VT, excess mileage and Defaults on your credit file

[pt2537]

There has been a recent Court decision on whether creditors can charge excess mileage. As predicted, the Court found for the consumer.

I did a BBC interview while i was at Howlett Clarke https://www.bbc.co.uk/programmes/b09nqnxd where i set out my views on the scenario, however at that time there had not been to my knowledge any court judgments on this issue. While i accept the Court ruling we have is a County Court ruling and thus not binding, it is persuasive and it seems to me to be correctly determined.

So based on this, if a creditor puts a Default on your credit file for Excess Mileage, then this Default could possibly be challenged in Court (or out of Court if the bank wants to settle quick)

The basis for such a challenge can be found in Grace v Blackhorse, the argument is not the easiest but it is in effect that

1) the charges are not enforceable
2) as they are not enforceable, you shouldnt have to pay
3) therefore any default on your credit file is based on an unenforceable charge
4) if the credit file reports "Default" and nothing else, then per Grace it may be inaccurate

And possibly damages may well flow from the above under DPA or under the Durkin ruling on the basis of negligence

[R0b]

Good post Paul,

I would point out that in relation to 4) my experience on here is that lenders are not actually filing defaults on credit files they are instead issuing late payments in lieu of default markers (im looking at Barclays Finance and possibly Black Horse).

This makes the argument somewhat difficult because there is no guidance that I have found to date which deals with how late payment markers should be applied.

The latest guidance from SCOR on reporting arrears and defaults does not mention anything about when late payments should or shouldn't be reported. It does say however that defaults should not be applied where the sum is made up entirely of fees or charges.

In my view (rightly or wrongly) late payment markers are a precursor to filing a default and if defaults should not report outstanding monies made up of fees or charges then that principle should also apply to late payment markers. This is because, if 3 or more late payment markers are issued and a default is then recorded, as soon as the default marker is filed, the lender would automatically breach the guidance. It's a simple case of logic here.

Even with all that said, only reporting charges as a late payment or default is misleading and gives the wrong impression that you are behind on your credit repayments, which of course is the purpose of your credit report - for lenders to determine whether you are likely make the repayments. Fees and charges alone (particularly if disputed) does not, and should not, accurately represent that one is not able to repay their instalments especially where in cases such as voluntary termination, we know that all repayments have usually been made.