Double Default

douglasjtbell

Hi,

I defaulted on a debt with Hitachi Capital on the 5th of December 2012. Another company, Cabot has then placed another default on the same date with the same amount.

My thinking is that Cabot bought the debt from Hitachi Capital.

Surely this default should only appear once? and if so which company is in the wrong? I have never made a payment to Cabot.

Thanks for any help.

fermi

https://forums.moneysavingexpert.com/discussion/3172602

CRA Defaults - Recording of defaults relating to debts that have been sold.

The practice of selling/buying debts is widely used. As long as the information is correctly recorded on a credit file by the lender selling the debt and the lender buying the debt, then two entries relating to one account would not be considered to be a breach of the Data Protection Act provided that:-

• both recorded entries are shown as being in relation to the same account/debt;
• the original debt entry should be shown on the credit file as being either ‘settled' or ‘zero' balance and should show that the debt has been ‘re-assigned’;
• the new DC who shows the debt in their name should maintain the original default date and the correct balances;
• the retention period for maintaining the information on a credit file should be based on the original default date regardless of who is responsible for the entry/debt.

douglasjtbell

Just noticed that the amount is £1 out, the original and the bought debt are both showing as defaulted.

Thanks for replying.

fermi

Both would remain a default, but is just how the original is marked in addition to the default which should show it's the same debt as the DCA default entry,

douglasjtbell

I'll take it up with hitachi since their default should be marked as settled or zero. Thanks.

daniel86_2

The debt from hitachi should show as balance Zero and settled and include a note that debt has been assigned or sold. This is OK as long as it is not done in a way that would keep the debt on your file longer or makes it seem as though the debts are separate.

fermi

'Balance' should be zero and/or settled/satisfied, depending on how the CRA in question shows this.

'Default balance' which is the balance at the time the account was defaulted should stay as the same on both and is never zeroed.

Don't get the two mixed up, as they are not the same thing.