Home > Ask Our Experts > Should Bank Keep a Copy of Loan Agreement?

Should Bank Keep a Copy of Loan Agreement?

By: Sarah Clark (ILEX) - Updated: 4 Sep 2010 | comments*Discuss
 
Credit Agreement Consumer Credit Act

Q.

I took out an unsecured loan for around £75,000 with a major UK bank three and a half years ago. I recently requested that they send me a copy of the loan agreement as I had lost mine. I was told they cannot find it and it might have been confidentially destroyed. Can you advise me of the potential legal ramifications of this in terms of being obliged to repay?

(J.M, 16 April 2009)

A.

The Consumer Credit Act 1974 stipulates that a creditor (in this case, the bank) under a fixed amount agreement such as a loan, has a duty to give information to you on request in relation to that credit agreement. Legally, if you want the information, you have to make a request in writing and send the bank a fee of £1. Under the Consumer Credit Act, they have 12 days to respond to any request for information.

The Consumer Credit Act specifically gives you the right to request a copy of your executed loan agreement (and any document referred to within that agreement) together with a statement that shows:

  • the total sum you have paid to date
  • the total sum which has become payable but remains unpaid, including the amounts in question and the date when each became due
  • the total sum which will become payable, including the amounts in question and the date when each will become due (or if not ascertainable, the basis on which this will be determined.

So,according to the Consumer Credit Act, the bank in this case has clearly failed in their duty to keep and provide you with a copy of your agreement. As to whether this makes the agreement unenforceable - that's a completely different subject and one that would be dealt with by the courts on a case-by-case basis. If you were to refuse to repay the debt, it would potentially be difficult for the bank to enforce it, as the Consumer Credit Act states that:

Where a claim is based upon a written agreement:

A copy of the contract or documents constituting the agreement should be attached to or served with the particulars of claim and the original(s) should be available at the hearing.

This would clearly be impossible for the bank to provide if indeed they have destroyed them. However, they could still issue debt recovery proceedings, and if you miss payments on a loan agreement the defaults will be recorded with credit reference agencies which would result in damage to your credit record, not advisable in today's credit crunch climate. There is a possibility that being unable to provide a copy of the agreement could result in it being declared unenforceable, but it's a risky course of action, as since 2006 the courts have discretion to enforce an improperly executed agreement.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Following on from the above if the credit agreement was needed in order to prove a case of fraud and you could prove that over the last 4 years you had not made any of the repayments where would you stand?
A B - 6-Oct-11 @ 10:37 AM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Kim
    Re: When Cosmetic Surgery Goes Wrong
    Hi..had a mini tummy tuck 2 weeks ago. Absolutely devastated. Scar is really high and up to the top if my hip bones... I…
    21 September 2019
  • Upset
    Re: What Can I Do When Goods I've Ordered Don't Arrive?
    I purchased Keto Pure from Go Healths on 28 March 2019. I have being sending emails and they…
    17 September 2019
  • UPPO
    Re: What Are my Rights on a Faulty Television?
    2 yr Oled55 inch purchased from Richer Sounds. Failed attempt so far with LG but now addressing my consumer…
    13 September 2019
  • Shaz
    Re: Buying a Used Car: Your Rights
    Hi, my friend bought a used car from a well-known car dealer in Hemel Hempstead 6 months ago and a week ago it broke down (the…
    10 September 2019
  • Susan Moreland
    Re: Dealing With Cowboy Builders
    I got highly recommended by a manager, Richard, of a secondhand furiture and electrical shop, in Derby, to employed one of his…
    8 September 2019
  • iANa
    Re: Dealing With Cowboy Builders
    Trading Standards would be my first port of call with as much info you have about them and a list of other victims. Then I'd give…
    7 September 2019
  • David
    Re: Dealing With Cowboy Builders
    I started to get work done on my back garden In july, the firm called jj landscapes turned up at 5pm one night stayed 2 hours then…
    6 September 2019
  • IJA
    Re: Dealing With Cowboy Builders
    I was done out of tens of thousands of pounds by Neil Antony Packman and Zad Leonard McLeod trading as Smooth Transformations…
    6 September 2019
  • Yus
    Re: What Car Warranties Mean
    Hi i ordered a brand new A class from the dealer,which I received in June this year. A few days in to driving, I noticed a rattling…
    4 September 2019
  • Ang
    Re: Buying a Used Car: Your Rights
    We bought a second hand car which broke down within weeks but the garage responded quickly in having the car repaired in a…
    4 September 2019