Notice of default - will it appear on credit rating?

akoo

Hi,

I've recently called my insurance company to redo a direct debit which I've mistakenly cancelled. That was 10th of January. I've explicitly asked whether I have anything overdue and the answer was "no". Today (I'm writing it on 13th) I've received a letter with a Notice of Default stating that I've failed to make a payment on the day I've called them (10th).

Will it appear on my credit reports? I'm quite concerned about it as I'm trying to get good rating for future mortgage....

Update . They won't be able to produce signed copy of credit agreement, as I've never signed one. While renewing insurance , I've told them that I'll be unable to send them anything back for 3 weeks as I'm going for holiday and they told me that as far as they usually don't do it, they will set everything up without it.

PNPSUKNET

more to the point why have you not ensured your insurance is always paid?

izools

Last year when I cancelled my insurance in favour of a cheaper policy from elsewhere, I also cancelled the DD which was followed up with a notice of default from "Premium Credit LTD".

Never appeared on my credit file, never got chased up, and like you, the default notice was the first I knew of having entered into an agreement with a 3rd party creditor; I certainly didn't sign any credit agreement with them. Seems to have not been a problem in the slightest though.

akoo

Hi

PNPSUKNET wrote: »

more to the point why have you not ensured your insurance is always paid?

To be honest I've called them on the due date (they usually take it by direct debit on the last day), as I've mistakenly cancelled it just few days earlier.

I don't think it's fair they've issued me notice of default 2 days after without contacting me prior, especially when I've called them to sort the payment out before it went overdue. Having been told they will have problems setting DD on time, I would pay by card.

I don't really care about being covered, as I don't drive anymore. In fact my insurance got cancelled during the same call as I've admitted to getting banned from driving (I still wanted to keep policy to get NCD, but they didn't agree to that).

Btw. My phone records every single call, so I have the recording.

akoo

izools wrote: »

Last year when I cancelled my insurance in favour of a cheaper policy from elsewhere, I also cancelled the DD which was followed up with a notice of default from "Premium Credit LTD".

Never appeared on my credit file, never got chased up, and like you, the default notice was the first I knew of having entered into an agreement with a 3rd party creditor; I certainly didn't sign any credit agreement with them. Seems to have not been a problem in the slightest though.

Hi izools!

Thanks for the reply, made me feel more optimistic about my credit report and any further hassle I could face with them

In my case I was insured with them 2 years in row, and the first time they've send me agreement to sign, which I've done. When I renewed I've told them that I'm going on holiday for and won't be able to sign and send back any papers. In effect they've set two direct debits, one from company which used to be the creditor for the first policy and one with them (as it turned out they've started doing their financing themselves).

Tixy

When you get a notice of default it legally has to give you a chance to rectify the situation to prevent the default being registered - usually says something like repay this amount within 14 days. Providing you are no longer in arrears etc then the default should not be added (I'd say cannot be added but thats not strictly true, however if they did add one you'd have grounds to have it removed).

akoo

Tixy wrote: »

When you get a notice of default it legally has to give you a chance to rectify the situation to prevent the default being registered - usually says something like repay this amount within 14 days. Providing you are no longer in arrears etc then the default should not be added (I'd say cannot be added but thats not strictly true, however if they did add one you'd have grounds to have it removed).

It does say I have 14 days and if I pay within this time no further enforcement will be taken.

I'm very tempted to send them a letter requesting copy of the agreement which I've never signed.

pqrdef

akoo wrote: »

I'm very tempted to send them a letter requesting copy of the agreement which I've never signed.

That would be silly. They might never get the money out of you, but you won't stop them registering the default and screwing up your credit rating.

PNPSUKNET

akoo wrote: »

It does say I have 14 days and if I pay within this time no further enforcement will be taken.

I'm very tempted to send them a letter requesting copy of the agreement which I've never signed.

you never sign installement credit agreements with insurance, they can prove that you were provided a service though.

bobbydrake50

Do the insurance firms even report to the credit reference agencies? None of mine do and they are not lending money.

tigerlily43

PNPSUKNET wrote: »

you never sign installement credit agreements with insurance, they can prove that you were provided a service though.

I disagree, I have insurance with 1st Credit and I had to sign a credit agreement. It gives you a credit limit and your policy has to fall within this limit - as they charge for instalments this is probably the only way it can be done legally.

Therefore if I missed a payment I would expect a charge and default action in the same way as if I missed a payment on any other form of lending.

tigerlily