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Default without credit agreement

edited 30 November -1 at 1:00AM in Loans
25 replies 1.1K views


  • edited 9 October 2019 at 6:31PM
    4.8K posts
    edited 9 October 2019 at 6:31PM
    cplmadison wrote: »

    Just after a bit of advice

    last year (sept 2018) i purchased home contents insurance for the princely sum of £120 this "expired" sept 2019. It seems the insurer as renewed the cover without me knowing It is not uncommon for insurers to auto-renew a policy although they should have written to you and should also have advised you of the cost of the new policy and provided full details of the new monthy payment and the date of the first direct debit and Premium Credit who deal with the monthly repayments have been spamming me for 2 or 3 weeks This is not SPAM! telling me I have to sign the credit agreement or face default charges etc Very odd. Why should they be saying this? Sign a credit agreement or face default charges? Really?

    Now as I didnt ask for my contents insurance to be renewed I was initally reluctant to sign.Strange comment. Did you or did you not want to renew the contents insurance. You have subsequently implied that you do not want to be without contents insurance but you had not made alternative arrangements elsewhere, so what exactly did you want? Had the credit agreement that they wanted you to sign already been sent to you by post? If not, how did these so-called spam e-mails suggest that you sign something that you did not have?

    On October 2nd 2019 (yes 7 days ago) I decided hey maybe I should carry on with the insurance it isnt much, so I signed the Credit Agreement. As asked above. How and when did you receive this credit agreement? On October 4th (2 days later) I was issued with a Default Notice as the payments for September 2019 werent made (as we had no valid credit agreement). This is very odd and makes no sense to me.The non-existance of a signed agreement should not have prevented the direct debit being taken unless they took this as a desire on your part not to renew and they chose not to take the direct debit in which case there would have been no default.This is however highly unlikely. Furthermore an account does not default after one missed payment. THe insurance company would like to retain your business not trash your credit file.
    My question is, is the Default registered on my credit file legal since I only had only signed the agreement 2 days previously and can I / Should I cancel the agreement within my 14 days. Would cancelling within my 14 day period automatically void and remove the default?

    Ive spent 5 years slowly building up my credit score after a period of bad debts in order to get a mortgage in March 2020 and was almost there but now these guys seem to have screwed it all up for me again Your credit score is meaningless and I feel sorry that you have spent 5 years building up a meaningless number

    Seriously regretting signing the agreement but can they really enforce septembers payments on me when I only signed in October? Doesnt the credit agreement start from the date of my signature?

    Appreciate any help!

    Se comments above.
    cplmadison wrote: »
    tbh i cant remember where i initially purchased the insurance from but i will check

    my main concern is receiving a default notice 2 days after signing the credit agreement

    That is an easy one to answer. The default notice would have been printed and made ready to be posted more than 2 days before you received it.
    cplmadison wrote: »
    they claim i cancelled a direct debit just because within 2 days of signing they failed themselves to get one setup with my bank !

    What? This makes absolutely no sense. A direct debit cannot be set up and taken in two days! But why would they need to set up a new direct debit? The old one would just have continued automatically. Did you cancel it???
    cplmadison wrote: »
    well finally managed to have a phone call

    Yes i do have a default on my credit file

    The reason for the default is the company tried to take a payment against a closed account

    something went wrong their end not mine, but this is going to screw with my mortgage app :(

    Now you appear to be saying that the bank acount on which the direct debit was set up has been closed? Has it?
    When you say you have a default on your credit file have you verified this or is that what they said to you?
    They really do appear have been VERY QUICK to inform the CRA's of this 'default'. Is it REALLY a default or a late payment marker?
    You also confirm in this post that you do have a default on your credit file as if you had just confirmed that fact yet in your OP you also mention having a default registered on your credit file
  • As you were provided with credit, the creditor owes a duty of care to you, that duty includes his duty to not act against your financial interests.

    His duty also includes his duty to undertake a proper investigation into this matter and to put it right. See - Durkin v DSG Retail Ltd & Anor [2014] UKSC 21.

    The reporting to credit reference agencies that you have defaulted is factually incorrect and untrue and defamatory and amounts to a fraudulent misrepresentation.

    You should set out the facts of this matter in writing to the creditor, remind him of his duty of care owed to you (cite the Durkin case in your letter), and tell him if he does not remove the incorrect default from your credit files within 14 days, you will bring a civil action against him for the sum of £8,000.00 on the above grounds.

    Stop speaking to the robots on the telephone! Keep all communications in writing only!

    Kind regards

    The Mould
  • If you signed the agreement on the 2 October 2019 and thereby entered into it, you cannot possibly be held liable for a payment said to be due in September!

    Kind regards

    The Mould
  • cplmadisoncplmadison Forumite
    18 posts
    10 Posts
    Thanks for all of your replies and advice lots to read through...

    To answer some of the questions

    The 2018 to 2019 direct debit is still on my bank account and hasn't been claimed since August 2019.

    The credit agreement arrived by email early September but I didn't sign it or agree at the time because i wasn't sure I wanted it as I have other insurance too

    Premium. Credit failed to setup a new direct debit on my bank account in this time, I assume because they had no credit agreement.

    This resulted in me missing my September payment as there was currently no valid agreement or dd

    When I did decide to sign the agreement In October it was 2 days before the next payment was due which didn't go through.

    Premium. Credits response was they tried to take the money from a closed account which they said was an error and they would investigate what happened. I don't know what they mean as my account is open, no dd was ever setup for the new agreement. In the default notice it says they tried to collect a payment by dd but I had cancelled the dd with my bank. This is untrue one was never set up and my bank can confirm this.

    I will check the date on the default notice too and post that up in a moment
  • cplmadisoncplmadison Forumite
    18 posts
    10 Posts
    The default notice is dated 8th October

    So 6 days after I signed the agreement and 3 days after my 1st payment wasn't collected
  • cplmadisoncplmadison Forumite
    18 posts
    10 Posts
    Oh and the default question I was told on my phone the default will be registered but they report to equifax at the end of each month

    So currently it isn't on my file but will be by the 30th

    So are you of the opinion court proceedings for 8000 should happen instead of ombudsman/ico or happen in conjuction with both?
  • edited 9 October 2019 at 10:10PM
    ThrugelmirThrugelmir Forumite
    72.1K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 9 October 2019 at 10:10PM
    cplmadison wrote: »
    The default notice is dated 8th October

    So 6 days after I signed the agreement and 3 days after my 1st payment wasn't collected

    Takes 10 days minimum to set up a new direct debit. You've been sitting on the paperwork far too long.
    “Markets have been so good for so long, that many investors are trivialising the advanatages of actively managing portfolio risk" - Gervais Williams
  • So, at the time they claim you missed a payment - Sept, there wasn't an agreement in place and the default notice is asking you to pay arrears that they claim were due in Sept, is that correct?

    I am of the opinion that you should send a letter to Premium Credit setting out the facts you have posted here.

    Your grounds of complaint/causes of action are fraudulent misrepresentation, data protection breach, damage to your economic position and breach of duty of care.

    The ICO is not going to help you remove the disputed default.

    Your letter should be addressed as Executive Complaint to the Director Mr Christopher Stephen Burke.

    Give them 14 days to acknowledge service of your letter, and another 14 days to give their reply.

    Put them on notice that in the event of them failing to engage in pre-action conduct, and in the event of them failing to put this matter right, you will institute proceedings without any further reference to them.

    Your letter will act as your Letter Before Claim for the purposes of pre-action conduct and you should send it by Special Delivery or Recorded Delivery for proof of service.

    It would be a good idea to also send a copy of your letter to the credit references agencies so as to make them aware of the disputed default.

    If no satisfactory resolution is reached, you can issue your Claim by Money Claim on Line the fee for an £8,000 Claim is £410.

    Kind regards

    The Mould
  • Ok, just re-read your first post.

    As the agreement wasn't in place in Sept, there is no legal obligation on you in Sept to make any payment, so you have not defaulted because there was no agreement for you to breach.

    Kind regards

    The Mould
  • boo_starboo_star Forumite
    3.2K posts
    Part of the Furniture 1,000 Posts
    The_Mould wrote: »
    Ok, just re-read your first post.

    As the agreement wasn't in place in Sept, there is no legal obligation on you in Sept to make any payment, so you have not defaulted because there was no agreement for you to breach.

    Kind regards

    The Mould

    A default on a credit file and a default notice required by law are not the same thing.

    Stop giving bad advice
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