Can i fight this legally?

alfieg40

Hopefully i will get then info through soon to the original reason for starting this thread, and I would welcome your input on this.

Shall i fight the defaults against the other two?

I have just noticed that the debt agency for Goldfish sent a letter to me asking for the arrears to be paid otherwise they will enter me into defualt. I have been paying by arrangement straight to Goldfish for 2 years and never missed. From what i can see, the arrears are basically the difference between my arranged payment and the minimum payment per the original credit agreement. I was never informed by Goldfish that i would have to pay the difference at some point. They accepted my reduced payments, i have never agreed to play catch up to bring everything back into line.

The other account with Capital One, again, i never missed an arranged payment, but i did not recieve a notice of default from them at any time, it just shows on my credit record.

Many thanks for your help, i appreciate it very much.

alfieg40

I have just realised that there is an oddity on my credit report that i do not understand. I had a credit card from Morgan Stanley, which along with other creditors, i entered into a DMP. I paid on time every month with no problems. Goldfish then bought Morgan Stanley, but they agreed my DMP payments as per MS, then the debt was bought by Cabot Financial and i continued my payments and infact raised them. However, my credit file show's no record of the original lender only Cabot. Within a couple of months of buying the debt, Cabot sent me a letter stating i would be put into Default as i mention above. Below is the info shown on my file:

Company name:
CABOT FINANCIAL (UK) LTD Account type: Credit card / Store card Special Instruction Indicator: Arrangement Special Instruction Start Date: 01/08/2008 Special Instruction End Date: 01/10/2008 Started: 05/10/2002
Cabot basically took on the account as of 1/08/2008 and then ended it two months later with the default. I had letters from them saying that i owed £789 in arrears and unless i paid they would issue a default, but i don't understand how this can be if the original creditor froze the account and agreed my payment plan. Have they acted in accordance or is this default removable?

Not all of my creditors that i pay via DMP issued defaults against me, yet 3 did? Why the irregularity with doing this?

Many thanks

Hippocampus

Firstly, once a debt is sold, the responsibility for reporting on that account lies with the new owner. In this case, Cabot.

However, Cabot will not have recognised your DMP, and it is very unlikely that they would agree to freeze any interest so long as you continue to play nice with them.

So what to do? Personaly, since you were basically dumped without any say in the matter by the original creditor, and Cabot don't appear to want to play fair either, I'd say that morally, they are both in the wrong. And so why should you play fair either?

Get a CCA request off to them (they'll send you back your £1 fee, as they don't seem to accept that they are now the creditor for the purposes of the CCA 1974), and find out where you stand LEGALLY.

Should they not be able to produce an agreement within the permitted timescale of 12 days (plus 2 for posting), your debt will at that point be deemed unenforcable, UNTIL they do come up with a valid agreement.

You could, at that point if you wish, write to tell them that you are ceasing payments until they comply.

Should a valid agreement still not materialise after a further month, I'd suggest it probably isn't going to. You would then be in a strong bargaining position, and might care to negotiate with them on that basis.

Mind you, do you know if any of the original debt was made up of charges and penalties? I'd SAR the OC and find out, as those would be reclaimable. In my case, the penalties and excess interest far outweighed the actual debt itself. Hence me continuing to tell Cabot to go and do one.

alfieg40

I have already sent requests to Cabot asking for details of charges and PPI as i want to claim both back. They sent me a letter in reply stating that they are compiling the data for my SAR. They also state that the original credit agreement and statements may not be held by Cabot, in which case i will need to contact the original lender.

With regards to my above post about the default Cabot have registered. They are accepting payments from me on DMP, they have done since they took the account on. I just don't understand how the original creditor did not issue a default, but within two months of having the account Cabot suddenly ask for unpaid money that the creditor never had, and then issues a defualt while still taking my DMP money.

Hippocampus

A question for the ICO then. If there never WAS a default recorded, then clearly they cannot default you of their own accord, since by definition, you have never defaulted with them if you have not missed a payment.

A default should only be recorded after missing 3 months payments in any case. And a default notice should be issued. Quite clearly, this is something that Cabot have not done.

I would complain to Cabot about it in the first instance, followed by a complaint to the ICO and the FOS, if they do not remove it. Cabot will say that it's nothing to do with the FOS. The FOS however, tell me diferent.

alfieg40

Right, i have just spoken to Cabot and this is what i was told...

The arrears on my account of £789.30 are basically made up from the difference of my minimum payment through my DMP vs the minimum 5% you have to pay per the normal credit card agreement. Now, my original creditor had never charged me this while on DMP, but as of February, when Cabot bought my debt, they started accumulating this difference in payment as an arrears. I do not understand how they can do this as the minimum payment on my credit card is payable to Morgan Stanley, i never signed an agreement with Cabot to pay a 5% minimum like you would on a credit card. The guy also said that as of the 1st October 2008 a new law came into effect that meant any accounts that were in a 'pre-default' state, which apparently i was, have to be automatically defaulted. Has anyone else heard of this law? I said that i had never defaulted with MS, just reduced my payments with them, and i have never defaulted with Cabot, they accepted my DMP agreement that i had in place with MS. So, the only reason i have a default from Cabot is because they charged me as per the credit card agreement with MS, which is surely void if Cabot now own the debt, and then asked for a lump sum which i could not pay. This amount was then used to issue the default against me under this new law that came into effect.

Does this all sound kocha to you?

I'd just like to add that when i asked about this new law and how it was applied he umm'd and ahh'd for ages and said that he is not exactly sure how, but it did apply to me. So the telephone staff have had no training about a law that has changed the whole process of the financial system.

Hippocampus

No, you are NOT pre defaulted. And if they DO wish to default you, they must inform you with a properly laid out default notice, that must allow you a time period to rectify your account.

For the record, Cabot can apply the same conditions as your original creditor. However, this also means that they CANNOT charge more interest than your original creditor. I just wonder if this means that if interest was frozen at the time of assignment, then Cabot must do like wise. Hmm. I'll have to consult my fellow Cabot Fan Club members about that. Interesting.

Anyway, if the wee boy on the end of the phone isn't sure which section of the act he's havering on about, I suggest you get a complaint in to Cabot and ask them to clarify in writing.

In any case, you did NOT default with MS, so the credit file should show AP rather than default, which is Arrangement to Pay. Nearly as bad as lenders are concerned, but does not stay on your file as such if circumstances change. Whereas a default is there for 6 years.

Sounds like Cabot are being their usual vindictive self. IMVHO of course.

Complain to Cabot about the default, tell them you want it cleared NOW, or to explain to you quoting the relevant sections of the CCA 2006 that backs up their claims. Also demand that they show you in writing where they calculate what the minimum payments would have been under the MS agreement. And if they can't do all that, you'll raise a complaint with the ICO and the FOS. And that's only for starters.

alfieg40

What i find very odd is that i have no record on my file of MS, would that have been replaced with Cabot now as they own the debt? I have never defaulted with Cabot either, they say that the reason for the default is that i could not pay arrears. I have letters here from Cabot in the following order

6th June - Letter to confirm that they accept my DMP payment after a review. A paragraph in the letter states that 'we'll review your account regularly, including any interest rate we charge and your monthly repayment amount' I thought that the interest was frozen on DMP?

6th October - Default notice is served. Now have to pay £789.30 before 26th October or else, basically.

10th October - Confirmation that they will accept my increased monthly payment. A paragraph refers to the above letter stating that i am not meeting the minimum payments under my original credit agreement with MS, so they have no alternative but to terminate the agreement and issue the default.

16th October - A notice of arrears, a payment has been missed. A paragraph states that 'this is not a final demand for payment but a formal statutory notice to notify you that your account is in arrears. Where we have accepted a lesser amount than your normal contractual repayments, it is important that you continue to make these repayments.' There are no figures of dates showing which payment has been missed or how much. I have not missed any payments!

23rd October - Your agreement is terminated. Letter states that 'you have not complied with the default notice and payments to your credit agreement have not been made at the minimum contractual level despite previous reminders. Your agreement is now terminated and you must pay the outstanding balance in full immediately.' When i called them about this they said don't worry, just keep paying your monthly amount.

This is all the correspondence i received from them. Unfortunately i am with Spectrum (now moving to CCCS) and their philosophy is to ignore it, so i dealt with Cabot myself in the main over this default period. From what you can see above have they played the game correctly?

Many thanks

Hippocampus

Absolutely they haven't. They send you letters claiming that you have defaulted and failed to rectify the situation, and you HAVEN'T missed a payment? Absolute nonsense. You need to SAR them then to get a record of your payments, reconcile them with your own records, and have it out with them. This is just not acceptable.

If there was no default with the original creditor, I am assured that a debt purchase company has no right to demand that payments are made in line with any original agreement. What needs to happen is, you come to an agreement with the new owner of the account as to what you can afford to pay, and if both parties aree, that is what gets paid. It is no longer a "credit card" agreement, and so cannot be reported as such in default.

As Cabot accepted your DMP and the amount you were paying, then that is what they should be basing their decisions on. And do bear in mind that they CANNOT charge a higher interest rate than was provisioned for in the original CCA with MS.

I suggest you write (never phone these people) an initial complaint stating that you feel agrieved that they have entered a default on your credit file, when no default was ever registered by the original creditor. That you understand that they may be entitled to continue the reporting of a default recorded by the original lender, but that Cabot has no right to place a new default on your files, particularly since you have never missed a payment. Payments and sums which they agreed to in the first place by their acceptance of your DMP.

Also demand that they provide statements to prove their assertion that you HAVE missed payments. And in any case, the very Act that they have been bandying around means that they are obliged to supply you with regular statements in any case. Perhaps throw in the Mr Maynard (Cabot's Mr Big) himself acknowledges that fact in this snippet from an article he recently wrote for Credit Management this month...

The regulatory environment and the provisions of the Consumer Credit
Act 2006 that came into force in October are also having an impact.
The responsibility of lenders to provide more information to debtors
about their accounts are being passed on to purchasers when portfolios are acquired increasing costs incurred when managing debt portfolios.
The upside is that this should make debt sale even more attractive to
lenders as it allows them to offload this administrative burden.

Hippocampus

Just realised... this made me laugh...

YOUR AGREEMENT IS TERMINATED.

WHAT agreement. And if it is terminated, tell them you'll shop elsewhere in future.

Sorry. No. I just got carried away.

Just put in a question and ask them what contractual obligations they are referring to, as you don't HAVE a contract with them. Let me explain.

Cabot will often say that they do not have to comply with a request for information under the Consumer Credit Act 1974, because they are not the creditor for the purposes of the act. I disagree. But that is by the by. What they DO say is, they are assigned your account under the Law of Property Act 1925. All well and good. But that does NOT mean that your contract and your obligations transfer with it. All that DOES mean is, they are entitled by law to sue for the amount that you owed the original creditor.

Now, they are NOT allowed to demand a higher rate of interest than the OC, because that would mean they are in a better position than the OC would have been in. And that is naughty. They CAN accept a reduced figure if they wish. In fact they can accept anything they like, so long as they accept IN WRITING that it is in full and final settlement of the debt, and it does not amount to more than the OC would have been entitled to.

OK. Now, since you HAVE no contract with them, you cannot by definition default on your payments. So they cannot default you. As I mentioned earlier, they can continue the reporting of a default, but not initiate one themselves.

HOWEVER. All this is just based on spur of the moment madness that crept into my brain these past few minutes. Before I ask anybody to act on it, bear in mind that it might be total bollix. But then again it might not. Let me run it by a man who knows, and I'll get back to you. I MIGHT actually be talking sense for a change.