Creditor says they don't need to issue default notice with default?

[Ladybird]

Hi everyone,

It's been a while since I last posted here, mum's been v ill and I haven't been able to participate in forums like I used to!

I am hoping someone can help me. I had some debt written off in 2011 due to severe ill health (before write off I was on debt management plan). One of my creditors was a credit union with whom I had a loan (under £1000). I've been trying to get my finances sorted and when I looked through my paperwork, I didn't have any default notice from them, but they registered a default in 2011. I contacted the accounts department and asked if they could send me over a copy of the default notice and received the following reply:

"Your loan was originally defaulted on 18/08/2011 due to your DMP with CCCS, it was defaulted as the payment we were receiving from them was only a token payment and not something that would be accepted in normal circumstances. In this circumstance, a creditor does not have to provide written notice that they will be filing a default, therefore we did not issue one to you."

This doesn't really seem right to me, surely they have to issue a default notice regardless? Can anyone with a bit more knowledge than me tell me if what the creditor is saying is true?

Thanks so much for your time.

Lou

[oscar]

Re: Creditor says they don't need to issue default notice with default?

They are incorrect (sure someone will correct me if I am wrong)

They are obliged to provide you with a default notice (DN) under Section 87. This notice gives you the opportunity to correct the account balance and prevent the default.

Even if you entered a DMP, they still have to provide the DN

[Ladybird]

Re: Creditor says they don't need to issue default notice with default?

Thanks Oscar, that's what I thought, I just wasn't 100% as I know there's a lot of legalities around this sort of stuff!

[SXGuy]

Re: Creditor says they don't need to issue default notice with default?

Oscar is exactly right, infact, if they sent you one, and you paid the arrears within 14 days, then started token payments again, and kept doing this, they would have to in effect send you default notices every time. They cant apply a default without first giving you the opportunity to remedy the arrears. As you were part of a DMP, its usually sent to them instead of you. But it must be sent none the less.

[Ladybird]

Re: Creditor says they don't need to issue default notice with default?

Thanks SXGuy!

[Never-In-Doubt]

Re: Creditor says they don't need to issue default notice with default?

To elaborate - and clarify - they don't actually have to do anything. They'd be daft not to of course, as not issuing a s.87 Notice prohibits them taking legal action for the full sum.

So in basic terms, if they do not issue a s.87/88 notice they CANNOT enforce the debt so them acting clever buggers actually shoots them in the foot but they are under no obligation to default you. However they'd be muppets not to because that'd stop them enforcing.

The replies above are correct, based on common sense but lenders often lack exactly that so don't be surprised if they act stooopid as chances are - they are!!

[Ladybird]

Re: Creditor says they don't need to issue default notice with default?

Never In Doubt - I just saw your reply, thank you

I did go back to the credit union with info re above and they came back and said they are not regulated by CCA due to being a credit union, they don't subscribe to the Lending Code and that they can simply place a default if they don't agree to the amount coming from a DMP. I asked them if they ever contacted me or the DMP provider to say the amount was not enough and they have confirmed they never contacted either. Surely they have to let me know they don't agree to the amount from DMP before defaulting?! How else am I supposed to know, they never gave me a chance to rectify it!

Any advice and relevant legislation would be greatly appreciated!

Thanks,

Lou