Rules for reporting missed payments

Larry123

I pay my mortgage 4 months at a time as I only get paid 3 times per year. I made my last payment 4 months ago and had it in my head that the next payment was due by the 28th of September. It would appear it was actually due on the 28th of August and when I called today to make a payment, they informed me I had an arrears on the account which has been reported to the credit agencies.

I have had a lot of payment problems in the past but have really cleaned up my act in the last 2 years and currently sporting a "23 months since last payment problem" on my file. I fear this 1 week late payment of ~£250 will ruin this but Accord insist they are legally obliged to report it.

Does anyone know the exact rules they must stick to, or where to find this information? I can't seem to find what I'm looking for. I need to know if they are obliged after a certain amount of time or arreas. Its just very annoying that I forgot for a few days, even though I pay 4 months at a time and I have just made a payment for another 4 months.

Thanks in advance.

Westminster

Here is what I found in this BBA document: Titled Principles for the reporting of arrears, arrangements and defaults at Credit Reference Agencies

2. Should a payment not be made as expected, information to
reflect this will be recorded on your credit file
If you do not make your regular expected payment by the agreed time and/or for the agreed amount according to your terms and conditions, the account may be reported to the CRAs as being in arrears.
If this continues over time, the level of reported arrears will increase, which may result in the lender taking some form of action. This could include notification of their intention to report the account as “defaulted” (see Principle 4 below).

Calculating and reporting arrears
In general, the reporting of arrears is designed to indicate that the expected payment, whether a fixed sum (as in the case of many products) or required minimum (in the case of credit and store cards), has not been paid according to the terms and by the due date.

The purpose of reporting arrears is to indicate at the earliest reasonable opportunity that a customer is showing signs of potential financial difficulty.
Arrears are reported as missed payments through status codes such as 1, 2 etc which are based on the number of months missed.
Generally by the time the account is 3 months in arrears, the lender may be taking further action such as reporting the account as defaulted (see Principle 4 below). Missed payments may continue to rise and be reported up to a maximum of 6. On some products this may continue to show as 6 until the lender takes action and reports the account as being in default.

CRA information is supposed to be factually correct. And from the information you gave, you did miss your contractual payment so the lender has reported the missed payment as per the BBA guidance. I would expect the ICO and FOS to agree.

Your best bet is to try sending a very nicely worded letter to your mortgage company asking them to exercise some discretion in removing this marker as a one-off gesture of goodwill.

DCFC79

How do you know when it's due ? Do you write it somewhere or memorise it.

If not currently doing it is write it on a calendar or somewhere else.

CLAPTON

Larry123 wrote: »

I pay my mortgage 4 months at a time as I only get paid 3 times per year. I made my last payment 4 months ago and had it in my head that the next payment was due by the 28th of September. It would appear it was actually due on the 28th of August and when I called today to make a payment, they informed me I had an arrears on the account which has been reported to the credit agencies.

I have had a lot of payment problems in the past but have really cleaned up my act in the last 2 years and currently sporting a "23 months since last payment problem" on my file. I fear this 1 week late payment of ~£250 will ruin this but Accord insist they are legally obliged to report it.

Does anyone know the exact rules they must stick to, or where to find this information? I can't seem to find what I'm looking for. I need to know if they are obliged after a certain amount of time or arreas. Its just very annoying that I forgot for a few days, even though I pay 4 months at a time and I have just made a payment for another 4 months.

Thanks in advance.

seems a very odd arrangement and liable for error

why not simply pay monthly by DD or standing order?
the fact you get paid 3 times a year surely has nothing to do with the payments

mp3duck

CLAPTON wrote: »

seems a very odd arrangement and liable for error

why not simply pay monthly by DD or standing order?
the fact you get paid 3 times a year surely has nothing to do with the payments

this.. Why not just create another bank account purely for the mortgage payments? Pay in the 3 (or what ever) times a year to topup, buy pay mortgage company monthly by DD...

I'm not able to offer any advise on the rules of reporting however, sorry,

Westminster

How do you know when it's due ? Do you write it somewhere or memorise it.

If not currently doing it is write it on a calendar or somewhere else.

This is called good financial management and is the main reason people tend to stick with Direct Debits as that is backed by a guarantee or by Standing Order which takes the guess work out.

That this late payment has been recorded is a factual representation that the OP is not 100% on top of their financial arrangements which is highly useful information for any other lenders as it dictates the relative risk of the same (or worse) happening again.

Larry123

Thanks.

I used to have a quarterly standing order set up however the mortgage company stopped accepting these and DD or over the phone was the only way to pay. I had the 28th of September written down as I am sure this is what I was told. Accord are going to review the last phone call I had with them to verify what I have been told, and of course I have requested copies of the phone call recordings. Prior to the last couple of months, this arrangement was the only way I could manage my finances. I was in severe debt and my health was severely suffering because of it. It was easier at the time to pay off 4 months and not have to worry while getting the rest of my affairs in order. My financial status was (possibly still is (on paper)) so bad that I could not even open a second account to help manage my money, and I tried several different banks.. Never-the-less, the arrangement was it was and I may now consider going back to monthly DD after the next 4 month period is over.

If I find that I was misinformed about when the next payment was due the last time I spoke to them, then I am sure it will be no problem getting the mark removed. If not and it was my mistake, then I will have to deal with the consequences. Its just annoying that I am being penalised so heavily for a payment only 3 working days late.

Thrugelmir

Larry123 wrote: »

I have had a lot of payment problems in the past

Even more reason to mark your account. Habitual late payers will receive less leeway.

Larry123

Thrugelmir wrote: »

Even more reason to mark your account. Habitual late payers will receive less leeway.

Thanks for the advice.

Thrugelmir

Larry123 wrote: »

Thanks for the advice.

Not advice. Its how business works. Despite lenders being in competition no one wants a potentially problem account. Enough good business out there. So really it's a fact of life.