Default Notice vs Formal Demand Notice

omoabeokuta

I wonder if anybody could advise me here.

I am trying to challenge a default being registered against my name and have recently retrieved all letters sent to me by my the bank through a subject access request.

The background to this is a default was registered against my name for a student overdraft about 6 months after I finished university and was broke as broke could be. Couldn't afford to make payments into there as I was covering with bills at home due to sudden change in my mothers circumstances. I stupidly ignored the letters sent by the bank about my overdraft until my mum got a hold of them and told me to respond. I explained the situation to them and agreed a payment plan (its all paid off now). Despite this, a default was still registered against my credit file.

Since then I have gotten a decent job and have been very good with my credit and building it up but this default is still preventing me from doing anything that requires credit.

I recently did some research on how to get it removed and read somewhere that financial companies are required to serve a formal default notice before registering it against your credit file. I have got information of all letters sent to me through a subject access request and can only see a letter entitled 'Formal Demand Notice' and not a formal default notice. The formal demand notice gave me a period of 7 days to respond whereas I have read that I was suppsoed to have been given 14 days. Additionally, subsequent letters (particularly one entitled 'Final Demand') also refer to a default notice worded as: 'We recently issued a default notice on the above account' - however there is no default notice letter I have been sent which is evident from my subject access request.

I want to challenge the bank and demand the default be removed from my credit file as they have not followed statutory procedure. Do I have a leg to stand on and a chance at succeeding at this?

Many thanks

Ade

Arleen

You won't be getting out on some "technicality", it's not the movies. Good that you've finally owned your debts and paid them, but you will have to wait for it to drop off like everyone else. To explain a bit - the moment you've agreed with them on an alternate payment plan, you have defaulted on the original one - hence that was noted in your file as a default.

KoshB5

Adding to what Arleen has stated, you should read this:

https://ico.org.uk/for-the-public/credit/

In particular -

The bank didn’t send me a default notice under the Consumer Credit Act 2006; can they still list a default on my credit file?

In most cases, the answer is likely to be yes, provided that the default recorded is an accurate reflection of events and that when you opened the account you were told (probably in the terms and conditions of the credit agreement) that this may happen. It is unlikely that recording the default, even if you don’t recall receiving a default notice, would breach the DPA.

A ’default‘ on your credit file simply means that the lender considers that the relationship between you has broken down. Therefore, while it may be a requirement of the Consumer Credit Act to issue a default notice, there is no DPA obligation on a lender to issue a default notice to individuals before marking an account as being in default on their credit file.

Further information on filing defaults with the CRAs can be found in the Principles for the reporting of arrears, arrangements and defaults at credit reference agencies. The principles in this document have been drawn up by the credit industry in collaboration with the ICO.

StopIt

As above really.


The lack of a default notice does not mean the default isn't correct and the corrective action is not to remove it, but send you a backdated default notice.


You had a debt, you buried your head in the sand and they defaulted you*. All correct and the fact that you eventually paid it does not change this. It's harsh, but true and will be reflected in your credit history.


*Technically you defaulted, they just noted this in your credit files. A default is defined as a breakdown in a credit agreement. A default notice is just them telling you something you already should know, that you should have paid them, but have failed to do so.


Edit: The above mentions the Consumer Credit Act. Overdrafts are not covered by this act and thus the requirement to even send you a default notice is purely voluntary. If the T&Cs of the overdraft cover how they handle default, they'll be covered.


Edit Edit: Even IF you contested this you will still have this noted in your credit files. Instead of a default you'll have up to 6 months of arrears noted, proceeded by AR markers for the duration that you paid the overdraft off. AR markers stay for 6 years AFTER you finish paying the debt, rather than 6 years post-default date AND they're basically seen by some lenders as near on-par with default anyway, so you will not be repairing your credit files by following through with this.

[Deleted User]

omoabeokuta wrote: »

Since then I have gotten a decent job

Personally, I think the default is justified purely for using the word 'gotten'.

omoabeokuta

Deleted_User wrote: »

Personally, I think the default is justified purely for using the word 'gotten'.

There's always a class clown.


Thanks for your help everyone else, lesson learned on this side.

[Deleted User]

omoabeokuta wrote: »

There's always a class clown.

You sure gotten that right.

sourcrates

Just to add, the lack of a default notice can easily be remedied by them sending you a new one, so it is really a dead end trying to get it removed on those grounds.