Default notice issue

JH1345

Hi All

I’m hoping for some advice with a default issue I have with PayPal Credit and Lowell.

I fell into financial trouble in 2021 and PayPal credit was one of the providers I wasn’t able to keep up repayments with.

To my knowledge, they never issued me with a default notice but they referred me to Lowell to collect token repayments on their behalf which I was doing and I had been doing this since 2022. During October 2023, PayPal then sold the debt to Lowell who confirmed this and that the repayment plan would remain.

Paypal has closed the account on my credit file in 2022 but when the debt was sold to Lowell in 2023 they asked the CRAs to change the account from “closed” to “defaulted” and now my credit file has the default from January 2024.

I contacted Lowell to discuss this as 1) the default date would be incorrect and 2) I never received a default notice from PayPal.

Lowell investigated this and said a default notice was issued from PayPal, they couldn’t send it via email due to the size of the file and that they would send it to me in the post. I’ve still not received the default notice that PayPal issued (which is a separate issue). Lowell then said they had to reissue the default notice as there was an issue with the dates on the original default notice and that Paypal couldn’t issue a default on the original one as the date on the original default notice was 2 days earlier than it should have been.

There seems to be a lot of discrepancies and I think Lowell know that the debt could potentially be unenforceable.

The original debt is £832 and they’ve offered me to pay it off at the lowest amount they can do which is £230.

I have a few questions and would like to know if anyone has had any similar situations with Lowell and could offer any advice on where I stand potentially.

Is the debt enforceable if the default date was wrong? Can Lowell reissue the default notice AFTER they have bought the debt if the original notice is essentially void because it wasn’t correct? If the debt isn’t enforceable and Lowell shouldn’t have reissued the default notice, how can I get the default notice removed from my credit file?

Lastly, can a debt legally be sold on to a third party without a default notice? I see a lot of forums saying it can’t. So because PayPal never issued the default because of the error, this would have meant it shouldn’t have been sold on.

I want to get the facts/advice in order before I speak to Lowell and then potentially forward the complaint on to the ombudsman. 

sourcrates

From what you have said I see no real reason why the debt would not be enforceable, an incorrect date of default, nor the failure to issue a default notice, or issuing it late, will affect the debts enforceability.

If it was to go to court you may have an argument for Lowell failing to follow CCA guidelines, but I would expect the court to still find you liable for the debt.

Debts can be sold at any time, defaulted or not.

Lowell are a debt purchasing company and do not collect debts for anyone else, PayPal will have sold them the debt in 2022, which is odd as they don`t normally do that.

You can complain if the default date is not within FCA guidelines, i.e.. after between 3/6 contractual repayments have been missed.

£230 appears to be a good deal, makes me suspect something is not quite right, can they produce the CCA?.

DisabledDan

JH1345 said:

Hi All

I’m hoping for some advice with a default issue I have with PayPal Credit and Lowell.

I fell into financial trouble in 2021 and PayPal credit was one of the providers I wasn’t able to keep up repayments with.

To my knowledge, they never issued me with a default notice but they referred me to Lowell to collect token repayments on their behalf which I was doing and I had been doing this since 2022. During October 2023, PayPal then sold the debt to Lowell who confirmed this and that the repayment plan would remain.

Paypal has closed the account on my credit file in 2022 but when the debt was sold to Lowell in 2023 they asked the CRAs to change the account from “closed” to “defaulted” and now my credit file has the default from January 2024.

I contacted Lowell to discuss this as 1) the default date would be incorrect and 2) I never received a default notice from PayPal.

Lowell investigated this and said a default notice was issued from PayPal, they couldn’t send it via email due to the size of the file and that they would send it to me in the post. I’ve still not received the default notice that PayPal issued (which is a separate issue). Lowell then said they had to reissue the default notice as there was an issue with the dates on the original default notice and that Paypal couldn’t issue a default on the original one as the date on the original default notice was 2 days earlier than it should have been.

There seems to be a lot of discrepancies and I think Lowell know that the debt could potentially be unenforceable.

The original debt is £832 and they’ve offered me to pay it off at the lowest amount they can do which is £230.

I have a few questions and would like to know if anyone has had any similar situations with Lowell and could offer any advice on where I stand potentially.

Is the debt enforceable if the default date was wrong? Can Lowell reissue the default notice AFTER they have bought the debt if the original notice is essentially void because it wasn’t correct? If the debt isn’t enforceable and Lowell shouldn’t have reissued the default notice, how can I get the default notice removed from my credit file?

Lastly, can a debt legally be sold on to a third party without a default notice? I see a lot of forums saying it can’t. So because PayPal never issued the default because of the error, this would have meant it shouldn’t have been sold on.

I want to get the facts/advice in order before I speak to Lowell and then potentially forward the complaint on to the ombudsman. 

This may be of interest

Lowell Portfolio 1 Ltd v R  (2019) (Oxford County Court)   successful appeal– although not pleaded in litigant in person  defence  claimant had not complied with s.78 CCA 1974 and no evidence that a compliant default notice was served.

https://joannaconnollysolicitors.co.uk/notable-cases/