Requesting a default to improve credit rating

New day eventually responded 7 weeks later...

They’ve stated that as I entered into a payment arrangement the is no error in the information they’ve recorded. They did not default me and therefore can’t add a default date. I don’t think Barclaycard entered a default date either they just removed the account.

I’ve sent this to the executive complaints team today to see how I get on. If not I will escalate to FOS and ICO to see if they can help. Any other advice?

“I would like to give you a chance to review you final response before escalation to the Financial Ombudsman Service. I believe that my complaint has been misunderstood and that I have been treated unfairly.

My complaint has two elements:

· I am unhappy with the information recorded by NewDay on my credit report.
· I feel as though I have been treated unfairly compared to other customers for which I have provided an example.

Background

To provide you with some background information, I had problems making my usual monthly payments to NewDay due to financial difficulties, I entered into a Debt Management Plan (DMP) with Stepchange. I was unable to make the agreed repayments and the account fell into arrears. I continued to make reduced payments through my DMP. My DMP ended in July 2016 at which point the debt was fully repaid.

The FCA handbook states the following in relation to customers in arrears:
If a customer is in default or in arrears difficulties, the firm should, where appropriate:
· inform the customer that free and impartial debt advice is available from not-for-profit debt advice bodies; and
· refer the customer to a not-for-profit debt advice body.
It also states “When dealing with customers in default or in arrears difficulties a firm should pay due regard to its obligations under Principle 6 (Customers’ interests) to treat its customers fairly.”

Credit Report

The Information Commissioner’s Office (ICO) has published guidance stating “As a general guide, [a default may be recorded] when you are 3 months in arrears, and normally by the time you are 6 months in arrears.”

NewDay did not default my debt and instead updated my report monthly with an ‘Arrangement to Pay’ marker. This means the account and the payment history will be reported to the credit reference agencies until 2022. If NewDay had applied a default as per the guidance in 2011 then the account would no longer show on my credit report.

Unfair Treatment

I have been unfairly treated as the above places me into a considerably worse financial position compared to that of a customer who was defaulted. I entered into my DMP following advice from a not-for profit debt advice body. It ensure I continued to make payments and eventually clear this debt. If I had continued to ignore the problem and build arrears without reaching an agreement to make reduced payments then NewDay would have placed my account into default. A customer who has made every effort to repay their debt following financial difficulty should not be more harshly treated than someone who has not paid.

For your awareness in handling this complaint, I should also note that I issued the same letter of complaint to Barclaycard on the same date. In addition to resolving this issue much quicker than NewDay, Barclaycard found in my favour, agreed that I had been treated unfairly and agreed to amend the information recorded on my credit report. They agreed to remove the debt completely from my credit report. I can provide evidence of this if required.

I do not understand how NewDay, who are supposedly observing the same guidance and rules issued by the FCA and ICO have reached a different conclusion in reviewing my complaint. I think it is clear from the above that I have valid reason for complaint and that if escalated the relevant body will find in my favour. I ask that the team review this complaint and the final response as I am challenging your findings in relation to what has been recorded on my credit report – I believe the account should have been defaulted when you take into consideration the FCA and ICO guidance. I am also asking you to consider how I have been treated unfairly which seems to have been omitted from your response. Please review and respond as soon as possible.”