Default/ settled account

savagej

Look at it from the perspective if someone owed you money, so you decided to put up a notice in the local shop paying the shop owner every week for the advertisement. Then the person you owed the money to who you never expected to get it back from again said they will pay it back to you on the agreement you have that notice taken down (which is a matter of fact so you are not defaming them but you are embarrasing them and affecting their reputation) would you a) tell them no I will make a change to it to say you have now paid up but you still for a while never did and expect them to give you the money or b) agree that if they pay you the money you will have it taken down and stop paying the shop keeper every week for the advert.

This is not a matter of law, this is not the British Legal System, this is a few companies setting out to make money (or avoid the loss of money) for one another. The original data is owned by the lender, they pass it to the CRA for processing (who then also own it) and share it "within a closed group". This is commerically sensitive information. The owner of the data can ask the CRA at anytime to take it down or have it amended for any reason they like whatsoever, it does not have to wait for the arbitary 6 year rule set in place a long time ago to be followed.

Edit: What exactly is supposed to happen after 6 years or during those 6 years, why 6 years, is that punishment without a fair trial (if these companies were not private but publicly owned the Human Rights Act would come into play here)? Is it time for them to repent for their sins? Is it so that Vanquis et al. can make a nice profit? Surely many banks etc are missing out on good prospects because someone defaulted through no fault of their own such as the massive job losses which have occured in this country.

There is no ruling by the Information Commissioner that once adverse data goes up and is fact it must stay there. It is not enshrined in law.

The only information it would be very difficult to get changed on a credit reference agency file is that which is a matter of public record and is fact. Otherwise anything else is up for negotiating with organsations shaing in closed groups for profit. Who profits when the original lender does not get paid? fact or not fact.

Edit: All a CRA is when it comes to a statutory credit report is a collection of adverts, some of public data and some of private data only made available to certain members who pay for it. They pay for it out of their commerical interests and because it is easier than them going around and collecting the information themselves. They pay to read it and they pay to publish it, the only company interested in the default staying put is the credit reference agency who are being paid to advertise it by the original subscriber who is possibly not getting paid. There is an arguement that the whole thing brings down costs in the end because it makes this data available centrally and defaults stop companies lending to people who cannot afford to make repayments. However, when it comes to individual companies (and most especially companies that buy debts on the cheap), the only interest they have is to their individual shareholders to make a profit (they owe nothing to other lenders and making them aware that someone might not be able to afford to make repayments) and if that involves getting paid back money they lent and taking down there advert that it was not paid on time that is what they will most likely do.

savagej

If peoples issue with a default is to stop those who simply stop paying their debts from accumlating more debt, surely what would be a better idea would be to keep the default in place until such times as the debt is paid then mark it completely settled just as if the contract was fulfilled and the default was never there. This would help those who through no fault of their own obtained defaults but can now pay the debt off and dont deserve to be punished with no credit or credit with very high interest rates. It is in no ones interest to keep these people in a virtual "debtors prison". While at the same time it would ensure those that have the "can pay, but dont want to pay" attitude dont get off "Scot free".

This would give people an incentive to pay back their debts, as at the moment a bankrutcy is as bad as a default, for some who have little in the way of assests, as soon as they got a default if they declared themselves bankrupt they would remain in the same position for 6 years as someone with a default when they could wipe out their entire indebtedness. The same as someone who got back into work or came into some money and could then pay of what they owed, as a satisfied default is in my opinion no good incentive to pay off a debt. Other than the moral arguement and there is little moral about capitalism and making profits.

KingElvis

But a default is there to show other lenders that (for whatever reason) the agreement wasn't stuck to and the person defaulted. What the lender decides to do with this information is up to them.

As long as a default was issued correctly I can see no reason why it shouldn't stand as a warning to others.

savagej

I understand your point entirely, I just think there should be some way of separting out those who through no fault of their own were unable to keep up repayments on there debts and for those who are deliberately playing the system.

There would be no need to use PPI, bank charges, incorrectly filed defaults as a way of getting them removed (which the "innocent" and the "guilty" can use now) if the person who had defaulted on their debt could then pay it and it was simply marked as "settled" with no mention of the original default.

This would mean that those who dont pay up are restricted for a suitable length for time and it would give an incentive to them to start paying or not get a default in the first place.

I still don't agree with the 6 year rule. That was put in place because the law of contracts in England means a contract become unenforceable after that time with no contact, but in this day and age people can and are tracked down far quicker so there is no need for such a long and punative period.

KingElvis

^^ Interesting, you mean like a default "Crime of Passion" instead of the usual default "First Degree Murder"?

Who would judge though?

savagej

The whole point would be the bar is set before the event begins. Default and pay it off, dont stay in jail for 6 years you get released and your recorded wiped. Default and don't pay it off because you either can't, so can't afford credit, or won't, and the default sits for a set length of time.

I refer you back to what what you would do if you were owed the money, would you continue to pay for an advert promoting the fact or would you take it down in return for getting back what is rightly owed to you.

If you opt for the third and current option were a default is marked as satisfied, but you are still paying for the advert to stay up, which is as bad to a main stream lender as a CCJ/DRO/Bankruptcy what incentive do people have to pay back anything (or not simply go bankrupt and wipe out all their debts), none if they are going to be outcasts for 6 years regardless in my opinion. Again unless you bring the question of morality into it.

Who made up this arbitary 6 year time limit and why does it stick to this day? Do you support such a time and why? What is supposed to happen to a person in during this 6 years? A CCJ/DRO/Bankruptcy does not come off of the record after 6 years they remain on the record for ever, it is just that the credit reference agency no longer advertise them.