Quick question (and also a not-so-quick one!)

EHL123

The quick question: I know that credit accounts automatically ‘drop off’ your file 6 years after they were settled/closed, but can a lender choose to delete the account from your file earlier if they want to? Or does Data Protection legislation prevent them from doing this?


Now the long version! I have recently had a formal complaint upheld but I think the lender is fobbing me off, so an answer to the above question will help me with my next letter to them (googling isn’t proving much help unfortunately!). I’ve put the full background below and if anyone has the time to read it and give some advice, I’d be very grateful. It’s a very complicated story but I’ve tried to keep it as simple as possible.

I split with my ex in 2005 and moved out of the house we owned together, which had a loan secured on it. I wrote to the lender concerned (I’ll refer to them as LS) giving them my new address and informing them that my ex had agreed to take responsibility for the repayments until the property was sold. I asked for them to contact me if there were any issues with payments but I heard nothing from them so assumed all was fine. When the house finally sold in 2007, the solicitor wrote to me confirming that all debts secured against the property had been repaid in full (just the main mortgage and this loan). Then after no contact for three years, LS wrote to me last summer claiming I still owed them £17k. When I checked my credit file I realised they’d registered a default against me for this amount back in 2007 and it was still showing as outstanding. After receiving some helpful advice on MSE, I wrote to the solicitor who'd handled the sale. She confirmed the loan had been repaid, so I sent a letter of complaint to LS asking them to update their records and remove the default from my credit file. They wrote back a few weeks later agreeing to remove the default because of a technicality (they had inputted my new address incorrectly back in 2005 so the default notice never reached me – they managed to send their debt collection letter to the correct address, though! ). They said my credit file would be updated by the following month. But they said that the £17k outstanding balance was correct and I was still liable for it regardless of the default being removed. I wrote back disputing this and 10 long months of frustration have followed – but after dozens of letters flying back and forth I finally have some answers now.

It transpires that my ex had called LS before the sale with a sob-story about not having enough money to repay the loan. At this point he had 18 months of arrears outstanding, which I knew nothing about. He told them he was unemployed and in financial difficulty and needed to sell the house, but could only afford to pay £3k towards the loan (the balance was £20k). This was completely untrue – there was more than enough money to repay the loan in full (after repaying the mortgage and £5k he owed to me, he still walked away with a £50k deposit on his new house plus over £10k in cash) and he had a well-paying job. But he was obviously very convincing on the phone because without even contacting the solicitor to confirm the figures he’d given, LS agreed to release their charge from the deeds for a payment of £3k and turn the other £17k into an unsecured loan. There is no record of this ‘agreement’ other than their own file notes – the phone call wasn’t recorded, they didn’t put anything in writing and they didn’t get my ex to sign a new loan agreement. And when the solicitor wrote to them requesting the redemption figure, they just told her it was £3k and made no mention of an outstanding balance. So the solicitor paid the £3k believing it to be for full redemption, and my ex disappeared into the sunset with an extra £17k in his pocket – not bad for one phone call! Obviously he never paid another penny off the loan and so here we are.

I am now in receipt of LS’s final response letter to my complaint. After ‘reviewing their files’, they have admitted that they made no attempt to get my consent to the arrangement they’d made with my ex, despite the account being in joint names. They also admit that they failed to inform my solicitor of the arrangement despite it being a ‘material fact’ in the case, and failed to verify any of the information my ex had given them. They accept that if they had done any of these things, my ex’s deception would have come to light and the debt would not have existed. They also admit that they’ve been writing to me at the wrong address since 2005 and therefore never made me aware of any arrears or the default. And to add insult to injury, they’ve also informed me that they failed to remove the default from my credit file six months ago as promised due to an ‘administration error’, so it’s still ruining my credit rating now (my fault for not checking, I suppose).

To rectify my complaint, they have offered to remove liability for the £17k from my name and ‘update my credit file’ to reflect this. In return, they want me to sign a declaration waiving my right to take further action against them in the future (aka seek compensation – not that I’d planned to). I wrote to them to clarify what ‘update’ meant and told them that I wanted all traces of the account to be removed from my credit file because even if they removed the default and marked the account as settled, there would still be 18 months of arrears listed and this would continue to have a negative impact on my credit rating until 2013. I didn’t expect any problem with this request considering all the hassle they’ve caused me and the fact that the default has been on my file for an extra six months because of yet another error. But they’ve replied today saying that they will only remove the default and mark that the account was ‘partially settled’ in 2007. They say they can’t remove the arrears markers or delete the entire account entry as this would ‘breach Data Protection legislation’.

I just don’t think this is good enough – especially only marking the account as ‘partially settled’ when they’ve already admitted I’m not liable for the outstanding balance (and it would have been fully settled if they’d done their job properly!). And the arrears would not have ocurred in the first place if they'd written to me at the correct address to inform me that my ex had been missing payments. The only way to repair the damage they’ve done is for the entire account entry to disappear from my file, but they’re now hiding behind Data Protection legislation to avoid doing this. They didn’t seem to mind breaching DP legislation by sending my mail to the wrong address or recording false information about me for the past 4 years! :mad:

I intend to write to them again but I wanted to get some facts behind me before I do, so I’d really appreciate any advice!

Thanks!

GeorgieFTB

Hmm... I'm not sure what your position is here, sorry I'm not an expert. I know its not quite the principle of the thing but are you trying to get credit, like a mortgage? If yes then go for it, if not then you might just try for an easy life and ask for some compensation in return for signing...

I think the other thing you can do is dispute the default with experian et al, it will be marked on your file that its under dispute and might look better than just sitting there. It might be worth doing this no matter what else happens.

Hope that helps a little bit...

Gx

Superbiatch

It seems to me they are in a vulnerable position given their correspondence with you to sign the waiver. I'd speak to a solicitor with a view to sue the !!! off them for their incompetence and inconvenience they've caused you.

EHL123

Hi Georgie and Superbiatch, thanks for taking the time to reply

Georgie, luckily we're all sorted with the mortgage because it's in my husband's name, and I already had my bank account, credit card, mobile phone etc before all this happened. But it's annoying not being able to get credit for things because of someone else's error (other than this my credit file is fine and I've worked hard to keep it that way). Not that I'm looking to get into debt, but we're doing the house up and being able to take advantage of interest-free credit to spread the cost of big things like a kitchen would help us a great deal, as would being able to get finance for a newer car. Our old banger is falling apart at the seams and costing us a fortune in repairs, but we don't have the money to buy anything else. We don't intend to spend a fortune buying fancy things on the never-never, but it'd make life so much easier if we had an oven that worked and a car that started first time :rotfl:

Superbiatch my first thought when I saw the waiver was "well well, someone's worried!". But the company is administration so I doubt I'd be able to get any compensation out of them even if I could be bothered trying. I just want them to delete the account from my credit file and I don't know why they're being difficult about it(unless there is a genuine reason they can't delete it). TBH I thought they'd do anything to get rid of me after receiving my twentieth letter!!!

Culex

EHL123 wrote: »

The only way to repair the damage they’ve done is for the entire account entry to disappear from my file, but they’re now hiding behind Data Protection legislation to avoid doing this. They didn’t seem to mind breaching DP legislation by sending my mail to the wrong address or recording false information about me for the past 4 years! :mad:

It seems to me that the reason the entry was there in the first place was their maladministration and that they are indeed trying to use the DPA to conceal their misdeeds.

Consequently, you might be wise to take up this matter with the Information Commissioner’s Office or make a complaint. Were you to take the matter to court, you could get an order requiring that the data entry must be erased and, if you had suffered financially, also award compensation.

EHL123

Thanks for the links Culex, they're very helpful. I'd already threatened them with the FOS and the OFT, which led to them admitting their failures and agreeing to remove my name from the account. But if I can threaten them with a complaint to the ICO regarding the credit file entry, they might realise I'm not just to accept their excuses. I've been trying to find info online about the DPA in relation to credit file entries, but nothing is specific enough. The CRA websites all say the same thing - they can only amend/remove information with the lender's authorisation. Why would it say this if DPA prevents the info from being removed?

I shouldn't be suprised, because this isn't the first time LS have tried to hide behind the DPA. A few letters ago I asked for them to provide proof of the 'agreement' they'd reached with my ex, knowing this would only consist of their own file notes because they'd already told me they had nothing else. They replied saying they were unable to provide me with the notes because they contained 'personal information' about my ex's finances and employment status, and providing this information without his consent would breach DP. My reply to this was a) the notes concerned an account in my name and therefore they could not deny me access to them, b) we had already established that the information given by my ex was completely untrue, and c) they were quite happy to volunteer his 'personal information' in their previous letter when they first told me about his claims of being unemployed and in financial difficulties, because they were trying to justify the agreement they had made with him. I accused them of hiding behind the DPA to avoid revealing further information that would prove damaging to them, and threatened to escalate my complaint to the FOS and OFT if they continued to deny my requests. Funnily enough, the next letter I received was their 'final response' admitting all their errors and offering to remove the debt from my name! :cool:

Hannah_10

Well Culex beat me to it because I was going to say the ICO too.

Two other things strike me as worth a mention though.

1. You are very lucky. I read the first 7 words "I split with my ex in 2005" and my imediate thought was, tough luck, you're stuck with it. The vast majority of the time when a dishonest ex (or even an innocently disorganised or broke ex) is involved the person writing will have no other recourse but to pay up. You are very lucky in that your lender made technical errors. If they had not you would not have a leg to stand on. Most people who suffer because of an ex have no such opt out. Really do count your blessings on that.

2. Your readiness to get credit is a little concerning, given that you are having difficulties with credit currently. While I accept your difficulties are not of your own making, and that you got off lightly (no court appearance for example, no house reposession looming) you have had just a small taste of what can happen. Most of the posts I respond to on here are from people whose difficulties were in no way intentional, life has a habit of doing things you didn't expect it to. If you can afford to pay 16% for typical credit then you can afford to be paid 4% or so for saving and thus be 20% better off every year, no? A car that doesn't start first time every time is an irritation, not an actual threat to your wellbeing.

Now don't get me wrong, credit per-se is not evil, but it is a risk. In the midst of taking the fall out for the last time the risk did not pay off then maybe you should be focussed on clearing your name for the sake of fairness and not for the sake of being able to line yourself up for another risk? For mortgage purposes, then yes ok, fair enough, one requires a credit rating appropriate to ones own behaviour. Also for renting quite often too. But those aren't applicable unless you break up with your current partner. Worst case scenario here is that for another 2 years you wont be able to get finance, a loan or a new credit card. There is no more powerful motivator in this world like being told you can't have something to make you want it and I think you have unconciously allowed yourself to be suckered into that trap. Credit is not something you will actually need unless you find yourself single and househunting. Reliable cars start at £500 and reliable cookers at £0 on Freecycle. Or save. The bank pays you for that.

Don't fall for the old can't have it, want it more cycle. You got lucky this time.

EHL123

Hannah, I understand where you're coming from but I don't think luck had anything to do with it. The fact that I'm not being held liable for the debt isn't down to a technicality - the very reason the debt exists is because of their repeated errors. There was plenty of money available to pay the full £20k, but their incompetence allowed my ex to defraud them and walk away with an extra £17k in his pocket (£60k in all). They couldn't be bothered to pick up the phone and verify the information he'd given, and when the solicitor asked them for the 'full redemption figure' they told her £3k instead of £20k. If they had done their job properly, the loan would have been repaid in full and the debt would never have existed. That is why they've admitted I'm not liable - there should have been no outstanding debt in the first place. They are the ones who wouldn't have had a leg to stand on if it went to court, not me. And for what it's worth, I suffered at the hands of my ex for a long time before I found the courage to leave - physically, emotionally and financially - so I do count my blessings, every day.

When I left my ex I had nothing but I worked hard to rebuild my life, making sure I kept my credit rating intact by always repaying things on time no matter how much I was struggling, because I knew that one day I might need to get a mortgage or pass a credit check to rent somewhere. But now I'm married to a lovely man and I have a secure job with a good salary. We have a simple lifestyle and live within our means. We don't buy luxuries that we can't afford and because of this we don't have a penny of debt apart from the mortgage, which only has £22k oustanding and will be paid off in 5 years. If we do buy anything on the credit card it gets paid off in full at the end of the month. We also pay half of our income into a savings account each month, but this money is currently tied up with the work we're doing on the house (a cheap house means a cheap mortgage, but it also means work badly needing done to make it liveable - I'm not talking wallpaper and curtains, I mean heating, electrics, a working shower etc). We had central heating and a new bathroom fitted a few months ago and paid for it all in cash from our savings, which was great. But the next job is putting in a kitchen and although we've saved a lot of money, we won't have enough to cover the full cost until the end of this year. This means another six months of bare floorboards/exposed wires/holes in the ceiling (the oven is least of it) and then we'll have to empty our account to pay for it, leaving us with very little in the way of a safety net. Yes, we could do this if we had to. But being able to buy the kitchen on interest-free credit would allow us to get it done now and means that our savings would be earning interest in our bank account for the next two/three years instead of the shop's. I wouldn't go mad and spend a fortune just because I could, I'd still buy the cheap stuff I was looking at before. The same goes for the car - we've fallen into the 'cheap car' trap before. Our existing one cost us £600 off autotrader less than two years ago, and has already cost double that in repairs. We don't have £500 to waste on another dud. I'd rather use that money as a deposit towards a reasonably priced used car that will last us another seven/eight years, and then pay a fixed monthly amount for the balance. This would be much better than having big repair bills for our 'bargain' car when we least expect them, and still be driving around in a junk heap that's falling apart. The car not starting might sound like a small inconvenience, but try it when you're stuck in a petrol station at rush hour with a big queue behind you! :rotfl:

In a way you're right - not being able to get credit means we're not in danger of getting into debt. But we work hard and we're sensible with our money, so if we want to spread the cost of something once in a while, it'd be nice to have the option to do this without getting refused credit because of someone else's error

Culex

EHL123 wrote: »

The same goes for the car - we've fallen into the 'cheap car' trap before. Our existing one cost us £600 off autotrader less than two years ago, and has already cost double that in repairs. We don't have £500 to waste on another dud. I'd rather use that money as a deposit towards a reasonably priced used car that will last us another seven/eight years, and then pay a fixed monthly amount for the balance. This would be much better than having big repair bills for our 'bargain' car when we least expect them, and still be driving around in a junk heap that's falling apart. The car not starting might sound like a small inconvenience, but try it when you're stuck in a petrol station at rush hour with a big queue behind you! :rotfl:

Facts:

• The lender's admitted errors have prevented you from buying a serviceable car on credit
• The lender could be ordered to pay you compensation were you to take them to court
• The lender is currently in administration
• The lender may have cars among its assets

Thinking creatively, would it not be more satisfactory all round if the administrator to give you a car from the lender's assets, as a full settlement of any claim you may have in terms of compensation? In exchange for this, you would allow the erroneous default to remain on your file but marked "settled" and containing a note of correction that states that it was entirely the result of the lender's repeated errors - thus, the lender would not have to fight a court case which they would probably lose and which could adversely affect the value of the lender's company.

That solution appears to turn a lose/lose into a win/win.

Culex

EHL123 wrote: »

Thanks for the links Culex, they're very helpful. I'd already threatened them with the FOS and the OFT, which led to them admitting their failures and agreeing to remove my name from the account. But if I can threaten them with a complaint to the ICO regarding the credit file entry, they might realise I'm not just to accept their excuses. I've been trying to find info online about the DPA in relation to credit file entries, but nothing is specific enough. The CRA websites all say the same thing - they can only amend/remove information with the lender's authorisation. Why would it say this if DPA prevents the info from being removed?

It doesn't - I believe the legal term is that such an assertion is utter bollox.

Just point them to section 159 of the Consumer Credit Act 1974. The Information Commissioner or a court can order such removal or alteration to be done, without the data provider - the lender - having any say in the matter.

EHL123

Culex wrote: »

Just point them to section 159 of the Consumer Credit Act 1974. The Information Commissioner or a court can order such removal or alteration to be done, without the data provider - the lender - having any say in the matter.

Thanks again Culex, that's exactly the type of info I was looking for - I'll copy and paste this section of the CCA into my letter, as it clearly states they have the choice to remove the entry from my file or just amend it, which completely contradicts their last letter hiding behind the DPA. And I'll add that if they fail to remove the entry, I'll make a complaint to the ICO and seek compensation (or a car! )

They've already breached section 159 by not removing the default last year when they promised to (they said it would be done within the 28 days, it's still there now), so that'll be extra ammunition to use. Another thing - they've never marked the account as being in dispute, which it seems they should have done as soon as I started my formal complaint 10 months ago. It's laughable how badly they've handled this, it really is. I just hope my letter works and they'll delete the entry, as much as I'd love to get some compensation out of them, I really just want the whole thing to be over with.

Thanks again
:beer: