Halifax Overdraft Default Woes

[fivezerothree]

I was referred to this forum by a member of another popular forum and was told that the mods and admin are really the mutts nuts when it comes to particulars of Default etc.

I will briefly explain how and why etc.

Opened a bank account as a bill account and it came with a £100 overdraft. I struggled financially for a good while and the overdraft escalated in charges up to £700. I couldn't afford the £5 per day charge even though I was putting money in the account monthly to help reduce the effect. My cries of financial difficulty fell on deaf ears and they defaulted me in April 2011.

Here's the tricky part. I only found out I had been defaulted last week with a credit report after being refused car finance. I received no letters of any sort nor was I informed. The account was simply closed at my request and they moved it onto their contracted out collections department, BLS.

Personally my life is much more on track nowadays, I have two good jobs but I now require a half decent car to afford the insurance premiums of a 25 year old new driver. The reason being is that to move up the line I need my own transport. I've tried to get insured on throw-away cars but they want in excess of £5000 to insure me... It seems a reliable and safe 5-9 year old car for above the £2500 range is more than affordable but I require the finance!

I have started the complaint process as no one until today could tell me exactly how or why I had been defaulted. Turns out I hadn't put any money in the account in February and March 2011 which led to a default.

I am currently sorting out my SAR request and already have a complete statement for the account history arriving in a few days for my own records.

My problem or rather question is that Halifax has said that they cannot provide a true certified copy of the letters (including warnings) that they sent because they literally don't have them.

Correct me if I am wrong but I thought it was a legal requirement for banks to keep a record of all sent correspondence? Secondly if the banks cannot provide proof that that they ever sent me a letter to default me or indeed a letter to tell me in advance that this would happen if I didn't bring the balance to zero – they can't substantiate the default?

I don't give up easily and have had my own way with many companies and banks before now. Probably the best being refunded for two years of Sky subscription just for poor service. However I realise that this journey will be substantially harder!

I'm confused as to what grounds to stand on now. It's worth noting that the debt still has £300 or so outstanding and I will pay it off as soon as I know I may have the smallest amount of bargaining power/ground to stand on. Otherwise I might as well pay it off at the agreement rate.

I would like anyones experience really or if anyone has any more information on the hoops that the banks have to jump through in order for it to be substantiated etc.

Many thanks and Happy Easter!

[CAPS ESC]

Re: Halifax Overdraft Default Woes

hi 503

interesting post, can't help you myself but looking forward to the comments that should be coming shortly. Hope it goes well for you.

[fivezerothree]

Re: Halifax Overdraft Default Woes

hi 503

interesting post, can't help you myself but looking forward to the comments that should be coming shortly. Hope it goes well for you.

Thanks Caps! I'm not sure that I have any ground to stand on because other than the fact they didn't send these letters or at least I didn't receive any of them I only have their unethical nature to comment on.

Being defaulted for not being able to pay an insane amount of charges each month is pretty disgusting behaviour – legal though! haha

I'm willing to try all angles though because job progression is on the line.

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Morning

Sadly as with most bank accounts, defaults get applied at weird and wonderful dates without notification. Unlike credit cards etc there is no requirement to comply with s.87/s.88 before they apply a default to your credit file.

Don't confuse the regulatory compliance of s.87/s.88 with an actual credit reference record.

That said, you say you only missed paying funds in for 2 months - is this accurate? Were you being charged at the time, ie was it authorised or unauthorised overdraft? I note this was applied in Jan/Feb 2011 yet it's not 2013, the complaint will fail as it is now 2013. However can you clarify, prior to that date were you maintaining payments into the OD and also, were you maintaining payments after those dates?

I'm asking, lets presume you paid money in on Dec 2010 then missed Jan/Feb 2011 but then paid in again March 2011 and cleared it later that year, if that was the case the default would be incorrectly applied. However if lets assume you missed those payments then paid some in then missed more and so on, then the DN might be valid.

A SAR is rightfully helpful, but be specific on what you need - statements is the key, a DN matters little unless they were taking legal action as a default on your credit file is not the same as a s.87/s.88 regulatory default notice in line with CCA(1974).

Should be able to help (explain processes), once you provide the missing blanks.

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Just to answer a couple of other points I missed....

I was referred to this forum by a member of another popular forum and was told that the mods and admin are really the mutts nuts when it comes to particulars of Default etc.

Awesome, glad to hear people still refer to us cos some of the other forums are a bit arsey about us and what it is we do

Correct me if I am wrong but I thought it was a legal requirement for banks to keep a record of all sent correspondence? Secondly if the banks cannot provide proof that that they ever sent me a letter to default me or indeed a letter to tell me in advance that this would happen if I didn't bring the balance to zero – they can't substantiate the default?

You are half wrong, unfortunately. Yes a bank must retain it's records, as must any business (in line with HMRC Recordkeeping) however you'll get copies of letters within your SAR - the staff have got slightly confused, that's all. Regards substantiating the default, you're confusing the regulatory compliance of s.87/s.88 with ICO guidelines on issuing a default.

s.87/s.88 means they must notify you before formally defaulting and terminating the account, however that has nothing whatsoever to do with any entry on your credit file and is totally separate. Forgetting the legal compliance of s.87/s.88 for now - the default notice registered with the CRA's will be based on ICO guidelines which simply state that the lender needs to apply the default on your credit file within 1-6 months of first missed payment. As you missed a payment in Feb & March, the fact they defaulted you with the CRA's in April is spot on as it was within 6 months. Hence any argument you have will likely fail as they will refer you to those guidance notes. It is not legislation, remember that - it is purely guidance.

See here --> http://www.ico.org.uk/~/media/docume...%20%20doc.ashx

I'm confused as to what grounds to stand on now. It's worth noting that the debt still has £300 or so outstanding and I will pay it off as soon as I know I may have the smallest amount of bargaining power/ground to stand on. Otherwise I might as well pay it off at the agreement rate.

You have few options, with regards to complaining as the default seems right from what you say in post 1. Come on, the bank can't be to blame for that - and I hate banks, but I have to say the truth, not what you want to hear. However, what you could do is wait till a DCA hassles you and then negotiate with them for repayment and removal of the DN.

Last option ,and worth noting, if you were in financial hardship and you expressed this to the bank and they ignored you and then applied a default, well that changes things - we could then argue the default and plead concession based on the financial hardship claim that was ignored.

Anyway, hope the info above helps - but don't stress about the default as it only has a negative effect for the first 3 years so assuming that's your only baddie on your credit file then you ought to be fine 3 years from the default, to apply and get most mainstream credit, including car finance.

Jen_br is good to speak to regards finance, she may be able to assist as her fella works for a huge firm and can sometimes help users of the forum (obtain credit). PM Jen here --> PM Jen_br allaboutFORUMS and say Niddy sent you

Good luck

[Enforcer]

Re: Halifax Overdraft Default Woes

Morning

Sadly as with most bank accounts, defaults get applied at weird and wonderful dates without notification. Unlike credit cards etc there is no requirement to comply with s.87/s.88 before they apply a default to your credit file.

Don't confuse the regulatory compliance of s.87/s.88 with an actual credit reference record.

That said, you say you only missed paying funds in for 2 months - is this accurate? Were you being charged at the time, ie was it authorised or unauthorised overdraft? I note this was applied in Jan/Feb 2011 yet it's not 2013, the complaint will fail as it is now 2013. However can you clarify, prior to that date were you maintaining payments into the OD and also, were you maintaining payments after those dates?

I'm asking, lets presume you paid money in on Dec 2010 then missed Jan/Feb 2011 but then paid in again March 2011 and cleared it later that year, if that was the case the default would be incorrectly applied. However if lets assume you missed those payments then paid some in then missed more and so on, then the DN might be valid.

A SAR is rightfully helpful, but be specific on what you need - statements is the key, a DN matters little unless they were taking legal action as a default on your credit file is not the same as a s.87/s.88 regulatory default notice in line with CCA(1974).

Should be able to help (explain processes), once you provide the missing blanks.

Brilliant, really helpful explanation. Wish I could remember all the sections. Watch my next post more lovely letters to send to Barclaycard executive office.

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Brilliant, really helpful explanation. Wish I could remember all the sections. Watch my next post more lovely letters to send to Barclaycard executive office.

Yea I am following your thread mate.....

[fivezerothree]

Re: Halifax Overdraft Default Woes

Just to answer a couple of other points I missed....
Awesome, glad to hear people still refer to us cos some of the other forums are a bit arsey about us and what it is we do

You are half wrong, unfortunately. Yes a bank must retain it's records, as must any business (in line with HMRC Recordkeeping) however you'll get copies of letters within your SAR - the staff have got slightly confused, that's all. Regards substantiating the default, you're confusing the regulatory compliance of s.87/s.88 with ICO guidelines on issuing a default.

s.87/s.88 means they must notify you before formally defaulting and terminating the account, however that has nothing whatsoever to do with any entry on your credit file and is totally separate. Forgetting the legal compliance of s.87/s.88 for now - the default notice registered with the CRA's will be based on ICO guidelines which simply state that the lender needs to apply the default on your credit file within 1-6 months of first missed payment. As you missed a payment in Feb & March, the fact they defaulted you with the CRA's in April is spot on as it was within 6 months. Hence any argument you have will likely fail as they will refer you to those guidance notes. It is not legislation, remember that - it is purely guidance.

See here --> http://www.ico.org.uk/~/media/docume...%20%20doc.ashx

You have few options, with regards to complaining as the default seems right from what you say in post 1. Come on, the bank can't be to blame for that - and I hate banks, but I have to say the truth, not what you want to hear. However, what you could do is wait till a DCA hassles you and then negotiate with them for repayment and removal of the DN.

Last option ,and worth noting, if you were in financial hardship and you expressed this to the bank and they ignored you and then applied a default, well that changes things - we could then argue the default and plead concession based on the financial hardship claim that was ignored.

Anyway, hope the info above helps - but don't stress about the default as it only has a negative effect for the first 3 years so assuming that's your only baddie on your credit file then you ought to be fine 3 years from the default, to apply and get most mainstream credit, including car finance.

Jen_br is good to speak to regards finance, she may be able to assist as her fella works for a huge firm and can sometimes help users of the forum (obtain credit). PM Jen here --> PM Jen_br allaboutFORUMS and say Niddy sent you

Good luck

Well what can I say Niddy, the user(s) of that 'particular' forum that shall not be named we're right. You are very, very helpful! If only the world had more people like yourself and your team with every other matter in the world!

I have taken onboard your points and it's basically making me lean towards dealing with it. I'm more than happy to admitting fault and paying for my mistakes but then again I don't think the harshness of the credit system was designed to make everyone succeed.

I thought I would confirm a few details. I have not yet received my SAR, because I have decided not just to ring up and ask for one but to do it in writing with the use of the many templates that are available.

I did however receive what I was told was a statement for the entire history of the bank account but it stops dead 31/08/2010 – Bell ends. I guess that will come with the SAR.

I am more than aware that all correspondence should be done in writing but I did initially lodge my 'basic' complaint over the phone and will receive a reply letter soon, so I will start then. However the lady on the phone read out the particulars of the letter which she said stated that "there was no payments between February and March 2011 – the reason why you we're defaulted."

However if you look at my credit report history it tells a different story, this time being three late payments. Not two none payments in Feb and March.

Last option ,and worth noting, if you were in financial hardship and you expressed this to the bank and they ignored you and then applied a default, well that changes things - we could then argue the default and plead concession based on the financial hardship claim that was ignored.

I find it a little uncomfortable to talk about these issues not because I'm embarrassed but some would see it as a sign of weakness and I'm extremely strong mentally given my life experiences. However at this very point in my life where I told them a few times about being in financial difficulty, I was also suffering from my first ever bout of depression. It crippled me as a confident member of management to a person that kept having panic attacks when others got arsey with me in store. As you can imagine I had to have a fair bit of time off due to not sleeping at all. The cause? Lack of money.

Proving any of the above is another matter entirely.

From what I remember, the overdraft charges spiraled and said I couldn't afford them I offered them something like £20pm and they said no, £100 per month is what we will accept and no less. As far as I remember I couldn't keep up with that because at the time it was something like a 1/5 or a 1/4 of my monthly wage.

Were you being charged at the time, ie was it authorised or unauthorised overdraft?

From what I can remember it was an unauthorised overdraft because the OD Facility was only £100.

but don't stress about the default as it only has a negative effect for the first 3 years so assuming that's your only baddie on your credit file then you ought to be fine 3 years from the default, to apply and get most mainstream credit, including car finance.

This is really interesting.. it would essentially mean I have little over a year left of 'full effectiveness' is there any more information on this I could read?

I no longer want credit on anything because it's so easy to fall behind in worse times, but a car is my first priority and effectively allows me to earn more.

[SA Gold]

Re: Halifax Overdraft Default Woes

This is really interesting.. it would essentially mean I have little over a year left of 'full effectiveness' is there any more information on this I could read?

I no longer want credit on anything because it's so easy to fall behind in worse times, but a car is my first priority and effectively allows me to earn more.

Hi 503, Welcome to the wonderful forum that is AAD.
Worth taking a look at this sticky here mate. Bottom line is most credit searches are three years history, mortgages being six.
Good luck and keep us all posted

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Hiya

Ok, well based on what you have said and shown, the Default entry might actually at fault.

Here is an example of when the process works --> Default on CRA Report **Removed** - Page 3 - allaboutFORUMS

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Can you clarify - something doesn't add up.

1. Why is the default £700 but the balance only £335?;
2. Did you have a formal Arrangement to Pay? If so, it appears you missed the first payment hence the default can follow at any given point if you break that arrangement;

Thing is, worse case, you would need to sit it out until April next year afterwhich you'll get accepted for most mainstream credit. But please try and answer the above, if you did agree to an AP then the default will stay, no matter how much we whinge to the CEO they will have good cause to apply it based on that one missed payment.

Shit, I know, but those are the rules....

[fivezerothree]

Re: Halifax Overdraft Default Woes

Can you clarify - something doesn't add up.

1. Why is the default £700 but the balance only £335?;
2. Did you have a formal Arrangement to Pay? If so, it appears you missed the first payment hence the default can follow at any given point if you break that arrangement;

Thing is, worse case, you would need to sit it out until April next year afterwhich you'll get accepted for most mainstream credit. But please try and answer the above, if you did agree to an AP then the default will stay, no matter how much we whinge to the CEO they will have good cause to apply it based on that one missed payment.

Shit, I know, but those are the rules....

The reason the balance is at £335 is because I have been paying it off at £20pm. So that's what AP stands for? I didn't understand that.

I don't think I broke the arrangement on the first payment of that arrangement. It confused me as to why it was there in the first place.

Would it be the process of the account moving from Halifax to BLS collections?

[fivezerothree]

Re: Halifax Overdraft Default Woes

I rang up Halifax one day to pay the monthly agreed amount – I cannot remember how much it was. They said "oh we don't deal with that account anymore, BLS does, here is the phone number."

A letter shortly arrived after they agreed £20pm would be suitable. But as originally stated, no mentions of default.

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

Hiya

Yes AP means Arrangement to Pay.

Regards your credit file, that suggests payment was made in Feb & Mar. The reason of the default, from reading your report suggests April's payment was missed so they went straight in with the default as per guidelines to issuance of default via CRA's.

Not many legs to stand on without the actual payment dates to hand....

Do you have statements? If not then you need to send a formal SAR ---> Subject Access (SAR) - Advanced Request - allaboutDEBT UK

[Never-In-Doubt]

Re: Halifax Overdraft Default Woes

I rang up Halifax one day to pay the monthly agreed amount – I cannot remember how much it was. They said "oh we don't deal with that account anymore, BLS does, here is the phone number."

A letter shortly arrived after they agreed £20pm would be suitable. But as originally stated, no mentions of default.

Now you know why we say NEVER phone a creditor..... we need the proof, ie letters