rankine had debts with various financial institutions. They profess to be financial advisers and raised various arguments in support of their claim that the debts were unenforceable.

1. They claimed that under s.78(6) of the Consumer Credit Act 1974, an alleged non-delivery of copy agreements rendered the agreements unenforceable; however the court heard evidence from the lenders to the effect that copies had been correctly despatched. The court also commented that, once an agreement had been terminated, s.78(6) would have no effect.
2. Where an agreement is not cancellable under section 67 of the Act but has been drafted as a cancellable agreement (granting a contractual right to cancel the agreement notwithstanding that there is no statutory right to cancel), the absolute bar to enforcement under section 127(4) of the Act (as it then was, prior to its repeal), would not apply. {This was the same issue as was considered in the Rankine v MBNA case above.}
3. Section 62 of the Act, read with Regulation 3(1) of the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, requires statutory copies of the agreement to be provided to the borrower. On the facts copies had been provided electronically by the lenders to the borrowers.*
4. Sections 87 and 88 of the Act, read with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, require default notices, complying with statutory requirements, to be issued. The court had no power under section 142(1) of the Act to make a declaration where a defective default notice had been served, as the power only exists in a case where the court could grant an enforcement order. Furthermore, the contentions raised by Mrs Rankine were factually and legally flawed.

The judgment commented that the context and purpose of the Consumer Credit Act 1974 was to protect the individual who is unsophisticated in financial affairs in contracts with unscrupulous and sophisticated financial institutions. It was not designed to help individuals in the financial services business to make money out of financial institutions through exploiting its undoubted technicalities.

* curious decision here - the s.62 copy would be provided at time of consumer's signature so is normally contained in the booklet containing the original agreement in the case of a credit card, or is attached to the original in the case of a conventional loan.

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