Untested Legal Arguement (Hardship & Credit Reference Agency files)

hicskis

Has anyone checked their Credit Reference Agency Files (Experian and Equifax) against what you have actually borrowed (personal loans, overdrafts, credit cards).

If the two do not add up (which they won't) - you ought to be able to prove that lenders had not reported your true borrowings at the time you were incurring charges and interest costs - would that not create an Unfair relationship test between you and the lender.

In other words how can the lender under section 140a of the Consumer Credit Act and Regulation 5 of the Unfair Terms in Consumer Regulations (see Martin's February News Letter) prove that by invoking the clause that states "we may report information about your debts to third parties" that the relationship between you and the lender was fair when they failed to report your borrowings in the first instance.

This means they did not exercise due diligence (duty of care) when lending to you (Negligence).

This arguement would i believe work wonders if there were two lenders in play ie joint defendants.

This is an untested legal arguement but maybe worth a try - let me know how you get on.

natweststaffmember

You try it first and then report back

hicskis

I'm not owed any money by the banks. What i see is a clear legal basis for someone in Hardship to prove that there was an Unfair relationship with their lender whereby the lender by not reporting a person's true borrowings to the Credit Reference Agency's have exploited a loophole in the law and lent monies to people they otherwise would not have lent to.

How can a lender prove on a level of fairness that they exercised Due Diligence when lending when they are supposed to check the files of Credit Reference Agency's in the first instance (in Law that means the lender has a Duty of Care otherwise they are Negligent in Law).

Alpine_Star

Like Natweststaffmember said: try this ''clear legal basis'' yourself before encouraging others to do so and having them report back to you see if your hunch is right.

hicskis

As i have already said:

1) I am not owed any money;
2) This is "untested" - what i said was - is that i see a "clear legal argument" - so please do not twist my words Alpine Star - the Law is an !!!!
3) If anyone wants to try this arguement then try it first with the lender - i'm not suggesting that you go straight to the High Court and incur tens of thousands in costs;
4) If it works then post back - caus if it does - then others can follow.

Just trying to help
Hicskis

natweststaffmember

Can you explain in detail how this would work?
Would they do a data protection act letter to the credit reference agencies?
How would that work out on historic charges?
Why would failing to report any change to the credit reference agencies mean that it justifies a refund of charges rather than a simple letter of correction?

To be honest, let's have the debate on the finer points because if you have a significant argument then it's better we at least consider how it works but PLEASE DO NOT USE THIS ARGUMENT UNTIL WE HAVE(for others reading this).

BenS1

I can see the OP's point. In fact, I am in the process of claiming hardship against my old bank. Here's what I have so far:

·[FONT=&quot] [/FONT][FONT=&quot]The very fact that [Bank Name] decided to add the cycle of overdraft charges and the unpaid direct debit charge on the overdraft account onto what I owe to them is immoral and misleading on my files with Credit Reference Agencies. My point being that these charges make up £xxx.xx of the outstanding debt of £xxx.xx which is owed and is a breach of the Data Protection Act 1998 as the defaulted amount is inaccurate. More importantly, I should only need to repay what I owed: I did not decide to borrow funds to go over my overdraft limit, nor did I borrow funds to attempt to pay a direct debit.[/FONT]

DarkConvict

Not having a go at anyone, just putting my point forward. Problem with this is a time delay in processing information, and who has responsiblity.

30 days is considered a reasonable time, as such 30 days for the bank to send a figure and upto 30 days for the CRA to update the report, as such the figure can be upto 60 days out.

Also, lenders may send information on your credit status to CRAs, if a bank decides to stop, or only sends reports once per 3 months, or even once per 12 months. There is nothing to dictate what is an accurate figure as everyone differs, some accounts stay unchanged, whilst others are vioitile, no requirement would fit everyone.

Then also who is to blame for out of date data, the bank can only send the new information or requests for changes/removal, it is upto the CRA to actually change the visible report.

hicskis

OK - there are first two pieces of Law to consider:

Under section 159 (1) of the Consumer Credit Act 2006 (as amended) -

"A consumer given information under section 158 who considers that an entry in his file is incorrect, and that if it is not corrected he is likely to be prejudiced, may give notice to the agency requiring it either to remove the entry from the file or amend it."

1. The first step is to apply for the statutory report from the Credit Reference Agency's of Experian, Equifax, and Call Credit - these are the three major agencies in the UK. You can send a letter with a cheque for 2 pounds to them asking for your file. It may be possible to do this online for free as they often have a promotion running.

2. Check these files against your actual borrowings. What you're looking for is lenders that have not declared your borrowings or have grossly misstated them. Better still just compare the three reports against each other - you'll have clear proof.

The second piece of Law is Under the Data Protection Act (section 10)

(1) Subject to subsection (2) an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, and personal data in respect of which he is the data subject, on the ground that, for specified reasons -

(a) the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and

(b) that damage or distress would be unwarranted

3. Several points to be noted - the Lender is the Data Controller (not the Credit Reference Agency - you have an absolute right therefore under the Law to an accurate file with the Credit Reference Agency's - if it is not accurate you may be prejudiced. Therefore it is not up to you to add a Notice of Correction - it's up to the Lender to correct it at the source.

This is where i want to see a change in the Law which obliges Lenders to report a persons true borrowings, that after a year of this finance crisis they are NOT doing. The reason is that they PROFIT by lending to you.

4. Lenders have colluded by use of an agency called "The British Bankers Association" to create a set of rules called "The Banking Code" that stipulates how bank accounts, credit cards etc should be run. In that Code there is a paragraph that states that lenders "may - report information about your debts to third parties including Credit Reference Agency's)

This means by agreement they do not have too. That is collusion and anti-competitive.

5: The next step therefore is to check the individual terms and conditions of each agreement you have. You will find this clause in the section entitled "Credit Reference Agency's - what we may do with your data."

You will find it in every agreement as your contract will comply with the Banking Code.

Martin Lewis has summarized in his latest email on Bank Charges (see 03 February 2010) that consumers might be able to try their luck under:

Regulation 5 of the Unfair Terms in Consumer Contracts Regulations (UTCCR)

Unfair Terms In Consumer Contracts Regulations 1999

5. – (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

And under Section 140a of the Consumer Credit Act (CCA) which says:

“The court may make an order … in connection with a credit agreement if it determines that the relationship between the creditor and the debtor … is unfair to the debtor... “


I believe such a clause that permits a lender to not report a person's true borrowings to be grossly unfair - why?


Lenders check your credit files when making lending decisions to you - if lenders cannot see the true extent of your borrowings then they continue to lend to you.


If you keep to the terms of your agreements then you are good risk. If you only make minimum repayments then you are good business.



It's only when you are maxed out to the hilt and are struggling to repay (hardship) that they coin it in.


Do not forget that most credit cards start out at say 14% and probably hit near 100% by the time you wack on all the fees and charges.


It's what i said - it's all about profit.


Good Luck

natweststaffmember

BenS1 wrote: »

I can see the OP's point. In fact, I am in the process of claiming hardship against my old bank. Here's what I have so far:

I don't agree with the way you are arguing financial hardship and the point you made in that letter is a moot point cos no once tries to get into a cycle of charges but the charges themselves are not the reason you are in financial hardship. The reason is that income outweighs outgoings leading to arrears on priority creditors.

natweststaffmember

hicskis wrote: »

OK - there are first two pieces of Law to consider:

Under section 159 (1) of the Consumer Credit Act 2006 (as amended) -

"A consumer given information under section 158 who considers that an entry in his file is incorrect, and that if it is not corrected he is likely to be prejudiced, may give notice to the agency requiring it either to remove the entry from the file or amend it."
If the bank have reported to a credit agency that a charge has been made and that the person is one month late in a payment how do they argue that an individual charge is wrong?
1. The first step is to apply for the statutory report from the Credit Reference Agency's of Experian, Equifax, and Call Credit - these are the three major agencies in the UK. You can send a letter with a cheque for 2 pounds to them asking for your file. It may be possible to do this online for free as they often have a promotion running.
How does this apply to bank charges claims?
2. Check these files against your actual borrowings. What you're looking for is lenders that have not declared your borrowings or have grossly misstated them. Better still just compare the three reports against each other - you'll have clear proof.
This seems to be maladministration of the account and not unfair bank charges.
The second piece of Law is Under the Data Protection Act (section 10)

(1) Subject to subsection (2) an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, and personal data in respect of which he is the data subject, on the ground that, for specified reasons -

(a) the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and

(b) that damage or distress would be unwarranted
But is the information factually correct?
3. Several points to be noted - the Lender is the Data Controller (not the Credit Reference Agency - you have an absolute right therefore under the Law to an accurate file with the Credit Reference Agency's - if it is not accurate you may be prejudiced. Therefore it is not up to you to add a Notice of Correction - it's up to the Lender to correct it at the source.
What has that to do with a bank charges reclaim?
This is where i want to see a change in the Law which obliges Lenders to report a persons true borrowings, that after a year of this finance crisis they are NOT doing. The reason is that they PROFIT by lending to you.

4. Lenders have colluded by use of an agency called "The British Bankers Association" to create a set of rules called "The Banking Code" that stipulates how bank accounts, credit cards etc should be run. In that Code there is a paragraph that states that lenders "may - report information about your debts to third parties including Credit Reference Agency's)
The Banking Code ended at the end of October 2009 so any argument based on that is prior to the SC decision.
This means by agreement they do not have too. That is collusion and anti-competitive.
So we are going back to the current arguments already outlined by Martin 2 months ago.
5: The next step therefore is to check the individual terms and conditions of each agreement you have. You will find this clause in the section entitled "Credit Reference Agency's - what we may do with your data."

You will find it in every agreement as your contract will comply with the Banking Code.
Not from November 2009 since the Banking Code no longer applies.
Martin Lewis has summarized in his latest email on Bank Charges (see 03 February 2010) that consumers might be able to try their luck under:

Regulation 5 of the Unfair Terms in Consumer Contracts Regulations (UTCCR)

Unfair Terms In Consumer Contracts Regulations 1999

5. – (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
But you have to name the term and why at that point in time that it caused an imbalance in the whole contract based on the bank charges incurred.
And under Section 140a of the Consumer Credit Act (CCA) which says:

“The court may make an order … in connection with a credit agreement if it determines that the relationship between the creditor and the debtor … is unfair to the debtor... “


I believe such a clause that permits a lender to not report a person's true borrowings to be grossly unfair - why?


Lenders check your credit files when making lending decisions to you - if lenders cannot see the true extent of your borrowings then they continue to lend to you.


If you keep to the terms of your agreements then you are good risk. If you only make minimum repayments then you are good business.



It's only when you are maxed out to the hilt and are struggling to repay (hardship) that they coin it in.
That is utter nonsense, what about when you have a temporary shortfall that is then corrected. I don't see this argument at all.

Do not forget that most credit cards start out at say 14% and probably hit near 100% by the time you wack on all the fees and charges.


It's what i said - it's all about profit.


Good Luck

Credit card fees are reclaimable. Please can you tell me how this argument applies to bank charges. To help you, I have one simple argument: I transfer money to an account late and incur one charge for my car insurance(I then pay it when they represent their request to pay)/ This was the second time I was charged so no Gesture of goodwill for me.
Now, explain how I argue my case with the example above. The argument basics should be the same all round