Do you have to be told in writing a default is issued?

fj101

Hi all,

My husband has found out a default was issued by Orange on an account he believed was closed.

A letter from a debt agency was received in July 2011 regarding an outstanding balance.
On checking his credit file it appears that the default was issued in November 2010.

We are pursuing Orange regarding the reasons why the default was issued in the first place. But my question is do a company have a duty to let you know that they are issuing a default?

thanks for any help on this.

You-kip

Did you not recieve letters asking for payment?

fj101

no we didn't. one of many reasons why we are so annoyed about the situation!

he continued to make payments to orange every month... but apparently he had two accounts! not the one we assumed he had.

just trying to establish facts to come back at the recent rubbish answer to the latest letter we have sent. grrrr!

Buzby

No as it is default, (not a Default). The latter is a requirement under the CCA which states what you must do to rectify the breach.

A mobile contract is not regulated in this way - if you do not pay your bills on time, the late payments are shown on your credit file. If the contract is cancelled because of continuing non to late payments, the firm places you in default and advises the CRA.

Incredibly, lenders treat these non-court statements as if they were a CCJ. Which is both unreasonable and unfair. If people will continue to agree to their files being trashed in this way, the networks will obviously do it. If you vote with your wallet and go PAYG, they may (eventually) be minded to play fair.

willLeeds

Nope! You dont need telling you owe money.

You wouldn't walk out of a supermarket because no body told you to pay.

rizla_king

http://www.ico.org.uk/for_organisations/sector_guides/~/media/documents/library/Data_Protection/Detailed_specialist_guides/default_tgn_version_v3%20%20doc.ashx

Commented out a couple of things that do not apply to phone accounts or are out of date, but the general gist is the same.

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[STRIKE], in line with the requirements of the ‘fair processing code’. [/STRIKE]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. [STRIKE]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. [/STRIKE]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.

rizla_king

Note that is "strongly recommend". Not MUST.

fj101

thanks buzby - so mobile contracts arent under the CCA? seems madness. What a mess one thing can make of your credit file (aka your life!)

willLeeds - i understand the reasons why defaults are issued. our quandary is he was making payments to orange every month. We found out through the DCA that a "closed" account was not it fact closed at all!

fj101

ahh, strongly recommend..... aka don't actually have to. thanks for the information

Curr946

OP your joking, hubby had two accounts but only knew about one... so where did the other phone go? Orange would have sent bills etc before passing DCA. IIRC Orange add additional lines to the same account as to t-mobile etc. The only one i know that sets up new accounts for each line is three.

anyway, if you offer to pay whats owed on condition of default being removed, you might have a chance.