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Pre Action Protocol

Pre-Action Protocol Explained

(Letter of Claim and Reply Form under Pre-Action Protocol for Debt Actions)

The pre-action protocol for debt claims

If you have received a pre-action protocol letter  relating to a consumer credit debt  this means that the creditor or debt purchaser is preparing to issue a claim against you in the county court. You can find a copy of the pre-action protocol here (https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/protocols/debt-pap.pdf

The initial Information to be provided by the Creditor or debt purchaser is specified at section 3 of the pre-action protocol  as well as a template information sheet and a reply form in all cases. The letter should contain:

  1. the amount of the debt
  2. whether interest or other charges are continuing
  3. where the debt arises from an oral agreement, who made the agreement, what was agreed (including, as far as possible, what words were used) and when and where it was agreed
  4. where the debt arises from a written agreement, the date of the agreement, the parties to it and the fact that a copy of the written agreement can be requested from the creditor
  5. where the debt has been assigned, the details of the original debt and creditor, when it was assigned and to whom
  6. if regular instalments are currently being offered by or on behalf of the debtor, or are being paid, an explanation of why the offer is not acceptable and why a court claim is still being considered
  7. details of how the debt can be paid (for example, the method of and address for payment) and details of how to proceed if the debtor wishes to discuss payment options and
  8. the address to which the completed reply form should be sent.

The creditor or debt purchaser should also:

  1. enclose an up-to-date statement of account for the debt, which should include details of any interest and administrative or other charges added or
  2. enclose the most recent statement of account for the debt and state in the letter of claim the amount of interest incurred and any administrative or other charges imposed since that statement of account was issued, sufficient to bring it up to date or
  3. where no statements have been provided for the debt, state in the letter of claim the amount of interest incurred and any administrative or other charges imposed since the debt was incurred
  4. enclose a copy of the information sheet and the reply form in the form annexed to the protocol and
  5. enclose a financial statement form as annexed to the protocol

If you do not reply to the letter before claim within 30 days, the creditor may commence court proceedings.  If the information outline above has not been provided by the claimant or debt purchaser, then write back and tell them.

There is a difference between being pursued for an ordinary debt and a consumer credit debt because debtors with a consumer credit debt  have statutory protections provided under the Consumer Credit Act 1974 which ordinary debtors do not have.

Under the Consumer Credit Act before a creditor or debt purchaser can obtain judgment they have to have first complied with statutory requirements. It is irrelevant whether you owe money.  Creditors and debt purchasers call this a “technical defence” but what it means is that if they have not complied with their statutory obligations under the Consumer Credit Act  the penalty for breaking the law is that the creditor or debt purchaser  cannot enforce the agreement, or interest for the period they are in breach or in some cases cannot enforce at all.

Upon receipt of the pre action letter if you have not already made a section 77 or section 78 Consumer Credit Act Request now is a good time to do so.  If you have already made a section 77 or section 78 Consumer Credit Act Request and the creditor or debt purchaser has not been able to comply then there is no need to repeat the request.

For loan agreements to be enforceable in court a creditor or debt purchaser must have: –

  1. An executed credit agreement that is compliant with section 61 (1) of the Consumer Credit Act and its regulations.
  2. If the loan agreement was terminated early, a valid default notice served under section 87(1) of the Consumer Credit Act
  3. Have served statutory arrears and account notices
  4. If debt has been assigned the Deed of Assignment and Notice of Assignment.

For credit card agreements to be enforceable in court a creditor or debt purchaser must have: –

  1. An executed credit agreement that is compliant with section 61 (1) of the Consumer Credit Act and its regulations.
  2. A valid default notice served under section 87(1) of the Consumer Credit Act
  3. Have served statutory arrears notices
  4. If debt has been assigned the Deed of Assignment and Notice of Assignment.

Section 1

When completing the reply form unless your creditor or debt purchaser has proved the debt by production of the relevant paperwork tick box D in Section 1 of the Reply Form.   Do not tick Box A admitting you owe the debt just because you have an outstanding account balance, they have to prove the debt is enforceable in the court.

Request the following documentation unless you already have it

  • A copy of the original credit agreement
  • A copy of the document assigning the debt
  • A copy of all statutory notices relied upon by the creditor or debt purchaser to enforce the debt
  • A full statement of account,
  • If the creditor is not authorised by the FCA a copy of any agreement it relies upon as exempting it from authorisation.

Section 2

Unless you have decided to admit the whole debt without first  investigating whether it is enforceable against you do not  complete Section 2 or  the Financial Statement.

Section 3

If you don’t want to defend the claim, then complete this section and get advice.

SECTION 4

Tick BOX H if you have supplied documents with your BOX D statement and list all the documents you have sent.