Incorrectly given Default by Toyota

Cuilean

First of all, I apologise for this being so long winded!

I bought a Toyota on HP in March 2003. At the time, I was working in a steady job in the city, and the monthly payments were no problem. They came out of my personal bank account.

In 2005, I relocated to Scotland for work. Unfortunately for me, when the contract ended, it took my new employer six months to get me cleared for my new office (I work with kids and need to be police checked). During these six months, my car payments were being paid by my boyfriend. We have a joint account together, and he paid into that every month. Normally, there's only a little money in the joint account, as it's intended for paying utility bills and council tax.

In August, I was cleared to start work, and called Toyota to ask them to switch payments back to my personal account. I distinctly remember the phone call, as the girl on the other end made some comment about how I was switching back to my original account. She took that month's payment out while I was on the phone.

Today, I have received a notice of default in the post. Toyota claim that I have missed 2 payments, which made no sense to me as there's been plenty of credit available. A little digging around revealed that they'd not bothered to switch my direct debit back to my account, and have still been taking their money from the joint account.

Yes, I'm an idiot for having quarterly instead of monthly bank statements, and I'm an idiot for not having them confirm the direct debit switch in writing, but if it's their mistake, can I ask for them to take the default off my account? We're supposed to be signing for our mortgage in the next fortnight, and I have a horrible feeling that'll be declined if Toyota don't sort this out pronto. I've been very lucky and inherited enough money to pay off my debts this month (So Toyota can have the £500 stated on the default if they want it!), and I've just cleared my credit cards. I'm gutted that having worked so hard to clear my debts this year, one stupid admin mistake means I'm even worse off than I was pre-inheritance.

Please help me!

P.S. Mods, I apologise for posting the same thing in the Loans section, I now realise this is the right place for my cry for help.

southernscouser

I'm afraid I don't know too much about defaults but I'm pretty sure that if you pay whats owed within a certain period of the default starting it will be wiped off your credit report!

To be honest though I'm not sure how long! Maybe a month or so!

The best thing to do is phone Toyota and explain your situation, pay them whats owed and ask them to remove the default from your account as it was their fault. If they deny responsibility tell them that they took a payment over the phone from the intended account! They may remove it as a goodwill gesture!

file_wizzard

Have they actually issued a “registered default” on your credit file, I would be very surprised if they have as most agreements would normally need to be at least 3-6 months in arrears, and with no contact, or a statement from the debtor to indicate that they had no immediate intention to repay before a full “registered default” would be issued.


It may be the case that the have issued a “default notice” which is for internal reference only at this stage. This is normally used to frighten intentional non payers into action

What have they actually stated in the notice, that you should bring payments up to date by a certain time, or that they intend to issue a termination notice ?

If you give a bit more detail Im sure we can sort it out !

Cuilean

Crumbs, File Wizzard, that's given me food for thought. I'm not sure what info I can provide to help, but I'll let you know what I've got:

Up the top of the letter, it says "This is a notice of default issued under Section 87(1) of the Consumer Credit Act". I took that to mean that this letter was my "You've been given a default".

Under that, it says "Nature of breach: Failure to pay instalments of £***.**". Note that it doesn't specify any quantity of payments missed here. Under that, it says "Action required to remedy breach: You are required to make payment of £***.** before 30/11/05".

The next paragraph says (In bold writing) "If the action required by this notice is taken before the date shown, no further enforcement action will be taken in respect of this breach". Does that mean it's not a Default if I pay them then?

The rest of the letter is also a load of "If you don't pay, this is what we may do" scenarios, such as reposession or court action. Hacing spoken to a friend who's a lawyer up here in the Scottish system, it is harder for them to reposess than it would be in England, which may put them off rashly coming over and taking my car.

As for trying to contact me - after receving threatening phone calls last year, BT reject any "number withheld" calls to my line, so if they've been trying through a switchboard, it's possible they've fallen foul of my "Single white female" BT-assisted paranoia!

It would also appear that they've taken it upon themselves to send me a letter which thanks me for requesting an early settlement figure, which I never asked for.

If they've not screwed my credit rating, I'm handing the car back ASAP and getting myself a cheaper car - NOT on HP!

bettyr

From what you have said here, it has definitely not gone to the credit agencies so you are okay as far as your mortgage is concerned.

file_wizzard

Looks like it is just an internal notice to inform you that you are in breach of contract and that if you do not remedy the situation then a formal default notice will be issued.

You will have to look at the T&C’s of the agreement and evaluate any penalties / requirements for ending the HP agreement early.

With regards to your credit file and “rating” , I would imagine that they haven’t actually issued a registered default against the account, however you may well find that they have entered a couple of months late payment history, which will obviously not do you any favours if you make any more applications for credit in the next 6 – 12 months.

With regards to the late payment history, providing you can bring your payments up to date ASAP, and then approach the finance company in the right way, you may well be able to convince them that an admin error on their behalf with regards to the D.D has occurred, and ask then to remove any negative late payment marks from you file.

Percy_Vere

Talie wrote:

Up the top of the letter, it says "This is a notice of default issued under Section 87(1) of the Consumer Credit Act". I took that to mean that this letter was my "You've been given a default".

Sorry to be a bit doom and gloom but to me that looks like a correctly served default notice and you could well find it has been registered.

Under the t's & c's of your contract with them it will specify that you are responsible to ensure payments are made to them regardless of the method of payment you choose. This means that even though they may have failed to set up your direct debit you were still responsible for ensuring the payment was made. It is however possible that if you had a perfect payment record with them previously they will agree to removing the default - this doesn't happen very often in my experience.

Sorry it isn't better news.

southernscouser

Percy_Vere wrote:

Sorry to be a bit doom and gloom but to me that looks like a correctly served default notice and you could well find it has been registered.

Under the t's & c's of your contract with them it will specify that you are responsible to ensure payments are made to them regardless of the method of payment you choose. This means that even though they may have failed to set up your direct debit you were still responsible for ensuring the payment was made. It is however possible that if you had a perfect payment record with them previously they will agree to removing the default - this doesn't happen very often in my experience.

Sorry it isn't better news.

I disagree. If you read the rest of the letter it sounds more like a warning.

Percy_Vere

southernscouser wrote:

I disagree. If you read the rest of the letter it sounds more like a warning.

Well of course you could be right but 'warnings' about being defaulted don't usually include the correct terminology for a default - "This is a notice of default issued under Section 87(1) of the Consumer Credit Act".

In your previous post you put; ''I'm afraid I don't know too much about defaults but I'm pretty sure that if you pay whats owed within a certain period of the default starting it will be wiped off your credit report!'' As this is completely wrong I think I'll stick with my version - sorry.

Cuilean

First of all, thanks to everyone who backed me up. I've excaped work early, come home and called Toyota to ask what they were playing at.

The girl I spoke to said that yes, they had my single account details as the account that the money came out of, so she had no idea what money was doing coming out of the joint account. As expected, she didn't give a monkeys about circumstances or dates after I told her I could pay immediately, she just wanted my Switch details.

To cut a long story short, money paid. She said that since I paid within 10 days of the notice being issued, Toyota wouldn't be placing anything on my credit history, and certainly not a default. She didn't offer to put this in writing, so I think I'll be putting a request in writing, along with the rest of my concerns. Please let me know if there's anything that any of you think I should be putting in this letter.

Thanks again, everyone