ICO guidance defaults.

charliebarley

Hi,

I had an overdraft account with Lloyds which went overdrawn in August 2007. It was never brought back into line and in December 2007 I finally rang them and they increased my overdraft limit to cover the future charges that would be applied to my account and entered me into an 'arrangment to pay' schedule. Due to the impending charges that would be applied to my account I basically gave up and used the increased limit to pay off some of my other bills and let the account fail as I felt it was going to happen at some point anyway.

After reading the default guidance on the ICO's website I think I may have a case to get them to change the default date. The default wasn't placed until September 2008, 13 months after the account went into the red and last payment into the account and 9 months after the arrangement to pay and last payment OUT of the account.

The guidelines say a default should be placed within 6 months the initial breach and it seems to suggest that a default should be placed within 3 missed payments of an arrangement to pay. IS it me reading these wrong or should the default have been placed in March 2008 at the latest?

Regards

Charlie

Thrugelmir

Did you ever settle the account?

charliebarley

No, there has been no payment into the account since July/August 2007, Last payment out was December 2008. Account was closed and sold on to DCA in September 2008. Never replied to any of their letters.

Thrugelmir

Default was registered when account was closed. So seems logical in timing, given it was an overdraft facility.

Non settlement of the debt does you little favours.

rizla_king

There are several circumstances that can define a default on an overdraft.

Experian says that a default on an overdraft indicates.

• Your overdraft balance has been greater than your overdraft limit for more than three months and you have not agreed new repayments to bring the account in order.

ICO says a default should be filed when

• The customer has had an unauthorised overdraft for at least three months and the lender has demanded they put their account in order but the customer has failed to do so.

or

• The account has a debit balance (within or outside overdraft limits) but there have not been any or enough credits to service the debt for at least three months.

Complain to Llyods and demand the correct it telling them that you will take the complaint to the ICO and FOS if they don't.

charliebarley

Thrugelmir - I think you are wrong, read the following excerpts from ICO guidance....

The following is an indication of a breakdown.

The customer has had an unauthorised overdraft for at least three
months and the lender has demanded they put their account in order
but the customer has failed to do so

charliebarley

Rizla king - Do you think it would be best to approach in a friendly way, stating ICO rules and asking them to comply with them as a gesture of good will or just basically say these are the guidelines either you change the default date to comply or I will be making a complaint.

rizla_king

Up to you. On a formal complaint you have to give them up to 8 weeks to make a final response so if you mess about you are prolonging that.

charliebarley

This is where it get's complicated. I am waiting for the debt to become statute barred and there seems to be confusion as to when that will happen. Either late December when 6 years since last payment out of the account or sometime next year when it will be 6 years since they officially recalled the overdraft.

I don't want to write to them and jeopardize the debt becoming statute barred. I have looked on the FOS's website and they say you can file the complaint with them and they will take it up with the bank for you. Sounds like a good idea as it would get around me having to write to them.

rizla_king

I think you are going to have to decide which is more important. Getting the default backdated or letting it become statute barred.

A letter from the FOS as your "agent" in the matter could be acknowledgement.

charliebarley

I need clarification on when the statute barred date is. Officially it's 6 months from date of the overdraft being recalled but I have been advised by different people that 6 years from last activity on the account by the customer is accepted in and out of court as being the statute barred date.