No default notice

DaisedAndConfusled

Evening All.

Hoping someone can help.

Background

A couple of years ago I got an Evans credit card (Newday).

All was well until I split with my OH and went through some predictable financial upheaval.

Recognising I could no longer meet my obligations (having a couple of late payments/late payment letters) I contacted everyone I owed money to and arranged to either pay off the balances or set up a payment plan (via step change) with the explicit aim of not getting defaults.

Newday sold my debt (c.£500) onto robinson way (hoist?) and I have been paying it (and the others) off monthly like clockwork.

Due to be debt free by the end of the year.

Now

A couple of weeks ago I got a letter telling me Newday have registered a default against me and the letter was saying - although a systems error meant they didn't send me notice in advance, they felt the default was valid and to get in touch if it causes difficulties (fairly standard wording I think).

I get in touch to find out what's happening (given I'm about 2 months off being completely debt free (excluding student loans) and under the impression the agreed payment plan meant I wasn't defaulting (yes, I know underpaying).

Apparently they registered the default a year ago (before selling the debt) and are only telling me now due to this system error.

I ask the gentleman on the phone if (given they didn't tell me) it would be possible to remove the default and send me the notice (putting everything back where it was supposed to be), given before the notice expired I could pay off the balance and everyone would be happy.

He registered it at as a complaint for the team to look at and said I would receive a letter.

Letter said no.

I wasn't notified but defaults are to warn other financial organisations of my habits and they wouldn't remove it.

Offered £25 (balance is currently c£100) as compo and said I have 28 days to complain to the ombudsman.

Help please

I know I should be better at checking my credit file, but I checked it before making these arrangements, knew all my debts were covered by the agreement with step change, and was waiting until everything had been paid before reviewing it again. Lesson learnt.

But. What would you guys do now?

Options as I see them are:

• Follow up with them quoting the relevant acts
• Complain to ombudsman - and are there any templates
• Request copies of everything - they're admitting they didn't sent the notice but saying the statements they sent saying 'failure to pay may result in a default' mean I was well aware of the consequences of not paying
• Just accept the compo
• Something else

Thank you kindly in advance for your time and consideration.

Daisy.

cooltt

What acts?
Complain to ombudsman about what?

Having a tantrum over an admin error isn't going to change the facts, you defaulted on a debt, sorry but that's it. The default has been legally registered on your file.

DaisedAndConfusled

Thank you for reading.

The act would be the Consumer Credit Act and the code of practice

A company must issue a default notice giving a minimum of 14 days notice and opportunity to remedy the situation prior to registering a default.

I did default on the agreement (as in terms of repayment) but reached an agreement (which I have kept) with the company to repay.

I was under the impression (from the letters received stating may result in a default) they reserved the option to register a default but would not do so while I was complying with our agreed payment plan.

If they had sent a notice (as they are legally required to do) saying they would be registering the default within 14 days if I did not immediately clear the balance I would have cleared the balance.

I can prove this as it's what I did with another company in the same situation at the same time of year - I set up agreements with those that would agree and cleared those that wouldn't.

And I'm not having a tantrum - Not sure what gave you that opinion?

I'm just thinking the fact I have defaulted on the terms of the agreement does not mean the company can bypass the legal procedure for remedying it.

Meaning the default has not legally been registered on my file.

sourcrates

Hi,

The creditor can register a default against you at any time, once your relationship with them has broken down.
I suspect the reason they defaulted you last year, just prior to selling the debt on, was because they cannot legally sell on a debt that has not first defaulted.

However, creditors are also expected to treat you fairly, now usually you would expect to be defaulted after missing approx 3/4 contracted payments, so the default date should be within 3 months of you making your last contracted payment.
If they wont alter the default date, then you can escalate your complaint to the FOS, which is what i suggest you do.

You dont need a template letter, you can complain directly from there website :

http://www.financial-ombudsman.org.uk/consumer/complaints.htm

DaisedAndConfusled

sourcrates wrote: »

Hi,

The creditor can register a default against you at any time, once your relationship with them has broken down.
I suspect the reason they defaulted you last year, just prior to selling the debt on, was because they cannot legally sell on a debt that has not first defaulted.

However, creditors are also expected to treat you fairly, now usually you would expect to be defaulted after missing approx 3/4 contracted payments, so the default date should be within 3 months of you making your last contracted payment.
If they wont alter the default date, then you can escalate your complaint to the FOS, which is what i suggest you do.

You dont need a template letter, you can complain directly from there website :

Link removed because I'm a new user

Thank you.

In the grand scheme of things I'm going to be off my DMP in a couple of months, then I've got 6 years until the payment plan markers drop off my report.

I'm not too worried about the default being a couple of months early or late (I guess) as far as my record is concerned but I object somewhat to the idea I'm sticking to our (new) agreement and paying off every penny (not asking for partial settlement of anything) but they can ignore the legal framework they're supposed to comply with.

The question I was thinking more - Is it worth it?

From reading the consumer credit acts 1974 and 2006, if they fail to issue a proper default notice the company are not permitted to charge interest or fees (or take any actions like seek CCjs) for the period between the default being registered and me being notified.

And as an additional point - they still haven't actually issued me a default notice - I've got a letter from them saying they've registered the default and sold the debt, but from what I'm reading they can't have legally sold the debt without first issuing the default notice (in the prescribed form).

sourcrates

That is correct.

A debt cannot be sold without first defaulting.

DaisedAndConfusled

sourcrates wrote: »

That is correct.

A debt cannot be sold without first defaulting.

Without defaulting - which isn't being contested - or without issuing the default notice in the prescribed form as per the CCA?

sourcrates

DaisedAndConfusled wrote: »

Without defaulting - which isn't being contested - or without issuing the default notice in the prescribed form as per the CCA?

A default notice should be issued yes, prior to any sale.

If they have sold your account on without providing a default notice, then you would have cause for complaint.

S.87 (1) of the Consumer Credit Act 1974

S.87 Need for default notice

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum
.............................................................................................

So, in order to sell on the debt, the original agreement must first be terminated and a default notice issued.

DaisedAndConfusled

sourcrates wrote: »

A default notice should be issued yes, prior to any sale.

If they have sold your account on without providing a default notice, then you would have cause for complaint.

S.87 (1) of the Consumer Credit Act 1974

S.87 Need for default notice

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum
.............................................................................................

So, in order to sell on the debt, the original agreement must first be terminated and a default notice issued.

Thank you for your help.

I'm reading through the link you provided to the ombudsman and I'll see if I can draft something I'm happy with.

Still not entirely sure what my approach should be - Thinking it's not in my best interest to get the default removed, given this mean's it'll drop of a year earlier than if they defaulted me today.

I think it reasonable to ask the interest I've been paying be refunded/offset against the original amount - which should be enough to pay off the remainder.

Not sure if I should tell HOIST they bought the debt 'illegally'?

sourcrates

DaisedAndConfusled wrote: »

Thank you for your help.

I'm reading through the link you provided to the ombudsman and I'll see if I can draft something I'm happy with.

Still not entirely sure what my approach should be - Thinking it's not in my best interest to get the default removed, given this mean's it'll drop of a year earlier than if they defaulted me today.

I think it reasonable to ask the interest I've been paying be refunded/offset against the original amount - which should be enough to pay off the remainder.

Not sure if I should tell HOIST they bought the debt 'illegally'?

You should be able to reclaim any payments of interest during the period you mention, i would simply write and tell Hoist a dispute exists with the original creditor, and to back off till its settled.

Up to you how much detail you include, but i would keep my cards close to my chest for now.

ShivasPlace

sourcrates wrote: »

A default notice should be issued yes, prior to any sale.

If they have sold your account on without providing a default notice, then you would have cause for complaint.

S.87 (1) of the Consumer Credit Act 1974

S.87 Need for default notice

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum
.............................................................................................

So, in order to sell on the debt, the original agreement must first be terminated and a default notice issued.

This is interesting… does this apply to current accounts? I know of a situation where a current account with an overdraft was taken over by a debt management company 9 years ago. This account was sold to a certain Debt Collection agency who were paid via the DMP. The account just showed as delinquent, in 3 months arrears, never defaulted and is still open… although the balance has gone down via the payments made to the debt management company.

Since the account shows in arrears for 9 years, it will ruin credit 'scores' - so is there any recourse on this (either financially or by forcing the credit file to be updated to show a default in 2007 (and in effect gone from the credit file) when the debt was sold)?

(Sorry to hijack the thread!)