Sheriff Appeal Court case on credit card debt & prescription scheduled for 23 August 2018

A fresh appeal diet before the Sheriff Appeal Court was assigned today by Sheriff Principal Turnbull in PRA Group (UK) Ltd v. MacPherson, for 23 August 2018.  The new diet will allow time for the appellant's civil legal aid application to be determined by the Scottish Legal Aid Board.

The appeal case deals with a novel point of Scots law, which potentially affects many consumer credit cases across Scotland, where old credit card debt has been sold on to UK and international debt-purchasing companies and then pursued through the Scottish courts.

The appellant's position is that court proceedings for debt were not raised until over five years from when his monthly credit card payment was last due. The claimant and creditor's position is that the starting point for prescription is after it serves a default notice under the Consumer Credit Act 1974, which was before the five year prescriptive period in Scots law.

The appellant believes that the creditor is conflating UK consumer credit law and the enforcement of credit agreements, with the Scots law of prescription. The appellant contends that credit card agreements clearly make "provision" for the date when the whole balance due is to be repaid, which is the date upon which a monthly payment has been missed.

The appellant is represented by GLC's Mike Dailly, Solicitor Advocate.  The creditor is represented by Brodies LLP.

Sheriff Appeal Court case on credit card debt & prescription scheduled for 23 August 2018

Concern over the practice of buying & selling of older consumer credit debts; court action dismissed for absence of proof

Govan Law Centre has successfully defended an ordinary cause action at Glasgow Sheriff Court for an alleged consumer credit debt of £7,500.  Cabot Financial UK Ltd claimed they had purchased the debt from OPUS Credit Card (a trade mark of SAV Credit Ltd) in September 2011.  Our client had no recollection of ever having this credit card, and had no paperwork in relation to this credit agreement.

The action was defended upon the basis the defender was not due the debt. The pursuer was called upon to lodge in court the original regulated consumer credit agreement, a statement of how the debt was accrued and a copy of the assignation agreement of the debt. They failed to do so, and agreed to dismiss the action against our client with no expenses.

Our client's solicitor, GLC's Mike Dailly said:
"This case raises wider issues in relation to the general practice of the buying and selling of consumer debts in Scotland and the UK. Court actions are being raised when the purchaser of the debt would appear not to have proof of the legal constitution of the debt - that shouldn't happen. We are also concerned that debts are being pursued which have 'prescribed' and been extinguished in law. If you are being pursued for an old debt you should take advice from a local law centre, advice agency or solicitor as to your legal rights and liabilities".

In Scotland, consumer credit debts can prescribe and become unenforceable in law where no payments have been made for five years, and where the debt has not been subject to court or other legal proceedings, or been "relevantly acknowledged" by the debtor.  The relevant rule is set out in section 6 of the Prescription and Limitation (Scotland) Act 1973.

"Relevantly acknowledged" is defined by section 10 of the 1973 Act to mean where the debtor performs the obligation (e.g. by making a payment arrangement) or writes to the creditor and admits the obligation exists. A relevant acknowledgement means the five year time period begins again. If in doubt you should take independent legal advice to know whether a liability to make payment exists or not.

Concern over the practice of buying & selling of older consumer credit debts; court action dismissed for absence of proof