Are they legally allowed to do this?

dark-knight_4

I've just paid of a debt to Arrow Global Ltd. which was originally an orange mobile phone contract. I've been checking through my paper work and cannot see any record of a notice of default. As far as I'm aware they must warn me of their intentions to default me in writing.

My debt was sold to them in October 2008 and they immediately defaulted me. There was no record of anything before this. Nothing from orange or them, it just appeared in Oct 2008, Arrow Global Communications Default.

I just got of the phone with them and told them they needed to notify me in writing of their intentions and they said they didn't. Because it's technically not credit and not regulated by any act they can do as they please. Their exact words.

Is this true? Are they allowed to just buy a debt and the same day place a default notice? If it's technically not credit as they say, then why is it on my credit file?

Thanks in advance.

fermi

There are 2 different things:

A legal default notice - which is issued under the Consumer Credit Act. Doesn't apply to mobile accounts, and is not essential before a default is recorded on your credit refernce files.

Notification of intention to file a default with the credit reference agencies - A step that a lender/creditor should normally (but not always) take before recording a default on your credit files.

The first doesn't apply at all here, because as arrow say, it's not a consumer credit regulated debt.

The second might apply, depending very much on the circumstances of the debt going into default.

fermi

Regards the second of those two.....

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

Notices of intention to file a default

32 Lenders should tell their customers about filing information with a credit reference agency as part of the account opening procedure, in line with the requirements of the ‘fair processing code’ 4. This explanation will not normally refer explicitly to defaults and will often be distant from the events which cause them. Therefore we strongly recommend that a notice of the intention to file a default should be served. Many lenders now subscribe to trade association codes of practice which require this. This practice helps the transparency of the credit reference process and may even prompt payment, so avoiding the need to file a default at all.

33 Notices to comply with Sections 13.7 of the Banking Code 5 and 7.5 of the Lending Code 6 should provide adequate warning. A notice of intention to file a default can be sent with a formal default notice served under Section 87 of the Consumer Credit Act 1974. Where lenders are not required to issue these notices, they can send an intention to file a default through a final demand, letter or relevant account statement, which should make clear not only the intention to file but also the date of the intended default. The date should allow the customer enough time to respond properly. Lenders who have to provide a notice of intention to file a default under a relevant code of practice should be aware that not complying with the code may be taken into account in any assessment of the fairness of their processing.

34 When a default occurs in line with the criteria in this guidance, and the lender has given the customer 28 days notice of the intention to file a default, then subject to paragraph 37, the lender may supply this information to a credit reference agency despite no advance warning when the account was opened.

35 It may not be necessary to serve a notice on all occasions. We accept there are cases when there should be no doubt over a default, for example, cases:

• involving fraud;
• where the lender has been notified under the terms of a bankruptcy or IVA;
• where there has been successful court action or repossession; or
• where a customer has made no attempt to resolve their arrears.

36 We do not believe that on its own a notice of intention to file a default amounts to harassing the debtor. We accept that lenders need to take care in the wording and use of notices to avoid the possibility of harassment.

37 If a borrower fully meets the terms set out in a notice of intention to file a default, it follows that the lender should not file the default.


4 The term used by the Commissioner to describe the requirements of Schedule 1, Part II, Paragraphs 1-4, Data Protection Act 1998. For further explanation see also The Data Protection Act 1998, Legal Guidance, Chapter 3.
5 The Banking Code March 2005
6 Lending Code 2004, The Finance and Leasing Association

dark-knight_4

Thanks for the quick reply.

I would just like to clarify, they are not regulated under the consumer credit act but they do need to issue a notice of intention to default under section 13.7 of the banking code? Am I right?

Thanks

dark-knight_4

Or is it the fair processing code? Just had a look at it again. Banking code doesn't apply to them?

DarnIt_3

You must of defaulted at some stage for it to be sent to a debt collectors! Irrespective of who put it on, the default is valid.

dark-knight_4

It wasn't defaulted by Orange. It was defaulted by Arrow Global after they bought it. There is no mention of Orange anywhere on my credit file. No payment history to orange previous to this default, no history of the account prior to Oct 2008, just 1 red 'D' for Oct 2008 saying "Arrow Global Ltd. Communications £121.50" They admitted that they bought the debt and immediately placed a default on the credit file. Orange have told me that they did not place the default.

dark-knight_4

Sorry to keep asking the same question but I still don't understand.

Could someone give me a yes or no to these question please.

Were they duty bound to issue a notice that they would be placing a default on my account?

Do I have any legal ground to argue the removal of the default?

Thank you.

DarnIt_3

No...you defaulted on an account they own, you were lucky orange didn't default you too.

Gordon_Hose

The Orange default would have been removed and replaced by the Arrow default. That's why you can't see an entry from Orange.

I doubt you'll get the default removed.