1st Credit/HSBC - Default on Credit Report - Please Help!

webpresence

Hi all,

First post here but I've been a-lurking many times in the past. The site's a really valuable resource and I'm now hoping someone can help with some more direct advice...

The problem stems from an HSBC current a/c I had when I was a student, opened Nov 2003. I started a new account with Nationwide in 2005 which became my current account. I lost track of the HSBC a/c and moved house several times between 2006/2007 - from what I can tell it was left unpaid and in the red for about a year.

Now, I have a clear memory of receiving a phone-call from HSBC during which I paid the outstanding money. However I either imagined it or the payment wasn't processed as the next I heard was a letter from 1st Credit, and I couldn’t find any record of payment leaving my account... I held off 1st credit for a while whilst I checked things out with HSBC (which they were happy with) and once I was happy that HSBC hadn't received any money from me, I paid 1st credit in two instalments, over two months.

Whilst all this was going on, I got several letters for the same debt, from other collection agencies. To cover myself I wrote to 1st Credit requesting a receipt. This letter stated I needed the receipt due to ‘being pursued by other collection agencies and in order to pursue a complaint with HSBC’ and it can probably be assumed 1st Credit have this on file somewhere. I have the receipt too.

Now to my current problem: my credit report features a defaulted account from 1st Credit. Some strange things I’m confused about:

· The HSBC account that had the original debt is listed as satisfactory and settled – why does this not list as defaulted if they’ve passed on or sold the debt to a third party? Is this normal?
· 1st Credit were paid, and never mentioned to me that a default was to be raised: warnings featured at the bottom of all their letters along the lines of ‘further action will be taken if…’ but I always contacted them as soon as I received the letters and was never told action WOULD be taken;
· The defaulted amount on the 1st Credit account is listed as £152, NOT £303.73 (i.e. only the second instalment of the two that I paid)

Anyone think I have chances of sorting this out? If so where should I go next?

All help appreciated – my girlfriend and I are hoping to apply for a Mortgage soon having saved hard for the last couple of years, and now this unexpected default on my credit report will scupper any such plans…

Regards,
Mike

DarkConvict

The default will indeed scupper the mortgage for 6 years, simply because with a default its going to raise interest on the mortgage to an unaffordable level.

If a default was to be applied, it must be applied by the creditor first (HSBC), then a debt collector can take over the debt and put the default in there name. HSBC must still issue a default notice first before applying the default. And HSBC should apply it within 6 months of the account going into default, i.e. If opened in 2003, but it fell into overrdraft in 2005, and by 2006 it fell into the unauthorised overdraft. For a current accounts is the unauthorised overdraft that will trigger a default notice.

The HSBC account that had the original debt is listed as satisfactory and settled

This does not matter, the fact it says settled is a good fact.

1st Credit were paid, and never mentioned to me that a default was to be raised: warnings featured at the bottom of all their letters along the lines of ‘further action will be taken if…’ but I always contacted them as soon as I received the letters and was never told action WOULD be taken;

The default placed date on your credit file, needs to be within 6 months of the default happening as listed above. If not, then complaint to the OFT.
If no default notice was ever sent to you, send a SAR ( http://forums.moneysavingexpert.com/showpost.html?p=33791933&postcount=24 (£10) ) to HSBC. If no default notice was sent, the default is unlawful as you had no chance to correct the account. Unlawful defaults can be removed! If they will not remove it take it up with the FOS and ICO.

The defaulted amount on the 1st Credit account is listed as £152, NOT £303.73 (i.e. only the second instalment of the two that I paid)

That means 1st credit have not marked your default as settled, they only took off your first payment. If you have sent both payments the balance should be £0/nil and marked as settled.


Personally i would pursue HSBC over the default notice, don't be obvious about it because a default notice is a typed letter. They can type it tomorrow with an old date on it, so just send the SAR as above.
See what information you get back to see if you can challenge it.

webpresence

Hey DarkConvict,

This is already a great help; thanks for taking the time to reply! Not great news though I don't think

I do have a couple of follow up questions:

First - HSBC are covered on the 6 months thing - the a/c was closed with them 13/12/2007 and the default date on my report is listed as 18/12/2007.

I think I cocked this up for myself back in June 2008; when I got the first debt letters after (I thought) I had paid HSBC, I went into the branch and asked for the a/c details. I still have the print out that they provided me with, with the closure date etc. They sent the default notice 2 days later...

I'm guessing this is enough for HSBC to say they have complied with the law? If so, any point in bringing it up with FOS/ICO on grounds of my not receiving notice until late in the game? I actually made the first payment to 1st Credit in the same month that the default notice letter is dated... I have a horrible feeling your answer to this will be no

Re the way the default a/c is showing on my report - that's definitely wrong - it still has a default balance of £151 and it's been paid a long time ago. It must be worth getting this corrected - should I contact 1st Credit to do this?

Lastly (sorry for banging on!) - is it now 1st Credit or HSBC that has the authority to get the default notice removed? I know it may be head>brick wall time but I intend to pursue all avenues to try and get this sorted!

Thanks again for all your input.

Cheers,
Mike

DarkConvict

If the default is in 1st credit name, then it is them that 'own' the default. And only they can remove it. If you ask nicely and word the letter well, you >>>"may"<<< get it removed.

A default notice must give you time to correct the account, that is the point of it, a notice before a default. If HSBC did send one, they need to give you i think at least 14 or was it 28 days to clear the account. A chance to actually stop the default from happening. Its not uncommon for them not to follow this. I would bring this up and see if you can get the default over turned. Unless of course when you say you got the default 2 days later, that was actually your default notice a.k.a. the time to fix it before the default was applied, if you paid the account back then no default would show. If that was the case you were warned and given time to stop it then.
If you do feel you have been treated unfairly then do speak to office of fair trading, they may have something to say on the matter.

If its any comfort, each creditor scores you differently so the impact of a default can never be calculated. Some places only seek the last 3 years of address or 3 years of information. So defaults that are satisfied and over 3 years old have less impact. But still a satisfied default will have an impact compared to no default, so its best to fight it!

webpresence

Hi again,

Thanks once more for the input. A bit more positive than I thought! Got a couple of routes to try - may take a while but I will try to report back if I get anywhere...


Mike