Consumer Credit Act, regarding overdraft

jondaina · 7 April 2014 at 7:01PM

Hello,

Very sorry if this is not in the right place, I am a complete newbie and could not find a more relevant section to post this in.

I seek advise please. I recently was contacted by Wescot debt management and asked to pay £580 in relation to an old student account I once had with Natwest (I actually thought I had paid the overdraft off 4 years ago but must have missed the remaining amount). I asked for proof of the original agreement in writing, quoting section 78 of the consumer credit act. but the bank has sent me a letter saying

"The bank does not require customers to sign an agreement under the consumer credit act in order for an overdraft facility to be applied to their account. Therefore a copy of the signed agreement is not available and does not need to be provided to you under the terms of section 78. All borrowing facilities are finalized by way of confirmation letter."

Is this accurate information from them? I did have a go at getting a reduced settlement, but they only offer a partial settlement, which I would rather avoid.

The other curious point is that this account (though I did definitely have it) is not showing up on my Experian credit report, Wescot said it has definitely defaulted but as there is no sign of this account the default is not showing, even though I made my last payment to this account about 4 years ago so it should show..

I am not sure where I stand with this.. whether to just pay it (though I think the remaining amount is just charges on a small amount left in there (under £100)) or whether I need to respond to the letter and get more information.

I would really appreciate any advise.

Thank you

Jon M

Tixy · 8 April 2014 at 12:25PM

Yes what they have replied with is correct. A request under s78 is not valid for a bank account/overdraft.

You could still ask them to provide proof of the debt (i.e. proof of the balance they claim is owed and proof of their right to collect the debt) if they haven't already done so.

In terms of there being no default on your credit file, was the account active up to 4years ago? or had your defaulted on it sometime before that? defaults will only stay on your file for 6years from the original default date that was recorded on your file.

Alternatively have you checked all 3 agencies to see it is not on any of them? have you checked that any/all your past addresses appear on your credit report? if not that can sometimes be why a default doesn't appear (but may then reappear if the addresses are linked).

jondaina · 8 April 2014 at 2:05PM

Tixy wrote: »

Yes what they have replied with is correct. A request under s78 is not valid for a bank account/overdraft.

You could still ask them to provide proof of the debt (i.e. proof of the balance they claim is owed and proof of their right to collect the debt) if they haven't already done so.

In terms of there being no default on your credit file, was the account active up to 4years ago? or had your defaulted on it sometime before that? defaults will only stay on your file for 6years from the original default date that was recorded on your file.

Alternatively have you checked all 3 agencies to see it is not on any of them? have you checked that any/all your past addresses appear on your credit report? if not that can sometimes be why a default doesn't appear (but may then reappear if the addresses are linked).

Thank you Tixy.

That has cleared it up for me. I thought overdraft debt would be treated like credit card or loan dept, but I now see that as incorrect.

They have provided the outstanding balance although I was hoping to see more of a break down of how much was made up of charges. It does not really matter I suppose as I will pay it now anyway.

By my reckoning the default would have happened less than 6 years ago. I have only checked Experian so far but it does show all of my previous addresses and also shows the Natwest credit card account that I had when the student account was opened, but not the student account itself. I shall sign up for an Equifax account and check there. I hope it does not suddenly pop up as I have spent the last 6 years paying off student debt and repairing my credit rating. I thought it was all gone (bar the student loan) until this came up. Totally my bad though and it will be nice to be rid of it (again) lol.

Thank you very much for you help it is greatly appreciated

rizla_king · 8 April 2014 at 2:35PM

They do not have to provide an agreement but they still have to provide a breakdown and statement of account. They are not exempt that part AFAIK.

Tixy · 8 April 2014 at 2:40PM

Yes I would still ask them for a full transaction breakdown of the alleged debt.

You might want to think about offering a reduced figure in full & final settlement of the debt (https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx)

jondaina · 8 April 2014 at 3:59PM

Thank you both for your replies.

I have asked Wescot twice now about a reduced full and final settlement but they cannot do this. Something to do with their contract with Natwest, it's either the full amount or partial settlement. Unfortunately no middle ground on that.

It's good to know I can request a full transaction history of the debt. I may be wrong but is that information only helpful if I could make a deal on a full and final settlement, like offer to pay the amount minus the charges for example? In this case that's not going to happen as there is no option of a reduced full and final. So as I see it I'm left with the choice of just paying it or taking the partial settlement. As I don't want a partial settlement showing on my credit history I see no option but to pay it. I think I have this right, but please do say if i'm wrong in my assumptions.

Thank you

jondaina · 18 April 2014 at 12:20AM

Well, I have now paid off the debt and showing on my credit report is the account (which was not shown before) and a fresh default notice.. The thing is the default is showing from the 8th April 2014!!! Can they do that, is that how overdraft debt works? It was a debt from a long time ago so I assumed if anything it would be a few years into the default notice already. I am not sure what to do. I really was hoping to get a mortgage in 2 - 3 years time but it seems I will have to wait a bit longer.

Any advice would be apreciated

happy_bunny_2 · 18 April 2014 at 8:08AM

jondaina wrote: »

Well, I have now paid off the debt and showing on my credit report is the account (which was not shown before) and a fresh default notice.. The thing is the default is showing from the 8th April 2014!!! Can they do that, is that how overdraft debt works? It was a debt from a long time ago so I assumed if anything it would be a few years into the default notice already. I am not sure what to do. I really was hoping to get a mortgage in 2 - 3 years time but it seems I will have to wait a bit longer.

Any advice would be apreciated

Who reported the default. Natwest?

What does the account history show before the default date?

What they have done does not sound correct. Write to them, complaint, telling them to correct the default date. Refer to FOS if they refuse. I wouldn't suggest a date at this point, just say it should have been several years ago. See what they respond with.

Overdraft default dates are not clear cut and are usually when they formally demand repayment. But there are other indicators of a default in the ICO default guidelines.

jondaina · 19 April 2014 at 1:21AM

Thank you Happy Bunny. I have to assume it is Natwest who has reported it, I can't find that on my credit report. It is strange as I have done nothing with this account for years as stated in previous posts (I thought it had been paid off), but Experian shows that I started to miss payments from 7 months ago resulting in the default notice now. Up until 7 months ago everything is showing as green and all ok even though I have had nothing to do with it for years. Seems very suspect to me, but we shall see.

Thanks for pointing out 'ICO default guidelines' with respect to defaults, has been an interesting if somewhat confusing read but from what I can tell it does seem that a default should have been placed on my account a long time ago i.e when I stopped paying money into the account as per the agreement I had with them. I shall write a letter of complaint asking them to correct the default date as you suggest. I guess I will have to wait and see how they respond.

Thanks again, I shall update when I know more. Hope your enjoying the Easter Weekend

Consumer Credit Act, regarding overdraft

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