Payday loan - no default issued

sillymeme

Hi, I recently wrote to MyJar about a loan which has never been defaulted. They claim that they cannot issue a default as no notice of default was issued at the time. I was wondering if anyone could confirm if this is correct? (In which case ill move on).  

Bit of background - after a huge mess and failed DMPs in the past, I have now cleared ~£20k of debt, and have almost the same amount in savings. I had a large number of creditors and lost track of a few. I recently realised  I still had an outstanding debt with MyJar after reviewing my transunion credit report (it doesnt appear on the others) and will clear this. However, it is being marked as a missed payment every month rather than having defaulted. 

For a long time, I never really imagined id get out of debt, let alone save enough to consider a mortgage but not now hoping that I may be able to buy in a few years. My credit reports, as of now, have multiple defaults showing that will fall off in 2021/2022. The MyJar account should have defaulted in 2016, falling off next year. MyJar argue that the missed payment will have a lesser impact than a default. However, to me I think the impact is greater - instead of all deafults clearing in the next 18 months, the myjar account being settled now means I will have a payday loan (with missed payments) showing until 2026 (though impact should lessen over time).

The reply I recieved from MyJar is below, really just looking for advice on whether this is correct and they absolutely cannot default the account now, or whether its worth taking any further?

Thanks 

Reply from MyJar:

Your first payment was received 2 weeks late and therefore a Notice of Default should have been issued to you on this date. The default should have been applied to your credit file on 01/10/2016 when you missed another repayment in the above plan.

After reviewing our records we can confirm that due to a system error, a Notice of Default was never issued to you. Therefore we cannot accurately apply default to your credit file without a Notice of Default being issued first.

MYJAR accept that if the correct communications were issued to you, the loan should have defaulted on 01/10/2016. However, this would still mean that the default would remain present on your credit file until 01/10/2021. Instead we have marked your loan as being in arrears - a less significant marker compared to a default. Therefore the arrears marker has not worsened the credit status compared to if the default marker was applied.

Please be advised that your current outstanding balance on your loan is £216.41. Once the outstanding balance is repaid we will mark your loan as closed and update the credit reference agencies appropriately.

Our Decision

Following our investigation, it is our view that your complaint should be upheld. We are sincerely sorry that a Notice of Default was not issued to you in 2016. Unfortunately we are unable to apply a default to your credit file without a Notice of Default being issued first.

However please be assure that once the outstanding balance of £216.41 is repaid we will accurately update credit reference agencies that your loan is repaid and closed.

We are sincerely sorry for any stress or inconvenience caused by due matter. However please be assured that the arrears markers on your credit file are far less sever than if a default were to be applied to your credit file.

We hope the reasoning set out here resolves the complaint to your satisfaction. However, if you remain dissatisfied, you may refer your complaint to the Financial Ombudsman Service. You have the right to refer your complaint to the Financial Ombudsman Service, free of charge – but you must do so within six months of the date of this letter.

adamp87

They certainly can apply a default retroactively but don’t seem to want to - is MyJar the original creditor? You can complain to the ombudsman you’ve nothing to lose

sourcrates

There is no harm in taking this to the FOS, don`t expect a quick outcome though.

Theoretically what they say is correct, could they issue a default and backdate it to 2016 now ?

Quite possibly yes, will they ? they say not, but the Consumer Credit Act consists as a mixture of law, and guidence, defaults are covered under sec 87 CCA.

It dosen`t say they can`t do it, so in my opinion, its possible to do so.

See what the ombudsman has to say.

sillymeme

Great, thank you both, good to know its not just a clear no so will try the ombudsman. I have plenty of time anyway while waiting on other defaults to also drop off.

lorpor

Hi. Sorry to jump on an old thread, but I’m having the same problem and can’t find any answers. Did you get anywhere with this? I took a payday loan in 2013 and they haven’t issued a default but they’re marking a late payment every month on my credit file. 

nomorecc

I too am having this issue... with hitachi

sourcrates

This is an old thread, and the OP has not been active for 3 years, so if you have specific questions about your own circumstances, please start a new thread.