Help with Barclays Overdraft Default!

[kitkat]

Dear Niddy,

Firstly, I wanted to say a huge thank you on behalf of all of the people you seem to help. You are such a generous and kind spirited person to help all the people you have.

I hope that you do not mind me emailing you. I have checked my credit report and I appear to have a default on a Barclays current account. I did not recieve a defualt notice and have checked all of my paper work to be sure. Additionally, I feel that the circumstances in which I recieved a default are unfair. I would appreciate your advice on how to proceed and whether or not I should aim to get the default removed.

The default is for a £2000 interest free overdraft I had for a graduate account. The account was running fine until I organised a debt management plan to organise my other debts. I was advised by the CCCS (who I hold my DMP) to include all overdrafts in the DMP. As a result of including the overdraft in the DMP I then recieved a letter from Barclays to say that they were terminating my account. This was in May 2009. I am continuing (and have never missed) to make payments to Barclays via my DMP to pay off my overdraft. It seems rather illogical that they terminated the account as the overdraft was interest free and until the DMP was not being paid off. Now a regular montly payment goes to Barclays and the overdraft will be cleared much quicker than it would have done had I not arrnaged the DMP.

When I viewed my credit file I noticed that Barclays had placed a default on my account. I was since advised by Experian to place a notice of correction on my credit file to let potential creditors know the circumstances of the Default (however, do question its validity due to the fact that they did not supply me with a default notice). Additionally, it seems that the grounds for a default are rather unfair.

How much do you think the above might impact on my chances of obtainign credit in the future (e.g. my mortgage is up for renewal)?
Do you think it is worth trying to get the defualt removed?
Also, is it a good idea to have a notice of correction on my account?

The rest of my creditors have accepted my DMP and are showing my payments as on time with the exception of Cahoot credit card (£1500) who are showing that I am making a part payment each month.

I hope that this makes sense. I am extremely grateful for you taking the time and effort to read this email.

With very best wishes and many thanks

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

Firstly, I wanted to say a huge thank you on behalf of all of the people you seem to help. You are such a generous and kind spirited person to help all the people you have.

Aaaaw thank you and also thank you for your donation, prior to even posting here

I have checked my credit report and I appear to have a default on a Barclays current account. I did not recieve a defualt notice and have checked all of my paper work to be sure. Additionally, I feel that the circumstances in which I recieved a default are unfair. I would appreciate your advice on how to proceed and whether or not I should aim to get the default removed.

The default is for a £2000 interest free overdraft I had for a graduate account. The account was running fine until I organised a debt management plan to organise my other debts. I was advised by the CCCS (who I hold my DMP) to include all overdrafts in the DMP. As a result of including the overdraft in the DMP I then recieved a letter from Barclays to say that they were terminating my account. This was in May 2009.

Ok, overdrafts are exempt from the CCA so you really have little argument over this, however that said all overdrafts are repayable on demand thus meaning that if they give you 30 days notice (in line with the banking code/lending standards) then they are entitled to demand full repayment.

I am continuing (and have never missed) to make payments to Barclays via my DMP to pay off my overdraft. It seems rather illogical that they terminated the account as the overdraft was interest free and until the DMP was not being paid off. Now a regular montly payment goes to Barclays and the overdraft will be cleared much quicker than it would have done had I not arrnaged the DMP.

Well this is the problem, unfortunately. As an overdraft is not a formal method of borrowing, basically if your salary is not being paid into the bank account that is overdrawn (even if you were in limit) the bank usually decide to call in the overdraft so because you were on a dmp, they decided sod this and defaulted you. They are entitled to terminate the account whenever they want, as it is not a traditional form of credit, and is CCA exempt. Think utilities such as a mobile phone, your gas or electric... its the same as those so they will default you and terminate the account - no exceptions.

Basically i'm saying they acted accordingly with the terms of short-term unsecured borrowing such as a personal reserve or overdraft - in a nutshell you're screwed. (s.87 CCA1974 is not applicable here - don't forget that)...

When I viewed my credit file I noticed that Barclays had placed a default on my account. I was since advised by Experian to place a notice of correction on my credit file to let potential creditors know the circumstances of the Default (however, do question its validity due to the fact that they did not supply me with a default notice). Additionally, it seems that the grounds for a default are rather unfair.

I wouldn't bother with the NOC as it actually worsens things for you - I recently wrote about this so instead of copying, i'll post the link to the thread ---> allaboutFORUMS - View Single Post - F F Settlement Offer Accepted - what next?

How much do you think the above might impact on my chances of obtainign credit in the future (e.g. my mortgage is up for renewal)? Do you think it is worth trying to get the defualt removed? Also, is it a good idea to have a notice of correction on my account?

The rest of my creditors have accepted my DMP and are showing my payments as on time with the exception of Cahoot credit card (£1500) who are showing that I am making a part payment each month.

It will affect you no doubt but if you can sit tight for a couple of years and maintain all payments on your other liabilities it will be easy to dispute, ie if you apply for credit and get declined you may be able to appeal it. However it will affect most mortgages for the next 4-5 years, sorry to say. Unless you have a low LTV of course...

I hope that this makes sense. I am extremely grateful for you taking the time and effort to read this email.

Sorry it's not better news, but basically you need to accept it and if anything try appealing to Barclays if you can settle the balance - in exchange for default removal - they may take you up on it if you act daft, I can help with that if you decide to take that option.....

[kilasuit]

Re: Help with Barclays Overdraft Default!

I'm gonna ask did you a termination notice?

And Niddy why is an overdraft CCA exempt it's still a form of credit.

[kitkat]

Re: Help with Barclays Overdraft Default!

Thank you for replying so quickly Niddy!

I had anticipated that this would be the case. :-(
I called Barclays this morning to discuss the default with them and they advised me that a bank is unable to remove a default once it has been placed on an account unless it has been placed in error (i.e as a result of fraud etc).
I explained the situation and pointed out that I was payong above what the CCCS has recommended that I was clearing the interest free overdraft at a much quicker rate that I would have done had I not entered the DMP. I also highlighted the fact that I had not entered arrears with any of my creditors. Instead I had acted proactively as I had overcommited on credit (for various reasons) and due to increasing interest rates on other loans I knew I would be unable to keep up my payments. The barclays rep advised me that it was Barclays policy to close accounts once the holder was in financial difficulty (i.e. on a DMP) regardless of the offer of repayment. Once an account is closed they mark it as defualted.

I also asked if I cound enter a deal with Barclays and pay the oustanding balance of the overdraft in return for a removal of the defualt. He reiterated that banks cannot remove defualts unless they were entered in error but said that he could off me a 20% discount off the balance of the O/D if I paid back in full today. I told him I would need to consider my options.

Is it worth trying to appeal this decision higher up? I have heard examples of people writing sympathy letters to the CEO and being successful. Is it even worth bothering? It feels that I have been penalised by Barclays for attemopting to act responsibly and sensibly to manage my finances and they blanket rule is you enter a DMP and have an overdraft = you default.Is this typical practice? Do other banks enforce the same methods?

Also, do you think it is a good idea to pay back the offer of the reduced outstanding balance? I think if I can manage to pull together the funds for that I would prefer to pay back another one of my creditors who continue to charge interest (albeit minimal) on my account.

Thanks again for your help and advice. Also thanks to all the other posters. Just reading through the other posts is such a source of comfort and reassurance and I can imagine has been and will be literally life saving for many people.

Best wishes

[kitkat]

Re: Help with Barclays Overdraft Default!

I'm gonna ask did you a termination notice?

And Niddy why is an overdraft CCA exempt it's still a form of credit.

Hi Kilasuit, yes I did recieve a termination notice but not a notice of a default. I am not sure if they are the same thing or not. My understanding is that they are slightly different. I did not know that the account had defaulted until I viewed my credit file. However, it sounds like it is irrelevant as overdrafts are exempt from CCA as they are a different type of borrowing.

[kilasuit]

Re: Help with Barclays Overdraft Default!

Well at least you received a termination notice.

Personally i would write to the CEO and point out that not only is it unethical to add a default without a default notice but still argue the fact that the CCA suggests use of a default notice before a default is placed with the CRA's.

And i know this is a very thin argument but you could argue that a default is unable to be placed with any CRA as it isn't a true reflection of the account running due to you still paying more than their requested minimum and also that of the CCCS's suggested minimum.

Bear in mind banks will willy-nilly default people. Even where a default isn't actually suitable to be placed.

I am currently arguing this with LloydsTSB but i'm also arguing that their level of charges (placed on top of each other) led me into a spiral that i couldn't break out of and that their recover teams acted inappropriately and unprofessionally.

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

I'm gonna ask did you a termination notice?

And Niddy why is an overdraft CCA exempt it's still a form of credit.

No it's same as mobile phones etc. It's a serviceable utility. NOT running or fixed term.

It's cca exempt. Simples.

[kilasuit]

Re: Help with Barclays Overdraft Default!

This is the dilemma i have with your answer Niddy

Overdraft is a form of credit therefore CCA applies As stated in this link http://www.justanswer.com/uk-law/2vv...eed-issue.html

And also here
http://www.oft.gov.uk/shared_oft/bus...dit/oft140.pdf

So my arguement that a DN is needed still stands.

As does the arguement that the banks are yet again trying to find any way to get out of following their legal responsabilities.

However if you can disprove me please provide some links or extract that support what your saying.

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

Oft part 3 - exemptions.

Regards to DN you're missing my point. They will not remove it, no matter what. They do not have to send a DN as a DN is part s87 & s88 cca 1974 so only relevant to regulated products. However, LEGALLY in order to claim monies owing in full they must first give notice and then they can close/demand repayment. This is to do with lending standards and banking code.

Please mate, stop reading cca related articles as its confusing things. This is nada to do with cca1974 in respect of the servicing of the account and regulation.

Mobile phones, gas an electric are credit too. Are they cca regulated?

[kilasuit]

Re: Help with Barclays Overdraft Default!

And s74 of CCA 1974 only states that Overdrafts are exempt from Part V of the CCA (except s56)

And CCA 2006 has no mention.


This seems like yet another bank driven "loophole" which i care not to believe

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

Overdraft is a form of credit therefore CCA applies As stated in this link http://www.justanswer.com/uk-law/2vv...eed-issue.html

No mate, it's a form of "On-Demand" borrowing, informally between you and the bank - nothing is legal about it in that respect.... how can they default notice you, when thats part of CCA?

Ok, lets say you lend me £1k, I don't pay you back - what you gonna do? Thats the same as the banks really..... take me to court, or write it off. However as the banks have access to CRA's they use them, as you don't - i'd get away with a default if you lent me the money....

Make sense yet?

Worse still, you felty the need to query me over "Just Answer" - shame!

[kilasuit]

Re: Help with Barclays Overdraft Default!

It is only informal when there is no "formal" arrangement made

This would still be regulated in full by the CCA 1974 other than part V which only says that there needs be no written agreement.

Thou all terms should be easily accessible and provided when Arrangement is made or varied.

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

Ok, read the following (section 74 (1)(b) of the Consumer Credit Act 1974)

---> Consumer Credit Act 1974

(1)This Part (except section 56) does not apply to—

(b)a debtor-creditor agreement enabling the debtor to overdraw on a current account.

= Exempt from CCA1974...

Niddy over & out!

[kilasuit]

Re: Help with Barclays Overdraft Default!

And s74 of CCA 1974 only states that Overdrafts are exempt from Part V of the CCA (except s56)

As stated above just Part V of CCA

the rest still stands

As is my understanding
Thats the point i've been trying to put across

[Never-In-Doubt]

Re: Help with Barclays Overdraft Default!

Now look at s16 (exemptions). Mate the cca (as all legislation) is formed in parts and statute instruments. Please read it all and not cherry pick parts that appeal to you.

An overdraft is exempt from the cca. Nowhere on any formal overdraft will the words cca appear. Nowhere, wonder why?