Possible Unlawful Defaults

[Stylie959]

Hi All,

First post so please be gentle. I am coming to the end of a DMP I have been paying religiously since 2009 and am in a position to offer settlements.

I have finally summoned up the courage to check my Experian report, I have 758 points. I have had a Capital one card since 2012 which has been paid every month. I also have a flawless mortgage record as well.

My problem is that of the 10 companies I am paying too through the DMP 7 have registered defaults. 4 of them I have no issue with as they were issued in 2009, one is 2010, one is 2011 and one is 2013! Clearly the 2013 default is wrong on every level, however what is the best way of challenging them on this?

My initial thought is to make the removal of it a condition of the full and final settlement whilst backing that up wit/
h threats of reporting them to the ICO under principle 4 of the DPA (information must be up to date an accurate). Does anyone think that this route would be successful?

My second thought would be to just go full aggressive mode and ignore any settlement and just go with reporting them to the ICO and possibly the FSO.

As some background I am no stranger to litigating against financial institutions having successfully sued MBNA under the data protection act for reporting defaults on a card that they knew had been obtained in my name by identity theft, Went to court and everything. (That was back in the days before I had arrears and a DMP!).

Any help at this stage would be gratefully accepted as most of my defaults drop off next year and I am looking to move house. The 3 defaults that I wish to have changed are -

Co-Op Bank (Smile Account) - Default 2013 - DMP Started 2009
Lloyds Bank Mastercard Platinum - Default 2011 - DMP Started 2009
Halifax (Current Account) - Default 2010 - DMP Started 2009

[MrsD]

Re: Possible Unlawful Defaults

I would fight first, you've technically got nought to lose and they are wrong, it should be within six months of the actual breach not years later. As a first step I would write asking them to remove or update, I certainly wouldn't be offering any settlements at this stage, not a big fan of DMPs me. Have they all stopped interest?

[Stylie959]

Re: Possible Unlawful Defaults

Yes, all interest was stopped. In hindsight I would not use this route again but was in position that seemed never ending at the time. I will go with your advice and put the settlement to one side at the moment and just ask them to remove / alter the default. My thought was that the settlement may provide the carrot but I guess that can form a solid plan B.

[Stylie959]

Re: Possible Unlawful Defaults

Here is the letter that I have put together for this. Any thoughts appreciated.

Reference: **********
Dear Sir or Madam,
We write with regards to the aboveaccount and the default that you registered on the account dated 3^rdJune 2013.
We believe that this default is unfair,incorrect and inaccurate. In January 2009we entered into a debt management plan as we were unable to service our debtsbut still wanted to deal with them in a fair, reasonable and honest way. On ourbehalf the debt management company Pay Plan agreed debt management plans withall of our creditors which you agreed to accept. Since this point we have stuck to theagreement making the payments reliably and in full every month withoutfail. We have therefore upheld our sideof the agreement.
According to our credit record withExperian you started to mark our account as being in arrears in September 2009,9 months after agreeing to the repayment proposal. You then kept marking our account as 6 monthsbehind for a further 45 months before marking it as in default.
Guidance to lenders from theInformation Commissioner drawn up in consultation with lenders states that
“A debt managementprogramme (DMP) is when a customer enters a programme of repayment of all or anumber of their credit agreements that has been negotiated by a third party,‘not for profit’, debt adviser. By entering the programme the customer showsthat he is acting more responsibly than someone who makes no effort whatsoeverto pay what is due.” (From “The Data Protection Technical Guidance”, Version 3,02.08.2007)
The guidance goes on to say that withregards to current accounts a default should be registered within 3 months ofan obvious breakdown, i.e. credits no longer being made into the account, theaccount being closed or the overdraft becoming unauthorised.
We believe that your decision to entera default so late into the repayment plan is vindictive and is a greaterpunishment than we would have received for just ignoring the debtaltogether. We also believe that it iscontrary to the guidance provided by the Information Commissioner.
It is for these reasons that we askyou to either remove the default from our credit record entirely or to adjustthe date to the beginning of 2009 in line with almost every other company withwhom we entered the debt management plan with. This should be change with allrelevant credit agencies where the default is registered.
If we do not hear back from you within14 days we will be taking this complaint to the Information Commissioner forbreach of Principle 4 of the Data Protection Act 1998 which states that alldata should be accurate and up to date. We will also open a case with theFinancial Ombudsman Service.
We look forward to hearing from you.

[MrsD]

Re: Possible Unlawful Defaults

I would also complain to the CRAs they have a responsibility to reflect the conduct of your account honestly, they won't change anything without the bank's sayso but no harm in flagging it up with them

remember everything in writing with proof of posting

[PlanB]

Re: Possible Unlawful Defaults

My thought was that the settlement may provide the carrot but I guess that can form a solid plan B.

Always good to have a Plan B

And now to be serious.

If your DMP is coming to an end why do you need to make any F & F offers? Surely the DMP runs until the debts in the plan are paid off. Or are you wanting to exit the plan early?

We don't know anything about your debts yet but if any if them are *enforceable* in a court of law then there will still be a risk that the creditor could issue a court summons which results in a CCJ (and a possible Charging Order on your home since you say you have a mortgage) which will stay on your CRA file for the next six years never mind the defaults. Creditors tend not to issue legal proceedings while you are in a DMP (some of the bastards do) but once you exit the DMP will you not be vulnerable to court action from any debts which are *enforceable*?

Just something else you may wish to consider

[ey_137]

Re: Possible Unlawful Defaults

Here is the letter that I have put together for this. Any thoughts appreciated.

Reference: **********
Dear Sir or Madam,
We write with regards to the aboveaccount and the default that you registered on the account dated 3^rdJune 2013.
We believe that this default is unfair,incorrect and inaccurate. In January 2009we entered into a debt management plan as we were unable to service our debtsbut still wanted to deal with them in a fair, reasonable and honest way. On ourbehalf the debt management company Pay Plan agreed debt management plans withall of our creditors which you agreed to accept. Since this point we have stuck to theagreement making the payments reliably and in full every month withoutfail. We have therefore upheld our sideof the agreement.
According to our credit record withExperian you started to mark our account as being in arrears in September 2009,9 months after agreeing to the repayment proposal. You then kept marking our account as 6 monthsbehind for a further 45 months before marking it as in default.
Guidance to lenders from theInformation Commissioner drawn up in consultation with lenders states that
“A debt managementprogramme (DMP) is when a customer enters a programme of repayment of all or anumber of their credit agreements that has been negotiated by a third party,‘not for profit’, debt adviser. By entering the programme the customer showsthat he is acting more responsibly than someone who makes no effort whatsoeverto pay what is due.” (From “The Data Protection Technical Guidance”, Version 3,02.08.2007)
The guidance goes on to say that withregards to current accounts a default should be registered within 3 months ofan obvious breakdown, i.e. credits no longer being made into the account, theaccount being closed or the overdraft becoming unauthorised.
We believe that your decision to entera default so late into the repayment plan is vindictive and is a greaterpunishment than we would have received for just ignoring the debtaltogether. We also believe that it iscontrary to the guidance provided by the Information Commissioner.
It is for these reasons that we askyou to either remove the default from our credit record entirely or to adjustthe date to the beginning of 2009 in line with almost every other company withwhom we entered the debt management plan with. This should be change with allrelevant credit agencies where the default is registered.
If we do not hear back from you within14 days we will be taking this complaint to the Information Commissioner forbreach of Principle 4 of the Data Protection Act 1998 which states that alldata should be accurate and up to date. We will also open a case with theFinancial Ombudsman Service.
We look forward to hearing from you.

Good post and similar situation to mine Cap1 did the same to me 27 months after starting a debt management plan in 2007, currently there not accepting it's unfair and saying it's a true reflection of account but I may steel your letter and fire that back to them.
Barclaycard on the other hand agreed and cleared the account off my credit file stating "they would not show an arrangement to pay marker or an account in DMP for longer than 6 years"
Fingers crossed for you..

[PlanB]

Re: Possible Unlawful Defaults

My problem is that of the 10 companies I am paying too through the DMP 7 have registered defaults. 4 of them I have no issue with as they were issued in 2009, one is 2010, one is 2011 and one is 2013! Clearly the 2013 default is wrong on every level, however what is the best way of challenging them on this

Did/do you have PPI on any of these 10 accounts because we have a sh*t hot PPI reclaim team on board if you did/do. This could have a favourable impact on any F & Fs you may want to make.

Have any of those 10 accounts been sold on to debt purchasers? Because if they have then you can claim a PPI refund off the original creditor who must refund you direct and not offset it against the balance due to the replacement account holder (i.e. the debt purchaser).

It maybe a good idea to post up some more information about all your debts/accounts so we can take a holistic approach to your question. If there's PPI refunds possibly due then you could be quids in.

[PlanB]

Re: Possible Unlawful Defaults

I also have a flawless mortgage record as well.

. . . . I am looking to move house.

Can you give us a little more information on your current mortgage and intended house move.

It's possible that your mortgage is portable and at that stage your lender may re-underwrite you and make a negative/positive decision based on the CRA files despite your flawless record with them.

If you plan to apply for a whole new mortgage product from a different lender then that changing things too.

[Stylie959]

Re: Possible Unlawful Defaults

Thanks for all the comments.

Mrs D - Have sent the letters off today to be signed for with proof of posting. Have also contacted the CRA's, Experian have got back to me to say the will look into it and that they have added a note to my file to state that some of the information may be inaccurate.

EY_137 - Feel free to use the letter as a template if it suits your purpose. It is pretty aggressive but it is pretty much the first time for 6 years that I have held any cards and think they deserve a bit of their own medicine.

Plan B - Firstly love the user name and am very glad to have an actual Plan B in my corner. Secondly to answer your points:
i) It feels like the DMP is coming to an end, I have been offered some cash and am in a position to clear all of the debts, essentially the end is nigh, although the DMP still has 4 years to run.
ii) As far as enforceable is concerned, and I know this might be controversial, but I took the money, had one hell of a time travelling and partying, then had kids and realised our lifestyle was no longer supportable on 1 salary. My wife is back working, I have more than doubled my salary in the last 5 years so want to pay everything off and get going again. It is not the debts I dispute, just the way in which they are being recorded and handled. I have been as fair and open as I can, some of the lenders have tried to take me for a ride.
iii) I was bought up to be always aware of what I was buying and to never accept any add ons on credit cards. For one I did not listen (Halifax), and on that I am claiming back the PPI, on the other 5 credit cards I very clearly rejected their offers of PPI and made sure to check it was not applied.
iv) The following are the 10 creditors and the default dates:

Barclays Bank (Egg Card) - 19/01/2009

Co-Operative Bank (Smile Account) - 03/06/2013

HBOS (Current Account) - 22/02/2010

HBOS (Gold Credit Card) - 19/05/2009

HSBC (John Lewis Card) - Not on file

Link Financial (Student Loan) - Not on file

Lloyds Bank - (Platinum Card) - 14/12/2011

Natwest (Mint) - 12/03/2009

Paragon (DCA) (Moorgate - M&S) - 29/11/2009

SLC (Student Loan) - Not on File

The worst part of it is of the accounts marked as defaulted the total at default is around £35k. The Co-Op default accounts for £600 of this!

v) As far as the mortgage is concerned, my daughter started yr 7 at a Grammar school some 15 mile away so are looking to move closer to her school. I currently have a tracker mortgage with Halifax (HBOS) so am looking at a whole new product ideally with my current bank as they have been good to me and have some good fixed rate offers (HSBC Advantage). We also have a much higher family income so are looking to borrow quite a lot more money on the mortgage, so a new product is the way we will need to go. The reason I mentioned the flawless mortgage record was really to highlight that I have always prioritised the payments that really matter (always have a roof over your head), and also because I use it to justify to myself that I really am a safe bet, just circumstances moved faster than my wallet.

[MrsD]

Re: Possible Unlawful Defaults

I think the basic fact is that you won't get another mortgage while you have defaults littering your credit record, sad but true.

so to get another mortgage you would have to wait until it is clear and come up with a sizeable deposit, the fact that you have a spotless mortgage record will count for nothing because of the defaults.

I do take issue with the point that any bank has been good to you, trust me they haven't, they've just appeared to be good to you to get as much money as possible out of you. I've seen thousands of horrendous stories on here in my time as a Mod and I can assure you that the only person who will look after you financially is you, certainly not any bank and you put you and yours finances in a sticky situation if you rely on a bank, because believe me when the chips are down, they are only interested in the money.

Hard but again, sadly true.

[Stylie959]

Re: Possible Unlawful Defaults

Thanks for all the comments and feedback so far. I have some positive news to share, The Co-op have changed the date of the default with no fuss or argument. Essentially that default now expires in 6 months rather than 5 years.

[ey_137]

Re: Possible Unlawful Defaults

Thanks for all the comments and feedback so far. I have some positive news to share, The Co-op have changed the date of the default with no fuss or argument. Essentially that default now expires in 6 months rather than 5 years.

Brilliant news... :-)