Default Applied Date

phenson

Hello All, Newbie here looking for advice...

I have an old outstanding loan that was taken out in 2016 with Ratesetter, during 2017 i hit financial difficulty and was unable to continue making payments, My last full payment was made Dec 16...
After little communication I received a default notice from Ratesetter in July 2020, and then notification that the debt was being passed to ARC Europe, at this point i was in touch with ARC and agreed a repayment amount against the remaining debt.
I have recently found out that since making payments to ARC, "missed payments" have started to be recorded on my credit file against the Ratesetter loan, this is after a time since 2017 to now with "no data" being reported......also at this time i noticed that the account was not in fact recorded with credit agencies that it was in default.

I have recently been in touch with Ratesetter who have acknowledged the missed payment records will be revised, however they also stated that the default will be recorded...i questioned this firstly to see if we could agree a more favourable repayment plan to prevent this and also what date the default will be recorded, they are not interested in an agreement and have advised the default will be dated as of July 2020 (this being the date i originally received the notification).

i have since done some research that suggests that the guidelines for debts to have a default applied is between 3-6 months of missed payments....im my case this would/should have been a date of around May 2017 following 6 missed payments.
I have challenged this with Ratesetter and they have failed to agree to this and are going ahead with the July 2020 date for the default.
Can anyone help me out as to this is correct practice or should the default be back dated to when the infringement occurred and not 3 years later?
i have read of cases where defaults have been back dated, and of course in my scenario will be of great benefit as the time left for it to be on my credit file will be significantly shortened.

Thanks for any help in advance! 

[Deleted User]

3-6 months is guidelines, not law but I agree the default should not be in 2020 if you stopped paying in 2016, doing that keeps it on your file to 2026 rather than 2022 which means they can affect your rating for years longer. The default does, however, have to be recorded to show an accurate record of your history. Submit a complaint along with the guidelines and see what happens.

zzyzx1221

From the sounds of it, you have some sort of payment arrangement with them?

phenson

zzyzx1221 said:

From the sounds of it, you have some sort of payment arrangement with them?

I have a repayment in place via ARC Europe who have been assigned to collect the debt, this was put in place circa Aug 2020.
My issue is that i feel the default should have been registered back when the missed payment infringements began in 2016/17.
 

adamp87

I think even with payment arrangements you end up penalised as a lot of lenders worn default until months into an arrangement or until an arrangement stops.

Whereas someone who didn’t make any effort to repay would most likely be defaulted much sooner and have they benefit in a sense.

I’d lodge a formal complaint stating the guidance with Ratesetter and if you are unhappy with the response raise it with the ombudsman afterwards.

But be clear with your history to make sense, I got into trouble on X day, and paid xx amount for X months.. I believe it should have defaulted on X date as per the guidance.

phenson

adamp87 said:

I think even with payment arrangements you end up penalised as a lot of lenders worn default until months into an arrangement or until an arrangement stops.

Whereas someone who didn’t make any effort to repay would most likely be defaulted much sooner and have they benefit in a sense.

I’d lodge a formal complaint stating the guidance with Ratesetter and if you are unhappy with the response raise it with the ombudsman afterwards.

But be clear with your history to make sense, I got into trouble on X day, and paid xx amount for X months.. I believe it should have defaulted on X date as per the guidance.

Thanks for the response and advice, would you suggest email is ok or would a more formal approach sending a letter be better?

zzyzx1221

phenson said:

zzyzx1221 said:

From the sounds of it, you have some sort of payment arrangement with them?

I have a repayment in place via ARC Europe who have been assigned to collect the debt, this was put in place circa Aug 2020.
My issue is that i feel the default should have been registered back when the missed payment infringements began in 2016/17.
 

So you've paid nothing for 3 years until it was passed to a DCA?

phenson

since my recent repayments began (around 6 months ago) i hadnt made a payment since 2016/17....basically a period of 3 years passed without any chasing of the debt and well i ignored it concentrating on other debts.

zzyzx1221

phenson said:

since my recent repayments began (around 6 months ago) i hadnt made a payment since 2016/17....basically a period of 3 years passed without any chasing of the debt and well i ignored it concentrating on other debts.

That's very strange. Strange that they didn't do anything (default/take legal action/sell it to a DCA) for 3 years.

You'll just have to raise an official complaint to get them to amend the default date if their front line customer service won't play ball.

Lookingforwards2026

I know this is a really old thread, just wondering if you got anywhere with this, as im also chasing rate setter to back date a default. 

Smith2001uk

i had this issue with virgin CC. they defaulted me 1 year later instead of 3-6 month guideline. Their explanation was that as i was continuing to pay smaller amounts via a DMP, it took longer to get to the figure they decided I was in default. After a complaint i was given this in a final letter. unfortunately i filled it away and just missed the 6 month deadline to goto the ombudsmen by 3 days. get a deadlock letter then go to the ombudsmen is my advice.