McGUFFICK V ROYAL BANK OF SCOTLAND PLC

[2009] EWHC 2386 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Flaux, 6 October 2009

Banking - Bank failing to comply with notice requirements of Consumer Credit Act 1974, section 77 - Effect of agreement becoming unenforceable - Whether bank entitled to report default to credit reference agency - Consumer Protection from Unfair Trading Regulations 2008 - Data Protection Act 1988

This was a test case on the effect of section 77 of the Consumer Credit Act 1974. The section provides that a creditor under a fixed-sum regulated credit agreement must, on request and within 12 working days, give the debtor a copy of the executed agreement and a statement showing the total sum paid, the total sum payable with due dates and the total sum that is to become payable with due dates. The agreement is not enforceable during the period of default. Flaux J held that: (1) the bank's rights were not extinguished by reason of non-compliance, but simply ceased to be enforceable during the period of default; (2) where the debtor was in default at the time, the bank was not precluded from reporting to credit reference agencies, disseminating personal data, demanding payment, issuing a default notice, threatening legal action, and instructing a third party to seek payment - none of these things amounted to enforcement; (3) the Consumer Protection from Unfair Trading Regulations 2008 did not permit a debtor to seek an injunction preventing a reference to a credit reference agency - the Regulations did not confer any civil remedies; (4) there was no breach of the Data Protection Act 1988, as reporting to a credit reference agency was fair and lawful data processing.