Default applied on/after partial settlement.

jbutleruk

Hello folks.

This is my first post on here so be gentle.

I had a student overdraft with Natwest that i hardly used while at university (once it was full). Around £1500.00

After some years of my sporadically putting a bit of money in and out the bank decided to close the overdraft facility and demand repayment. At the time i had the typical bullying tactics from the debt collection agencies "pay now or you will die" and so on.

Eventually i arranged a small repayment plan for around £10 a month (i was still at uni and poor).

About a year later i cleared the balance with a partial settlement after my grandfather passed and left me some money.

I made a partial settlement and on the 2nd of April 2013.

However looking back retrospectively, on the 31st of March 2013, a default was applied to the account. (my credit file shows this)

After speaking with the bank, they say the default simply has the incorrect date and should be placed on the account at around 2011.

HOWEVER before clearing the balance there was no default on the account at all!!!

Sneaky...

I argue that at the time of making the partial settlement i insisted over and over on the telephone that the account would remain the same, with the same account status etc. I was categorically told it would do so. I remember this specifically because i wouldn't have cleared the debt knowing Natwest would apply a default if i had.

Natwest say they will move the default date to 2011 and that the default is applied correctly.

I argue it shouldn't be on there at all.

When should a default be applied, what is the definition etc? Is this fair and correct?

Furthermore, my account shows 6 non-payment markers leading up to the partial settlement, however it also shows the debt owed to reduce by £10 each month, clearly showing that i made a payment.

I dispute that these non-payment markers should be on my credit file too, it was an overdraft after all and i had no set repayment mandated, however i fully admit not to using the overdraft as was intended.

I honestly feel 100% that the default was just applied in spite, after i partially satisfied the debt for around £700 and they had to write off around £600.

I am to appeal this to the ombudsmen, any advice?

How do i argue this?

Many thanks in advance money experts.

matttye

Unfortunately this is never going to end the way that you want it to.

When Natwest demanded back the overdraft and you didn't pay it back, you defaulted. They are therefore well within their rights to file a default and it is a true history of the account. Lenders have a responsibility to report the true history of the account to credit reference agencies.

There is therefore no possibly way that they can remove all of the adverse information, because this would be misleading.

You can complain about them not holding true to their word. They might offer you a little compensation, but I think you'll most likely either get a denial or an apology. Do you have anything in writing saying that they won't change anything on your credit report? If not, they could just deny ever saying that and you've got no firm evidence.

This is why such full and final settlement agreements should always be in writing.

I stress that even if you do have it in writing, I don't think you'll get the information removed. It will just strengthen your basis for complaint.

Thrugelmir

jbutleruk wrote: »

After some years of my sporadically putting a bit of money in and out the bank decided to close the overdraft facility and demand repayment. At the time i had the typical bullying tactics from the debt collection agencies "pay now or you will die" and so on.

If you had read your terms and conditions relating to the overdraft facility you would noticed that overdrafts are repayable on demand.

As far as getting the default totally removed is concerned you've no chance.

rizla_king

Only chance is to take it to the FOS and let them decide whether it was fair or not.

They make some damn weird decisions sometimes, so you never know you may be in luck.

jbutleruk

Thanks folks.

I just made it clear on the phone when paying this debt that i wouldnt be defaulted, then for them to apply it the same day and settle the debt a few days later is bad taste IMO.

If i could prove when they applied the default in relation to me clearing the debt would that be of any use?

rizla_king

Don't see how it would be. They were just correcting the status of the account as you should have been defaulted.

Complain to the FOS if you feel its unfair. That is the proper way to take this forward.

SRT81

I was under the impression that an account had to be defaulted for a lender to even consider accepting a partial settlement, and the same for it to be passed out to DCAs?