Default on credit file

deshg

Hey everyone,

I was just following up on my previous post to see if anyone could advise if there's any regs/guidance i can quote to support my case that they should change the registered default date (see my last post for details)?

Any info would be greatly appreciated (otherwise isn't it just me asking if they will be kind enough to change it which presumably they'll say no to if they're not required to do otherwise?)

Thanks so much,

Dave

fermi

Information on your credit file must be accurate.

While you can argue some leeway regards a few months as to when a default is recorded, recording one 6 years after the fact cannot possibly be considered accurate under any circumstances.

So you have to tell them the default date is not accurate, and breaches ICO guidelines on the time-scales for recording a default.

That you will take them to the ICO and FOS if they do not backdate the default to a date consistent with ICO guidelines.

Then do that if they continue to refuse to change it.

deshg

Thanks very much for your speedy reply fermi, it's very much appreciated. I will send them a letter as you suggest (do you know where this should be sent to, do banks have a special dept or just to the customer relations team)? Thinking about it Lloyds TSB don't exist anymore so i guess i'll have to call around and find out!

Also do you have a link to the ICO guidelines that relate to this specifically so i can quote something (or even just for my own info)? I found the following doc linked from ICO site: http://www.scoronline.co.uk/files/scor/high_level_prinicples_document_final.pdf which says "As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are 6 months in arrears." but this is the only reference i could see?

Thanks so much,

Dave

fermi

Well at the time that default should have been or was added, that new guidance did not exist.

Instead the more detailed guidance was the only one that applied.

http://webarchive.nationalarchives.gov.uk/20100428141142/http://ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

or

http://www.experian.co.uk/www/pages/downloads/compliance/guidance_on_defaults.pdf

deshg

fermi wrote: »

Well at the time that default should have been or was added, that new guidance did not exist.

Instead the more detailed guidance was the only one that applied.

http://webarchive.nationalarchives.gov.uk/20100428141142/http://ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

Thanks Fermi that's very helpful and clearly states "Accounts should normally be filed as being in default where those payments due have not been received for six months."

This has made me realise perhaps why the default was delayed until 2009. This was an overdraft with a limit of £1500. As a result the interest was just being added to the OD and i guess they would argue that no payments were due as the OD was within it's limit. The account went over the OD limit at the beginning of Nov 2008 at which point they presumably tried to contact me to pay into the account which i obviously didn't do.

Does this actually mean their position is more reasonable than i originally thought as there weren't actually any required payments until it reached the OD limit in Nov 2008? Do I still have a reasonable case for them to change the date or will they just say they had no reason to know until Nov 08 that there were any issues?

Sorry for all of the questions and thanks so much for all of your help!

Dave

fermi

A breakdown for a default could certainly argued for the case where as it says in part 15...

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.

Again, while you could argue that a few months leeway on that might be acceptable, leaving the account to languish in it's OD for 5 1/2 years is certainly not.

deshg

Thanks so much for clarifying fermi, your help is massively appreciated. I have spoken to the ICO, FOS, FCA and MA today and none of them were as helpful as you have been!

Sorry to ask for more help but i have drafted a letter to them based on what you have said and wanted to see if you would be kind enough to read it and see if it says what you would expect and if there's anything i should add/change? The person i spoke to at the ICO said these guidelines were published in Aug 2007 so would only be applicable from then which i've said in the letter (as long as the default date is changed to July 2008 or before then it will not appear on my credit file anyway).

Thank you so much for all of your extensive help, it has been absolutely invaluable! My proposed letter is below:

To whom it may concern,

I am writing regarding an incorrect default date that is listed on my credit file pertaining to a Lloyds TSB student account and related overdraft that was opened around 2000 (according to the credit file it was opened in 1996 but this is not correct).

The sort code for the related account was XXXXXX, the account number was XXXXXXXX.

I had discussions with one of your representatives regarding this overdraft in 2010 (regarding the fact I moved house and didn't update my address and then forgot about the overdraft and did not receive any communication about it and the accrued interest due to the incorrect address). I received a confirmation letter on 11th Oct 2010 confirming that you had agreed to write off the full amount of the debt and would not look to me to make any further payments towards it.

The last payment was made into this account on 22nd December 2003 but I have recently checked my credit file and it states that the default date is 04/08/2009 which is approaching six years after the last payment was made into the account.

In section 15 of the ICO guidelines that were published in Aug 2007 it states:

"Breakdowns on current accounts will happen in relation to overdraft facilities. We recognise this is a complex area because of the range of factors affecting the relationship with the customer, and the indicators in paragraph 10 above are of limited relevance.

On these accounts the following are indications of a breakdown:
.....
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."

This clearly states that when no payments are made into an overdrawn account for a period of 3 months this indicates a breakdown even if the debit balance is within the overdraft limit. In this instance there was no activity on the account at all for 5 years and 9 months after the last payment into the account (and the date of the default/account closure). There was also no communication from my side regarding the account in any capacity or acknowledgement of any communication you may have made. Whilst a variation of a few months from the guidelines is completely reasonable, I hope you will agree that waiting for nearly 6 years with no account activity and no communication before closing the account and marking it as a default violates the ICO guidelines quoted above.

I am not questioning the default itself but am writing to request that you update the default date so it reflects the reality of when the default actually occurred based on the ICO guidelines, so as to ensure my credit file is a true representation of events. This should arguably be much closer to the last payment date in Dec 2003 but at the very least, given the above guidelines were published in Aug 2007, the default date should be roughly within 3 months of this date (which would be November 2007, or slightly later to allow some time to adhere to the new guidelines).

If there is any other information you require from then please let me know and I will provide it asap. I would greatly appreciate it if you could instruct the credit references to update the default date as soon as possible and let me know once this has been done so I can confirm it with them. This is currently causing issues with a current mortgage application so your help to rectify this as soon as possible would be greatly appreciated. If you do not update this within the allowed timeframe then I will have to refer the matter to the ICO and Financial Ombudsman to investigate.

Thanks very much,