Legality of a Default

PaulW922

Hi MarkChristie

Some very unhelpful posts here aren't there?

There does not need to be a credit agreement under the CCA in order for a default to be registered at a credit agency. The default means that the relationship between you and the bank has broken down. The most common reason would be that a borrower has defaulted as per the CCA on a credit card or loan but it does not have to be. For example, a current account with an overdraft has no formal default notice process but can still go into arrears and end up being enforced.

The credit agencies publish guidance to lenders over this which the bank will be of the vie wit has followed, and so I would suggest the questions you need to ask yourself are:

(a) Do you owe the bank the £1000?
(b) Has the bank acted reasonably in how they dealt with the matter?
(c) Hav you acted reasonable in how you have conducted yourself? (That is the tricky one!)

I would suggest you answers, based on what you say above, should be (a) yes, (b) yes in so far a asking you to pay it back are concerned but maybe not over the default and (c) maybe not.

The latter is because of the following:

1. You say that the bank wrote to you about the credit and said they would take £100 a month. You didn't notice for there months. Well, you must have known because they wrote to you about it? Is it really the case that you didn't address the issue?
2. You did not, apparently, take the initiative to contact the bank about the matter and discuss different terms?
3. You give the impression, perhaps wrongly, that you are trying to avoid paying the money back. Did you really not know the extra £1000 was there?

If it were me I would probably look to repay the money over a period that suited me and get the default wiped in that it was cause by the bank's error (grossly incompetent error) and not yours. You could try the FOS again, depending now hat your initial referral was about (the default or the debt) or go to the Information Commissioner.

Maybe not what you want to hear but people on the forum will be looking at this from a different perspective.

ALIBOBSY

Paul seems to have the correct way of looking at this. Personally I would go at this from a point of view that the 1000 (or prob 800 now from your postings) will have to be paid back, but that them expecting 100 a month was unreasonable treatment given your redundancy.

Could you afford the 100 a month now? I would work out an affordable monthly payment and state you will repay at this rate, but on condition that they remove the default as it was put on unfairly against you.

Ali x

fermi

TheMarkChristie wrote: »

So they finally got back to me today to say that they agree they have no signed document so have no legal standing to recall the loan through the courts,

May be relevant

https://consumercreditlitigationanddebtcollection.wordpress.com/2014/10/31/grace-v-blackhorse-court-of-appeal-ruling-my-view-as-the-fee-earner-responsible-for-the-case/

Different circumstances, but in so much as if the lender agrees that the debt is irredeemably unenforceable against you via the courts, then the same general principle on the fairness and accuracy of recording a straight unqualified default could well apply.

pt2537

as ive just said on twitter, the banks negligence should not lead to the consumer being punished. Under the DPA 1998 data must be processed fairly and also must be accurate and where necessary kept up to date. Whatever our opinions on the circumstances are, this is what the Law says on the subject.

Applying the law to the facts of this case it seems data isnt being processed fairly, and it also seems to me on the face of it that the data isnt accurate as the true events arent being recorded (see Grace v Blackhorse)

Irrespective of whether there has been money used which wasnt the OPs, and in my view that is something for the OP to resolve with the bank, none the less the consumer should not suffer 6 years of damage due to the banks negligence.

pt2537

TheMarkChristie wrote: »

Thanks for all the info#

Maybe if I word it differently

Can the bank register a default against me for a loan that I have not signed? There is no credit agreement so no legal standing for a default?

youre asking the wrong question in my view.

pt2537

shortcrust wrote: »

Oh super! Another "I spent loads of money that wasn't mine. Silly me! Now they want it back and, shockingly, there are consequences to spending loads of money that wasn't mine. Life is so unfair!" thread.

:mad:

or perhaps its a " im suffering 6 years of damage to my credit file after my banks negligence in paying someone elses funds into my account and then registering a default against me wrongly contrary to the Data Protection Act 1998" thread...........

bengal-stripe

TheMarkChristie wrote: »

So they finally got back to me today to say that they agree they have no signed document so have no legal standing to recall the loan through the courts, but they will continue to try and get it back themselves.

The "loan" might not be enforceable through the courts, but surely the erroneous payment will be. Whether or not the OP did notice the overpayment, the money was never his or ever will be.

So let the court decide on a fair repayment!

pt2537

harryfrombarry wrote: »

PAY THE BANK THE MONEY YOU OWE THEM.

That's my advice.

OTHERWISE YOU ARE A THIEF.

Thief? do you even understand what is required for the offence of theft?

Dishonest appropriation of property belonging to another with the intention of permanently depriving ownership

To sustain such an allegation, you need to show dishonesty, see R v Ghosh 1982 which defines such, therefore you fall at the first hurdle with calling this person a thief as you would never get over the hurdle of proving his act was dishonest in circumstances where the act of the bank paying money into his account was negligent. As for appropriation i doubt you could go so far as to show that too.

Dont forget the bank has a duty of care to its customers, its duty extends to ensuring that the right funds are paid to the right accounts etc.

alchemist.1

pt2537 wrote: »

Thief? do you even understand what is required for the offence of theft?

Dishonest appropriation of property belonging to another with the intention of permanently depriving ownership

To sustain such an allegation, you need to show dishonesty, see R v Ghosh 1982 which defines such, therefore you fall at the first hurdle with calling this person a thief as you would never get over the hurdle of proving his act was dishonest in circumstances where the act of the bank paying money into his account was negligent. As for appropriation i doubt you could go so far as to show that too.

Dont forget the bank has a duty of care to its customers, its duty extends to ensuring that the right funds are paid to the right accounts etc.

Here are some parts of the theft act for you:

A person is guilty of an offence if - (a) a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest; (b) he knows or believes that the credit is wrongful; and (c) he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled."


I am not sure how not noticing 1000 extra in his bank balance would go down. I dont his excuse of other payments going out and banking another cheque would hold up

matty538

pt2537 wrote: »

or perhaps its a " im suffering 6 years of damage to my credit file after my banks negligence in paying someone elses funds into my account and then registering a default against me wrongly contrary to the Data Protection Act 1998" thread...........

Or perhaps its "I have an unauthorised overdraft because the bank paid me an extra £1000 which I gladly spent" At the end of the day the bank messed up but so did the OP. They spent money which wasnt theirs to spend, now they need to repay it. Whichever way you look at it the OP should have it marked on their credit file and stop trying to worm out of what they owe.
To the OP you have a default for a loan or tell them you never agreed and have an unauthorized overdraft for x amount of months. To me neither is ideal.