DCA closed account still recorded default?

squashynose

Not sure if this is in the right place or not

A few years ago I made a one off purchase from Next, and like so many others, found they opened a credit account for me when I asked them not to, and I'd chucked out the catalogue and credit agreement they sent. Check out my other threads if you want the whole story, but basically they didn't take the money from my card, and I didn't find out about the account until I received a statement with additional charges on it. Anyway, I disputed it with Next who were very unhelpful, and the last communication was asking them to provide the signed credit agreement, which they obviously couldn't. That isn't the issue now.

They passed the account on to a DCA, Lowell to be precise. I disputed it with them last June, and after a couple of months received a letter stating that while they found the debt valid and owing, they would close the account and cease all further action. Win, or so I thought.

Turns out they've been recording a default on my credit report every month ever since. I contacted them last week to ask that this be removed, but received a letter this morning stating that even if the account is closed, they made a commercial decision to cease collection activity, but still have to record the default for 6 years.

So basically I'm hoping someone can help me. Is it right that even if they willingly close the account, they can carry on recording a default every month? For 72 months?

And can anyone offer some advice on the best way to move forward with this? I've just typed up a quick letter stating the original account was in dispute with Next, so they, Lowell, can't record anything, but would appreciate if someone could clarify that for me please. I've also asked them to provide the evidence that I owe this money, ie signed credit agreement, which I asked for last June, but they failed to give. Is that what I should be asking? Their letter states all the info about FOS and that I should go through them, but is that really the next step?

Thanks in advance for any help!

Tixy

Yes a default will stay on your credit file for 6years from the date of default shown on file. They can continue to show this even if the decide/agree not to chase the debtor for the outstanding debt.

Next would have registered an account and default in their name on your credit file, and when passed to the DCA they then put a new account on in their name and with the original default date.

When did you make the original purchase? a signed credit agreement is not required for an account opened online after April 2007.

They should be able to provide a copy of the online credit agreement that you agreed to, but even when they cannot courts have ruled that doesn't necessarily prevent them from recording the debt and default on your credit file.

squashynose

Tixy wrote: »

Yes a default will stay on your credit file for 6years from the date of default shown on file. They can continue to show this even if the decide/agree not to chase the debtor for the outstanding debt.

Next would have registered an account and default in their name on your credit file, and when passed to the DCA they then put a new account on in their name and with the original default date.

When did you make the original purchase? a signed credit agreement is not required for an account opened online after April 2007.

They should be able to provide a copy of the online credit agreement that you agreed to, but even when they cannot courts have ruled that doesn't necessarily prevent them from recording the debt and default on your credit file.

Oh it was well past 2007, just a few years ago. They have (or had at the time) very dodgy t&c's, that stated they 'may' open a credit account, but at checkout you had the option to a. pay up front, pay p&p and not open an account, or b. get free p&p and open one. I chose to pay up front and pay p&p, filled in my card details, but they never took the payment. So that, to me anyway, means I didn't agree to enter into a credit agreement. I have the p&p charge on there proving I selected not to open an account.

I guess the question is, can this default be recorded if it's in dispute? As I understand it, Next should not have even passed it on to a DCA while it was in dispute.

Tixy

Yes they can report the default whilst it is in dispute. You can add a notice of correction to your credit files to state that the account is currently in dispute.

Did you pay the account? or the part for the goods? does it show on file as satisfied or outstanding?

Yes, your next step would be to take your complaint to the FOS.

squashynose

Ahh right, okay! I will do that then, thanks!

I told Next I was happy to pay the amount they were originally supposed to take (still have the emails offering this) if they took the interest and charges off, but they refused. So it just shows as defaulted, orignal cost plus £30ish I think. To be honest I can't even remember how much the original amount was now!

Thrugelmir

Sometimes it's simply not worth collecting the debt. However the default leaves the sting in the tail for the debtor. As it's something financial institutions take very seriously irrespective of the amount. The default gives an insight into the debtors mindset.