Default added years later?

Littlered81

Hi all,

I wonder if anyone can give me some advice on a default on my credit file. I had a DMP, which I've now finished paying back, and checked out my credit report. I had a current account with Cahoot and paying back the overdraft I had was part of my DMP, which began in 2006. They accepted my offer of payments and I paid it all back, however according to my credit file they added a default on the account in December 2010, when I only had £30 left to pay them back, which they received that month. Can companies do that? It seems very unfair that I have worked hard to pay the money back, yet they are able to add a new default just as my payments are coming to an end. I always made every payment on my DMP.

fermi

Certainly sounds very unfair.

See: http://www.ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

That explains what a creditor should do on a DMP depending on what the repayment levels are.

Beware. That is a long and at sometimes confusing read.

However, there is a fundamental principle in that document:

That if the lender is to default the account, then it must be an adequate reflection of the conduct of the account, and for the purposes of people checking your file in the future discriminate between those who have tried to pay back and those who haven't.

In particular that by recording a default they should not place you in a worse position than someone who had made no effort to pay whatsoever.

By recording a default at the end of you DMP like this, they certainly seem to be riding roughshod over that principle.

edinburgher

In particular that by recording a default they should not place you in a worse position than someone who had made no effort to pay whatsoever.

By recording a default at the end of you DMP like this, they certainly seem to be riding roughshod over that principle.

Completely agree with Fermi - it's that sort of nonsense that makes me want to reduce my involvement with the financial sector wherever I can.

I also received a late default (two years into my DMP). I acknowledge that I breached the terms of the account and therefore deserved it, but it felt like a real kick in the teeth as I'd made every (albeit reduced) payment on time for 2+ years and had raised the payments 2-3 times in the same period.

Very annoying when mistakes with our finances lead to 'delayed punishment' beyond the pain of paying them back.

Littlered81

Thanks for the link, I shall certainly have a thorough lead. I know that several years ago I did get myself in a bad state financially, but I have worked very hard to pay everything back via my DMP. The defaults that were added at the time will therefore be gone next year, one was added a little later, which is annoying, but to add it five years later seems ridiculous to me!

Do you know how I can go about getting them to remove it?

edinburgher

Were you in default then? If so, I can't realistically see them removing it. Fermi might return with some specific pointers, but if you're in breach of your account terms I think they are entitled to add a default (no matter how s***** it is to do so when it's over £30 remaining)

fermi

Have a read through the link.

I posted the text of the document here earlier if it makes it easier to read?

---> https://forums.moneysavingexpert.com/discussion/3172602

If they hadn't defaulted you by that stage in the DMP, then arguably it's unfair to do so now.

Even if it was fair, then as previously said they shouldn't put you in a worse position than someone who made no attempt to repay. In other words, if it is OK to add the default now, then it should be backdated to the beginning of the DMP or whenever you originally broke the credit agreement.

You can make a complaint to the creditor, ICO, and FOS that what they have done is unfair.

Whether those complaints get upheld is a different matter?

This seems to be an issue where the creditors and regulators often just sit on their hands and effectively say "tough".

Then again, if you don't complain then the default will definitely stay as it is.

First point of contact might be phoning or emailing the ICO inquiry line to get their opinion on the fairness of what they have done?

https://www.ico.gov.uk/Global/contact_us.aspx

Littlered81

I had an overdraft facility on the account, which I agreed to pay them back as part of my DMP which I started in 2006. I never received a default notification, but I did move home around the time they sent it, so it could be that it went to the wrong address. I don't know if it counts as a breach of my account terms, I did pay the overdraft back in full.

I just wasn't sure if banks could just hold off giving you a default for years and years like that, wait until the last month that you're paying them back and then put a default on your account. I would hope in the future to get a mortgage (all the money I was spending on debt repayment now goes in to savings for this), but with a default sitting on my account for the next six years I know this isn't likely.

cassidy0111

I think a complaint to the FOS may cost the bank a fee? I am not suggesting that you should do this simply to cost them a few £££s but it might make you feel a little better about things.

However, I would complain to the creditor first and see if you can persuade them to remove the default. 0845 600 6014/ 01908 680130 should take you to Santander complaints department.

As my mum says "If you don't ask, you don't get".

Good luck and well done on the debt repayments.

fermi

cassidy0111 wrote: »

However, I would complain to the creditor first and see if you can persuade them to remove the default. 0845 600 6014/ 01908 680130 should take you to Santander complaints department.

Oh yes, Cahoot are Santander now.

I wish the OP luck with them.... Especially the complaints department.

Last few times I've seen things referred to them, the advisers have either not known their "arse from their elbow" on matters like this, or have told bare faced porky pies about the law and what the ICO and data protection requires.

cassidy0111

fermi wrote: »

Oh yes, Cahoot are Santander now.

I wish the OP luck with them.... Especially the complaints department.

Last few times I've seen things referred to them, the advisers have either not known their "arse from their elbow" on matters like this, or have told bare faced porky pies about the law and what the ICO and data protection requires.

Santander have gained something of a reputation for their complaints department. However, you do find the odd diamond in the coal as far as their customer service operatives are concerned. It may be worth a try!