Halifax, Lloyds, BOS account credit and DRO

gspec312

Good afternoon, I’m unsure where to post this and I’ve searched and searched the forums with no avail.

This weekend, I have received 4 letters from Lloyd’s, Halifax and BOS relating to accounts that were subject to a Debt Releif Order (DRO), and all accounts were removed from Credit files in Jan this year.

“The basis of the letters are refunds from the banks for the following; We have recently undertaken a review of our internal collections processes and have found that between 11 January 2012 and 18 February 2013, following assessment of your financial circumstances, we did not always take the appropriate course of action when dealing with your account. We are refunding all interest, charges and fees on your account during this time.”

Now the letters all state that they are applying the credit to the accounts and that no balance is due to me as the adjustment still leaves the accounts with an outstanding balance.

Now my question is, how do I approach this, just take it on the chin or chase the refund? Officially all accounts were subject to DRO so therefore from what I’ve read from other PPI claims the money can not be used to offset the debts? Secondly, the accounts have officially closed as of Jan this year, they are no longer showing on credit file ( I know this as they cleared before my mortgage application), therefore should I be requesting this money is paid directly to me?

Thankyou for any help,

sourcrates

Hi,


You are no longer subject to the terms of the DRO, so when it ended, so did your liability, so no worries on that score.


You can ask them to make the payments directly to you, but they are not obliged to do so.

gspec312

Thanks, that was my assumption, however upon reading the letters it appears that they mismanaged the 12 month period during which the DRO was active, I believe this was from them not updating their records, my account or credit file, so therefore continued to chase debt and apply further charges etc during the 12 month period that the DRO was active. Where would I stand with this, still politely request the monies are paid to me directly?

National_Debtline

Hi Gspec312,


The key issue here is how much is the potential refund for? At the time you had a DRO the asset limit was £300, so if the refunds are for less than £300 in total, then you could write and complain to the banks asking for the money to be paid directly to you. You could argue it shouldn't be offset against the debt as that debt no longer exists.

However, there could be a potential issue if the refunds are for more than £300. If that is the case, you can still ask for the money to be paid to you directly, but you would also be obligated to report the refund to the Insolvency Service (as it relates to a period where you were in the moratorium of your DRO). If you fail to report it then the creditor can report it themselves and there is a risk, that your DRO could be revoked. This is not an instantaneous process and you would be able to put your side of things across, but please be aware of this risk.


If the refunds are for more than £300 but you do not ask for the payment to be paid directly to you, then the DRO would not be affected.


Laura
@natdebtline

sourcrates

National_Debtline wrote: »

Hi Gspec312,


The key issue here is how much is the potential refund for? At the time you had a DRO the asset limit was £300, so if the refunds are for less than £300 in total, then you could write and complain to the banks asking for the money to be paid directly to you. You could argue it shouldn't be offset against the debt as that debt no longer exists.

However, there could be a potential issue if the refunds are for more than £300. If that is the case, you can still ask for the money to be paid to you directly, but you would also be obligated to report the refund to the Insolvency Service (as it relates to a period where you were in the moratorium of your DRO). If you fail to report it then the creditor can report it themselves and there is a risk, that your DRO could be revoked. This is not an instantaneous process and you would be able to put your side of things across, but please be aware of this risk.


If the refunds are for more than £300 but you do not ask for the payment to be paid directly to you, then the DRO would not be affected.


Laura
@natdebtline

Was not aware the asset limit could be enforced retrospectively.


You learn something everyday.

gspec312

National_Debtline wrote: »

Hi Gspec312,


The key issue here is how much is the potential refund for? At the time you had a DRO the asset limit was £300, so if the refunds are for less than £300 in total, then you could write and complain to the banks asking for the money to be paid directly to you. You could argue it shouldn't be offset against the debt as that debt no longer exists.

However, there could be a potential issue if the refunds are for more than £300. If that is the case, you can still ask for the money to be paid to you directly, but you would also be obligated to report the refund to the Insolvency Service (as it relates to a period where you were in the moratorium of your DRO). If you fail to report it then the creditor can report it themselves and there is a risk, that your DRO could be revoked. This is not an instantaneous process and you would be able to put your side of things across, but please be aware of this risk.


If the refunds are for more than £300 but you do not ask for the payment to be paid directly to you, then the DRO would not be affected.


Laura
@natdebtline

Is this possible, given that the 12 month period ended in January 2013 and the 6 years since original DRO was put in place was January 2018. Surely all debts are now statute barred anyway?

gspec312

All,

Have telephoned to query the letters this lunchtime. It appears as though the banks have applied charges and interest during the DRO moratorium period, a contravention of the Insolvency act. According to them I have not paid these charges or interest fees as they were not pursuing the debt in the 12 months moratorium period, so they merely increased the size of the debt in those 12 months, and have since now told me that it was a mistake and all those fees and charges would be removed from the debt if the debt was still active.

Where do I stand with all this, should I just take them as an information letter and file them away or should I be following this up?

National_Debtline

Hello again,


During the moratorium debts can continue to have interest and charges added to them however, when the DRO completes successfully the debts are written off, along with these extra interest/ charges.


There does not appear to be a physical refund of money due to you in light of your most recent message so it would seem this is a letter to just file away.


Laura
@natdebtline