Default dispute

xleannex19

I am currently in the process of fighting a default date from an old current account with RBS.

They registered the default on 01/12/2007 however I disagree with the date and am trying to get it changed.

I entered a debt management programme mid 2006 after going over my overdraft limit with RBS and being unable to repay, so the default date of December 2007 is incorrect from my research.

I received a formal response from RBS on Friday stating that they disagree with my argument regarding the date of default.

To quote –

‘With regards to the Default marker registered on your Credit File, I have liased with our Credit Management Services. They confirmed that we initially issued a Formal Demand for the outstanding balance on 30 May 2006 when you entered their management. In normal circumstances, the Bank allows a six week period in order to allow you to make an arrangement to repay the balance before applying the Default against your account. In your case, the Bank allowed 18 months for you to arrange a way to repay the balance owed.’

This is the point I am trying to argue – they shouldn’t have allowed 18 months, from my research it should have been 6 months maximum meaning the default should have been applied by 30 November 2006 at the lastest which would in turn mean it would have now disappeared from my credit file. They stated themselves they usually only allow 6 weeks.

They are basically trying to argue that they were doing me a favour, but this has had a worse affect on me. During the 18 months before they applied the default I was in fact making regular payments as arranged by my Debt Management Company.

They are now stating that I should contact the Ombudsman if I am unhappy with their decision.

So I’m looking for a bit of advice, would it be worth responding directly to RBS or will they simply dismiss my argument unless it comes from the Ombudsman? Also, does anyone think I have a leg to stand on?

It might also be worth mentioning that before they sent this reply I received another one from them a month ago stating they would amend my credit file accordingly. They are now saying they sent that letter in error!

I realize that this default will automatically disappear at the end of this year but I would like to apply for a mortgage in the next few months and my credit file is good other than this so I don’t want it to affect me. :mad:

Willing2Learn

Hi,

xleannex19 wrote: »

‘With regards to the Default marker registered on your Credit File, I have liaised with our Credit Management Services. They confirmed that we initially issued a Formal Demand for the outstanding balance on 30 May 2006 when you entered their management. In normal circumstances, the Bank allows a six week period in order to allow you to make an arrangement to repay the balance before applying the Default against your account. In your case, the Bank allowed 18 months for you to arrange a way to repay the balance owed.’[/FONT]

This is the point I am trying to argue – they shouldn’t have allowed 18 months, from my research it should have been 6 months maximum meaning the default should have been applied by 30 November 2006 at the latest which would in turn mean it would have now disappeared from my credit file. They stated themselves they usually only allow 6 weeks.

They are basically trying to argue that they were doing me a favour, but this has had a worse affect on me. During the 18 months before they applied the default I was in fact making regular payments as arranged by my Debt Management Company.[/FONT]

I think you have argued the wrong point, when disputing the default with your bank.

The following is my interpretation of the guidelines.

The ICO guidelines state "Accounts should normally be filed as being in default where those payments due have not been received for six months." I've emboldened the words 'should normally' as this means the time-scale can be varied - it does not state 'must be filed'. Current accounts with overdraft facilities are one of the possible exceptions listed.

The guidelines, several times, make it clear that when considering whether to register a default on the account, a customer should not be worse off than someone who has made no effort to pay whatsoever, or in a worse positions than they would have been in had they not made an arrangement (such as a payment plan for example). I have taken these words from the ICO document slightly out of their original context but, I believe I have kept to the spirit of the guidelines in my interpretation.

You could consider changing the basis of your argument as I personally believe the bank are correct in their response to your original argument. It seems they didn't default immediately as the looked at history and your honest attempts to rectify and decided, at their discretion, to allow 18 months for you to repay before registering the default.

You might consider changing your argument. That you appreciate the bank giving the 18 months 'grace' as they didn't want to put you in a worse position by immediately registering the account as defaulted, and felt you may be able to repay in 18 months. You could now turn this round by saying their decision has ended up having the opposite effect and that you are worse off as a result. If you had not paid anything or made (and honoured) your agreement to pay via the DMP, you would have been better off as the default would have been registered a year earlier. The data held by the CRAs would currently be showing a clean record if you had never paid a penny!

You could try asking the bank to change the default date to a year earlier so that you are no longer in a worse position (as defined by the ICO). This would ensure the bank upholds the context of the guidelines (which was probably the bank's original intention) as clearly the result has been the total opposite.

Just to stress again, this all based on my personal interpretation.

battyboimatt

Do bare in mind that if you take it to the ombisman it can be 12 months + for them to look at it took 1 1/2 years for my complaint about Barclays to be even looked at

happy_bunny_2

I found that giving the FOS a prompt after 8 weeks of nothing resulted in them looking at my complaint. Happened twice.
Definitely worth referring, although it will be gone by the end of the year. If its preventing getting credit, might get some compensation if they find in your favour.

kirstle99

Can you really get these default dates changed? 2 of mine defaulted 12 months after my dmp (old overdrafts) and one credit card was defaulted after 2 years (all were well below the minimum payments).

I didn't think it was even possible to dipute default date? Hmm, every day is a school day.

fermi

Info on defaults --> https://forums.moneysavingexpert.com/discussion/3172602

xleannex19

Hi everyone,

Just to update you, I sent a reply to RBS on 4th Feb stating some of the helpful info Willing2learn mentioned, I also argued that as they had already informed me they would amend my credit file when they sent me a letter in error, changing their minds has had a detremental effect.

After receiving a letter on Monday Natwest (not RBS) asking for copies of all the letters I had sent and that they had sent me I called RBS yesterday. I spoke to a really helpful man who apologised for the error in the 'Natwest' headed paper and said he was looking into my complaint and would be back in touch in a few weeks. Needless to say I was expecting another brush off.

However, believe it or not less than 24 hours since our conversation he has called me back to say they are going to remove my default afterall as they don't believe it should have been issued in the first place as I continued to make payments after the default letter was issued and eventually paid the balance in full. :j

Also, just to add a little cherry on top, they are also going to compensate me £200 (which I didn't even ask for)!! :rotfl:

So I am delighted! Just wanted to thank everyone on here for their help. It just goes to show that if I had given up after receiving their first letter saying they wouldn't remove it I would be stuck with it for another year. Its worth persevering and more than anything, being polite rather than kicking and screaming seems to have got me alot further. And I am also £200 better off :-)

Thanks again to everyone!