Son has Vodafone default - believe unfairly?

GentleGiant01

Good afternoon all, 
Sorry but I’m a bit on a limb with this one and hope someone can please help. 

My wife and I gave my son and his new husband a lump sum about 6 months ago to help them purchase a new home. They will be taking out a mortgage. 

Unfortunately; it appears when looking at his credit report that Vodafone have given him a default in early 2018! On speaking to him (he’s always been very good with money!) he used to have a contract with Vodafone. He ordered a tablet from them which never got delivered, and he proved to them, at the time that this was never delivered but they were adamant it was and kept billing him for it, so he simply didn’t pay. 

Unfortunately he cannot remember if this included his mobile phone contract or not. The default is for almost £2000!!!! 

I know there are lenders who will accept them with this as it’s a communications default so the mortgage I’m not worried about, but I am worried about the following: 

They reported 11 missed payments prior to the actual default date. As we are in Scotland, if they defaulted this after 3 or 4 payments, it would have become statute barred now and although it would stay there I wouldn’t worry about him getting debt collectors at the door. Is this an unfair amount of missed payments before default? 

if he contacts Vodafone, to ask them to prove that he owes the debt, will this “reset the clock” because it’s not technically statute barred? 

He has moved address since the default was registered, but has been at his new address 2 years, if we send a prove it letter, and they do in fact prove it will we be more likely to get court action? 

I’m able to cover the debt, and I would like too however he is obviously angry that he believes this was added unfairly so is refusing to let me pay it. 

It would be good if someone can provide some words of wisdom please! 

mcpitman

Hi, not sure what the legal differences are in Scotland. (I thought Statute Barred was 6 years in the UK).

It sounds like your son signed a contract and Vodafone have expected that contract to be honoured.

Sadly, just stopping paying these things and hoping they go away is not the best tact, keeping on at them about the missing tablet and lack of service etc and it is possible end a phone/tablet contract early without penalty.

There will be differing opinions on what to do in your circumstance, if it doesn't affect mortgage etc, i'd let it run until it is statute barred.

I don't believe "prove it" directly acknowledges the debt, you are not acknowledging the debt is yours, your are asking them to prove you owe it.

sourcrates

The guidance covering defaults is contained within the FCA handbook.

It is recommended a default be issued after between 3/6 missed payments.

However, these are not hard and fast rules, only guidelines, so creditors can use discretion as to when a default is applied.

Now 11 missed payments does, to me, seem excessive, and perhaps the default should have been applied a few months earlier, the prescription period in Scotland is 5 years, so if you go making a complaint to them now, that would be construed as acknowledgement, and would re-set the time clock.

Sending a provit letter would not re-set the clock, as it is specifically worded so as to avoid that.

Legal action is usually taken by debt purchasing companies, not original creditors, and only if they have been ignored for some time, it appears this debt is still with Vodafone.

Paying the debt does not remove the default, as things stand it will drop off his file in early 2024.

GentleGiant01

Thanks all, 

I have spoken to my son and I have told him to put a Mail redirect service on his old address so if they do try anything funny in the coming months he will be warned and I will happily pay if for him should it go to court. If not, we we will let it slip. 

Many mortgage lenders we have considered don’t take into account communication defaults, so even if he declares it he should be absolutely fine. 

Good to know about the legal action - it is showing as vodaphone on his report so that gives me more confidence it’ll just slide off after a while. 

A good lesson for him to not bury his head in the sand! I’ve checked over all his reports and this is the only problem I can see 

simon_or

GentleGiant01 said:

Many mortgage lenders we have considered don’t take into account communication defaults, so even if he declares it he should be absolutely fine.

I'm curious, what lenders are these that will ignore a 2k default?

I'm not proud of it but I've had my share of (very) adverse credit history in the past (in a much better place now) and unfortunately have had all sorts of struggles to get mortgages.

Usually the lenders that will ignore communications and utility defaults have a cap on the amount which is usually 150-500, never seen anything as high as 2k.

GentleGiant01

simon_or said:

GentleGiant01 said:

Many mortgage lenders we have considered don’t take into account communication defaults, so even if he declares it he should be absolutely fine.

I'm curious, what lenders are these that will ignore a 2k default?

I'm not proud of it but I've had my share of (very) adverse credit history in the past (in a much better place now) and unfortunately have had all sorts of struggles to get mortgages.

Usually the lenders that will ignore communications and utility defaults have a cap on the amount which is usually 150-500, never seen anything as high as 2k.

Hmm, I didn’t register this fact and you’re right - thank you! 

Because it’s early 2018 (so over 3 years) there are still lenders who will take this, potentially on the high street. I’ll have a hunt later on as I know some lenders won’t lend in Scotland.

cymruchris

GentleGiant01 said:

He ordered a tablet from them which never got delivered, and he proved to them, at the time that this was never delivered but they were adamant it was and kept billing him for it, so he simply didn’t pay. 

How did he prove it wasn't delivered, and why wouldn't they accept that?

How long until they need to apply for the actual mortgage?

If the above proof still exists - then I'd be wanting to take legal action to have the default removed from the records, so that they can have a clean mortgage application. They may get a mortgage with a default in place, but it's likely going to be a higher APR - so it'll hit them in the pocket over time because of something that wasn't their fault. Better to get this sorted sooner rather than later, so they can get the best mortgage deal. 

GentleGiant01

cymruchris said:

GentleGiant01 said:

He ordered a tablet from them which never got delivered, and he proved to them, at the time that this was never delivered but they were adamant it was and kept billing him for it, so he simply didn’t pay. 

How did he prove it wasn't delivered, and why wouldn't they accept that?

How long until they need to apply for the actual mortgage?

If the above proof still exists - then I'd be wanting to take legal action to have the default removed from the records, so that they can have a clean mortgage application. They may get a mortgage with a default in place, but it's likely going to be a higher APR - so it'll hit them in the pocket over time because of something that wasn't their fault. Better to get this sorted sooner rather than later, so they can get the best mortgage deal. 

The tracking system that the company (a local one) used, showed it was attempted delivery - no note through door, went back to the warehouse. My son at the time could not hope to get there during opening hours so spoke to them to get it redirected to his work address. The manager phoned him up and got abusive (really bizarre, I do remember this he was really upset about it) and when my son snapped back they then refused to deliver the parcel and sent it back to sender. This was shown on the tracker at the time, but I wouldn’t even begin to know how to get that information again. I will ask my son who is far more tech savvy than I but I suspect it’s a lost cause? 

He fought Vodaphone for a few months on it who refused to accept that this happened(?) 

the problem as others have highlighted is that I believe he had a mobile with them at the time that he stopped paying too, so that’s really on him and even if we got the tablet default removed, he would still have to suck up the mobile default I believe. 

I always thought I did the best by my children; teaching them the value of money from a young age and teaching them how credit, savings and investment works so this has really made me feel like I’ve failed as a parent! When he lived at home I charged him rent at 30% of his wage and saved it up for him and this forms some of the cash I have given back to him. 

They are actively looking at the moment but I should imagine it’ll be a few months before they find and have an offer accepted. With interest rates on the rise I do think it’ll be a case of bite the bullet if they find something now even at higher rates. They are being sensible and only going 2.5x their wage for a mortgage so I guess not all my lessons fell on deaf ears! 

cymruchris

If he stopped paying for a service he had used alongside the missing tablet, then I agree things will be more difficult. If it was purely the tablet there might have been some comeback - but as he dug his heels in and just stopped paying for everything - and not following a legal process to challenge, they really don’t have much chance now of resolving the issue this far on. Better to focus on obtaining the mortgage with the default in place, and hoping the rates aren’t too extortionate. 

It’s easy in hindsight to say you should have done this or that - but it’s an accurate record of what happened albeit not acknowledging the non-receipt of the tablet - and so aim for something like a two year fix on a sub-prime lender - and then after two years of solid payments and the default going further into the past there’s a better chance of going mainstream at that point (although I’m talking from what I’ve read through these boards and am not a mortgage advisor). 

They need to be squeaky clean from
this point forwards - and if there’s any dispute on any account - they have to follow due process rather than hide their head in the sand and stop paying. I know they know this now - and you’ll no doubt have emphasised it - but really be clear that to save money / get a better deal - the credit history has to be as good as it can possibly be. If you remember come back and let us know how they get on once they’ve got a deal in place. 

GentleGiant01

cymruchris said:

If he stopped paying for a service he had used alongside the missing tablet, then I agree things will be more difficult. If it was purely the tablet there might have been some comeback - but as he dug his heels in and just stopped paying for everything - and not following a legal process to challenge, they really don’t have much chance now of resolving the issue this far on. Better to focus on obtaining the mortgage with the default in place, and hoping the rates aren’t too extortionate. 

It’s easy in hindsight to say you should have done this or that - but it’s an accurate record of what happened albeit not acknowledging the non-receipt of the tablet - and so aim for something like a two year fix on a sub-prime lender - and then after two years of solid payments and the default going further into the past there’s a better chance of going mainstream at that point (although I’m talking from what I’ve read through these boards and am not a mortgage advisor). 

They need to be squeaky clean from
this point forwards - and if there’s any dispute on any account - they have to follow due process rather than hide their head in the sand and stop paying. I know they know this now - and you’ll no doubt have emphasised it - but really be clear that to save money / get a better deal - the credit history has to be as good as it can possibly be. If you remember come back and let us know how they get on once they’ve got a deal in place. 

Thanks, although not a credited mortgage broker I have a lot of experience in mortgages and "how to". Cheeky, probably, but I tend to do everything (that I can) myself, although you can get better deals by using brokers and if it's a complex case like my Son will be, it's best to use a broker.

Looking at it, Coventry Building Society will probably be his best bet but I will need to consult a broker because son is a FTB and their criteria on defaults is slightly different.

It's bizarre that he has an Amex card with 15k limit (around £100 balance showing on report, but it's paid in full every month) and a santander credit card, Amex obtained before default and santander after which I do find odd...I got rejected from Santander with a squeeky clean credit report...for a bank account!