Default Concerns - First Direct

[Blodwin]

As some of you will know, I have an ongoing dispute with Barclays over an arrangement to pay marker on my credit file despite a 6 year Default dropping off my CRFs in May. I have indeed been paying Barclays by arrangement since the Default in 2006.

I now have an issue with First Direct. It is a different problem but will impact upon how I deal with Barclays as well.

Briefly, I have been in an arrangement to pay First Direct since 2006. I had an overdrfat, a loan and a credit card consolidated byt hem into a super overdraft in 2006. They didn't default those acounts back in 2006. They should have but didn't.

So I've ben paying them 200 quid a month for 6 and a half years. In October I was late for a payment and I missed one completely in November. They have now defaulted me and filed a Default with the CRAs.

My questions are:

1. Is there anything in the OFT Guidance on defaults I can use to argue that this Default is unfair and should be removed because it is for an historic debt that should have been defaulted more than 6 years ago?

2. If not, am I best not paying First Direct and Barclays anything and just let them get on with obtaining a CCJ?

[Never-In-Doubt]

Re: Default Concerns - First Direct

If you only missed one payment then no, they cannot just jump in with a default. The ICO guidelines suggest you must miss 3-6 payments prior to being formally defaulted. In any case, I would consider sending a secure message and questioning it and threaten to complain to ICO and FOS unless they remove it and replace it with a [1] (correct update) or even leave it as a [0].

You can't go to ICO/FOS unless you first complain to the bank. Good luck

[ken100464]

Re: Default Concerns - First Direct

"If a lender accepts an ‘arrangement to pay’ as an alternative to filing a default, and the customer fails to make any of the agreed repayments, then a default can be filed straight away."

Just found this on the ICO guidance to lenders which I am sure isnt very helpful to the OP.

When I was researching my own red 6 markers I came to the conclusion that AP markers were really not very helpful at all to anyone except the Bank. It is actually better to get the pain over with by defaulting ASAP. Then although you have it for 6 years least you can move on with your life.

An AP marker allows the bank to keep the threat of a default as ammunition to keep you paying.

For me I think perhaps the idea that by going onto an AP then its unfair you are penalised as against someone who decided to not pay at all.

In your case you have. However my feelings are the bank will just throw the guidance above back at you.

[Never-In-Doubt]

Re: Default Concerns - First Direct

"If a lender accepts an ‘arrangement to pay’ as an alternative to filing a default, and the customer fails to make any of the agreed repayments, then a default can be filed straight away."

Sure, if the lender comes to a mutual agreement but in this case the lender created one new super-account for all the debts to go into one basket which in essence comes with it's own rights, and part of those rights would surely supercede the ICO guidelines quoted above because the agreement is a whole new one (certainly in content and form, as the min repayments, apr etc will all be new).

The paragraph you refer is explicitly used say if you have a credit card and the bank says "ok, for the next 12 months we'll let you pay just £10 p/m till you get a job" and you then miss ANY of those payments, they can immediately default you.

Similarly, this is compounded with the following example.

You also have to consider the previous state of play, lets say I contacted my bank before any missed payments and said to them "can you please help" to which they created a super-account and merged all 3 debts into it. I then pay the set amount for 6 years and miss one, technically because at the time of the agreement for the super-account there was NEVER any missed payments, the bank can only add a status [1] marker at worse. They have no right to default me period as I was never, in the history of the account, at default stage. The agreement of the super-account was never an alternative to default as at the point it was set-up, the main 3 accounts were all live and up to date.

Hope the above makes sense.

[ken100464]

Re: Default Concerns - First Direct

Totally agree and would be my way forward.

Just know something that looks like a weazel, smells like a weazel and acts like a weazel usually is indeed a weazel.

I have learnt that lenders pick and choose what they want to quote back at us but never in the context of the whole. Just what makes their position stronger and seemingly sensible.

You just have to learn to quote stuff back at em.

An AP marker should be short term (6 months seems to crop up alot in guidance) unless it becomes something formally agreed.

You can bet your last cent this has no formal paperwork attached to it so the lender is working on the premise its a short term AP so can do as the guidelines states.

But the facts show this to be entirely different animal and the lender should have either defaulted 6 years ago or come to a formal arrangement. A resheduled agreement if you like.

If its a formal arrangement then bingo they cant do what they have. If its not then the default should have happened yonks ago.

Either way in the greed to get the money the lender hasnt done what it should have done and now despite the OP paying is penalising him worse than if he hadnt paid at all.

And that would be my angle of attack.

But I think the AP marker is a growing area of mis use by the credit industry.

They dont like the idea of their own rules of 6 years removing these accounts from the CRA if defaulted so have come up with another wheeze.

AP's keep the account live past the date it really should have gone by their own rules.

[Blodwin]

Re: Default Concerns - First Direct

Thanks for that post Ken. You are spot on.

[cardiac arrest]

Re: Default Concerns - First Direct

So, just out of interest...an arrangement to pay...on an existing rather than a 'new' arrangement is essentially short term (6 months). So if it is extended, to a year..or 18 months..or even 6 years and beyond...does that change anything ?

What was a short term 'fix', has become a long term arrangement...you could say a permanent arrangement maybe...would it still be subject to a default at one missed payment, or does it effectively become a new 'contract' ?

[Never-In-Doubt]

Re: Default Concerns - First Direct

If there's an AP marker for 5 years and you miss a payment they *can* default you there and then meaning 11yrs adverse. Thus I always say stop paying and get defaulted cos you know where you are and they're only bad bad for 3 years anyway.

AP's are very bad, worse than a number [4] marker to some and they remain in account conduct history viewable for 6 years rotating.

If you have any form of AP and break it the lender can default you at that point.

[cardiac arrest]

Re: Default Concerns - First Direct

....okay, and if you already had a default marker, which is now past the 6years and gone...and still have the arrangement to pay in place..a notional one say, the creditors only recourse for missing one would be to 'demand' the full amount presumably, possibly via court action.?

So do you carry on for ever, or go the UE route and do a CCA request ?

[ken100464]

Re: Default Concerns - First Direct

What was a short term 'fix', has become a long term arrangement...you could say a permanent arrangement maybe...would it still be subject to a default at one missed payment, or does it effectively become a new 'contract' ?

Exactly. They are using Joe Publics ignorance to keep accounts alive and reportable and therefore keep an ace up the sleeve if Joe Public starts to mis-behave again. Its short term so can and will default when it suits them to. 6 years paying you screw up one payment bang default.

What they should be doing and what they are doing is two completely different things and AP's are becoming a big area of misuse and abuse.

If you follow through the guidance the ICO is hoping a solution acceptable to both parties can be forthcoming hence not wanting a position where you miss one payment you are defaulted. Sensible

Hence the 3-6 months of not paying and not talking to a creditor and you can expect a default for you pains.

Talk to your creditor and they have the AP as a temp solution.Lets the punter get back on his feet and RESUME the original agreement.

However if you within this temp solution break what has been agreed then quite rightly they can default you straight away.

Again the guidance seems quite explicit if after about 6 months and there is still a breakdown of the original agreement they should either default you or come up with another agreement. Ie the original agreement is broken down so must default or we going to make a new agreement and reshedule payments within that agreement.

Therefore if a new agreement and you start messing about it will be the normal default timescale. Certainly not one missed payment and bang.

What they shouldnt be doing is if you are on an AP is penalising you more than if you had not paid at all. They also should not be using an AP in lieu of a default. ICO clear on this

They are using the publics inate fear of the default to abuse the system and it is only when the debtor emerges from the nightmare he realises the AP is just as bad if not worse than having a default in the first place.

We have a Halifax account paid down now where OH kept up some form of payments for 3 years. They marked AP. Thats going to be on her CRA till 2018. She entered the AP the same time that RBS defaulted her for paying the same amount. Halifax told her they were being a good bank and kind to her.

RBS acount will be gone in 2015.

If she had stopped paying Halifax it would have defaulted and be gone with the rest of em. Who is the good bank now? What benifit does the OH get for paying for 3 years. She is penalised.

If I knew what I know now then, I would have demanded a default off Halifax and if they didnt play then report them to the ICO. It is actually what happened its factual she fell on hard times.

What isnt factual is a string of AP's when we didnt know what we were talking about and the bank managed to con us into believing them.

[cardiac arrest]

Re: Default Concerns - First Direct

Couldn't agree more ken.. It's ironic how one bank will state that they need to default so that they can put you on to an AP, yet another Bank will put you on an AP and threaten default if you miss one.

If you 'complain', they just say " We followed our banking rules..."

I too fell for this, thinking at the time they were doing me a big favour..an AP for 6 months, then another for 6 months, then an AP with interest and fees charged for 3 months, then another AP without interest charged...then bang they got fed up, defaulted and sold off...even though I never missed a payment.

So the CRA marker is sat on my file for another 18 months, whereas if I'd been wiser back then, it would be off my file by now.

Live and learn eh ...

[mgfboy]

Re: Default Concerns - First Direct

If you only missed one payment then no, they cannot just jump in with a default. The ICO guidelines suggest you must miss 3-6 payments prior to being formally defaulted. In any case, I would consider sending a secure message and questioning it and threaten to complain to ICO and FOS unless they remove it and replace it with a [1] (correct update) or even leave it as a [0].

You can't go to ICO/FOS unless you first complain to the bank. Good luck

Mate HSBC defaulted me after just one payment, so if they want to be gits they will, we all know guideline seems to mean nothing HSBC.

[Blodwin]

Re: Default Concerns - First Direct

I've noticed on my credit file that the bank marked the account as satisfied and then passed it to a DCA who filed a Default.

[Blodwin]

Re: Default Concerns - First Direct

Couldn't agree more ken.. It's ironic how one bank will state that they need to default so that they can put you on to an AP, yet another Bank will put you on an AP and threaten default if you miss one.

If you 'complain', they just say " We followed our banking rules..."

I too fell for this, thinking at the time they were doing me a big favour..an AP for 6 months, then another for 6 months, then an AP with interest and fees charged for 3 months, then another AP without interest charged...then bang they got fed up, defaulted and sold off...even though I never missed a payment.

So the CRA marker is sat on my file for another 18 months, whereas if I'd been wiser back then, it would be off my file by now.

Live and learn eh ...

Absolutely spot on post.

[putupon12]

Re: Default Concerns - First Direct

whats an ap?