BMW Financial Services - Voluntary Termination/Excess Mileage

[R0b]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Morning,

Having read your post properly [MENTION=108251]KurtCrisco[/MENTION], it seems as if the case officer is taking a restrictive view, if not literal of the 2016 guidance. We must all remember that the guidance is just that and is not binding in law and it does not cover every intended consequence of unfairly or unlawfully processing someone's personal data.

I am rather surprised given that the case officer conceded that if BMW had issued a default then it would qualify as unfair processing but refuses to accept that recording sums made up of fees or charges as late or something else is not unfair processing. It seems to me that all roads lead to the same conclusion which is that the recording of outstanding fees or charges is unfair and/or unlawful processing.

If BMW were to continue recording the charges each month it would eventually lead to a default (8 missed payments is it? or 6?), thus considered unfair. If BMW also record the charges but then start changing the code for so it does not flag up as a default, that is also unfair and an abuse of the system. Equally, if they continue to record the charges as missed consecutively each month but then stop short of 1 month to avoid it being recorded as a default, that also in my mind would be an abuse of the system and also unfair processing.

Then there is also the argument that recorded the charges as missed payments is inaccurate because the charges do not form any part of the credit agreement and so it is giving the effect that you have missed a number of payments under the agreement, but in fact the agreement was actually terminated some time ago. The whole purpose of having a credit file and the credit reference agencies retaining your information is to allow lenders to make a decision on how likely you are going to be able to make the repayments if they offered you credit. In my view it is inherently wrong to report sums made up solely of fees or charges as it gives the wrong impression to the lender and suggests that you are unlikely to meet your monthly instalments - particularly if you have several months reported as missed under a agreement. The result is that the lender is either going to reject your application for credit or offer you credit but at a much higher interest rate than one might expect if those missed payments were not recorded.

Going back to the case officer's view, I think he needs to take a pragmatic view of this. If a lender should not be recording a default for fees or charges, then the pragmatic and logical view is that it should also not record fees or charges as missed payments. In terms of your options, I think you've pretty much exhausted all options except for issuing legal proceedings.

I am not sure if you have a telephone contact for the case officer but perhaps you may want to speak to him again and re-iterate some of the points made here and try to get him to answer your questions or provide an explanation. If he declines to answer or explain some or all of your questions then ask for him to provide his assessment in writing so you have evidence of his decision. At that point you could take it further and perhaps write to Elizabeth Denham who is the Information Commissioner and explain that you feel the assessment made by the case offer (and insert their name if you know) has made a fundamental error which is having a detrimental effect to yourself and perhaps ask for a review by someone more senior who is able to see outside of the four corners of the SCOR document. Of course don't expect to receive a response from her, maybe one of her team or maybe no response at all but you can at least give it a go and see what happens.

If not, then the last step is legal proceedings. If you do intend to go down this route then it is possible to claim at least £750 compensation based on previous case law but as BMW have refused to remove the recordings from your credit file then it is further aggravated matters and you could seek something a bit higher than that, perhaps up to £1,500 maybe more but it is a bit of a guess and depending on how much your claiming will determine how much you pay for application fees. Anything under £10,000 will likely result in the small claims track which means costs are extremely limited, though there is a possibility BMW may argue for it to be moved to another track where legal costs could be recoverable but I would think this is a very straightforward, non-complex matter which can be decided under the small claims track.

You ought to be aware that if you do choose to bring a claim, there is a possibility that BMW may counterclaim for the outstanding sums that they think is owed, and which you will need to put in a defence and/or argue that those sums being claim should be offset by the compensation you seek to claim. Always a risk in going to court, and nobody I know has decided to have the balls to take on BMW yet or any other lender in relation to this type of scenario so you are leaving it in the hands of a judge who may or may not agree with you but that is a decision you will need to consider and take yourself in the knowledge of potential risks that may be involved.

[Dehaw]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

[MENTION=71570]R0b[/MENTION] would you then agree that BMW is in the wrong in the first instance for keeping the credit file open and merely reducing the costs associated with the agreement since the agreement was terminated?

I argued that the invoices were a different matter from the said agreement and that what's held on the credit file should be a zero balance since the agreement was terminated, although they then scrambled around and sent over screenshots showing that my credit file was showing that the agreement was VT'd but the balance still shows as £4.4K meaning it looks as if I have not paid for the agreement in full but according to the CCA that should be zero and the invoices a separate matter?

[R0b]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

@R0b would you then agree that BMW is in the wrong in the first instance for keeping the credit file open and merely reducing the costs associated with the agreement since the agreement was terminated?

I argued that the invoices were a different matter from the said agreement and that what's held on the credit file should be a zero balance since the agreement was terminated, although they then scrambled around and sent over screenshots showing that my credit file was showing that the agreement was VT'd but the balance still shows as £4.4K meaning it looks as if I have not paid for the agreement in full but according to the CCA that should be zero and the invoices a separate matter?

If they are solely fees or charges then yes, I think that would be an arguable point to make. Like I said, above, a lender determining whether they should offer you credit will get the impression that either the agreement is still alive or that you've failed to make the credit repayments. This is why I can only assume the SCOR guidance says that defaults should not be applied in respect of charges or fees if they do not form part of the credit loaned to you.

Going back to the 2007 guidance, it makes a specific reference to unresolved disputes and goes on to say that if there is a genuine, reasonable and unresolved dispute then the ICO is likely to find that personal data has been processed unfairly if a default has been filed. It also says that a default reported in that way may also be inadequate for the purpose of credit referencing because it does not provide any meaningful information about the creditworthiness of the customer. This section has been removed in subsequent revisions of the guidance without any understanding as to why but should nonetheless be persuasive as it appears to confirm my views that the data recorded is not accurate and/or misleading and ought to be applicable in circumstances relating to charges or fees.

[kreig]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Morning,


If BMW were to continue recording the charges each month it would eventually lead to a default (8 missed payments is it? or 6?), thus considered unfair. If BMW also record the charges but then start changing the code for so it does not flag up as a default, that is also unfair and an abuse of the system. Equally, if they continue to record the charges as missed consecutively each month but then stop short of 1 month to avoid it being recorded as a default, that also in my mind would be an abuse of the system and also unfair processing.

.

Rob, that is exactly what they do. I am well over 6 and have sent KurtCristo a copy of my credit report so he can see what will happen.

They just change the code so it never becomes a full default.

[stuckcluckets]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Thanks for posting R0b, I hope you had a good break over the new year period.

I completely agree with your comments r.e. the ICO's views. They're contradictory and unclear. I still haven't heard back from my case officer since our phone call the other day (despite my asking them to email me their findings so that I have these in writing), so I've just sent the following today:

As I have not heard back from you since our telephone conversation the other day with a summary of your views/findings (as I requested), I wanted to send you an email to follow up.

It is my feeling that you are taking a restrictive, if not literal, view of the 2016 SCOR Guidance in relation to my complaint. It is important to remember that the 2016 SCOR Guidance is titled as such because it is just that: a guide. Therefore, it DOES NOT cover every possible scenario of an organisation unfairly or unlawfully processing someone’s personal data. You have already conceded that, if BMW Financial Services were to issue a default notice to CRAs in my scenario, this WOULD QUALIFY as unfair processing. However, you refuse to confirm/accept that the recording of sums made up solely of fees or charges in the form of a late/missed payment note (or any other credit file entry) as an alternative to issuing a default notice DOES NOT constitute unfair processing.
Since the former is true (verified within the 2016 SCOR Guidance), you should have no trouble in confirming/agreeing with the latter. Your refusal to confirm/accept the latter is a contradiction, and as such it appears that all avenues lead to exactly the same conclusion - that the recording of sums made up solely of fees or charges to CRAs (regardless of the way in which they are reported) qualifies as unfair and/or unlawful processing of personal data in accordance with the Data Protection Act.


Allow me to elaborate. Normally, a lender would issue a default notice after between 3 - 6 missed payments on an account. Let’s say BMW Financial Services had done this in my scenario - they issue a default notice, and as you have confirmed, this would be without question considered unfair and/or unlawful processing of my personal data. This suggests that BMW Financial Services’ choice to continue submitting missed/late payment entries to CRAs, for example by changing the CAIS code for each monthly entry in order to deliberately avoid having to submit a default notice, must also be considered unfair and/or unlawful processing of my personal data (if not also an abuse of the credit reference system).


Additionally, the fees/charges that BMW Financial Services allege are owed do not make up any part of the original credit agreement/credit account. Therefore, their choice to submit missed/late payment entries to CRAs as a part of the original credit agreement/credit account qualifies as inaccurate and/or unlawful processing of my personal data (in accordance with the Data Protection Act). Their doing so has been detrimental to me personally. By recording inaccurate missed/late payment entries to CRAs about a credit agreement/credit account that has in fact been closed, BMW Financial Services are suggesting/implying to other lenders that I would be unlikely to keep up my repayments/instalments if they were to offer me credit. The result is that other lenders have either refused me credit, or drastically increased the rates of interest offered, based on the totally unfounded suggestions/implications made by BMW Financial Services. Not only is this a complete defamation of my character, it is slanderous. The Data Protection Act (that which the ICO is supposed to regulate) is designed to protect consumers by preventing organisations from submitting inaccurate personal data into the public domain - BMW Financial Services are doing exactly that in my scenario, and are therefore in breach of the Data Protection Act. When asked by myself, you stated that the submitting of inaccurate personal data into the public domain was not something the ICO can assist with, but you refused to explain why this was the case.


In summary, you need to take a more pragmatic approach towards my complaint:
- If a lender should not be recording a default for sums made up solely of fees or charges (an admission made by yourself, and confirmed in the 2016 SCOR Guidance), then the pragmatic and logical view is that the lender should also not be recording missed/late payment entries for sums made up solely of fees or charges.
- If a lender is recording inaccurate personal data about an individual with CRAs and this is negatively affecting that individual’s personal circumstances, the pragmatic and logical view is that this should be considered defaming, and a breach of the Data Protection Act equal to any other.


With the above considered, I would like to request that you please answer the following questions (in writing) to help clarify your findings as well the ICO’s official position in response to my complaint:
1. What is the ICO’s/your official definition of a “default notice”?
2. According to the ICO, under what circumstances/criteria SHOULD a lender be recording a default notice to CRAs?
3. According to the ICO, under what circumstances/criteria SHOULD a lender NOT record a default notice to CRAs?
4. Can the ICO/you confirm that a default notice recorded for sums made up solely of fees or charges would qualify as unfair and/or unlawful processing of personal data?
5. According to the ICO, are missed/late payment entries recorded for sums made up up solely of fees or charges considered as unfair and/or unlawful processing of personal data, or not?
6. Why is the ICO/are you REFUSING to explain why the submitting of inaccurate personal data into the public domain (that is having a detrimental effect on my personal circumstances) is something that the ICO cannot assist with in my scenario, despite the ICO dealing with this issue on a daily basis in relation to other scenarios?


Furthermore, I would like to request that my complaint/case be passed onto/reviewed by a more senior case officer in addition to yourself. You have already admitted that your earlier findings were inaccurate due to you misquoting/misunderstanding the 2016 SCOR Guidance (proof of which I have via email), and as such, I am concerned that your more recent findings are equally inaccurate. With all due respect, I am concerned that you are unable to review my complaint/case with the level of legal competency (in relation to the Data Protection Act) that it requires.


I will expect a response from you before close of business hours tomorrow (5pm, Friday 5th January 2018). If I do not receive this, then I will seek to contact an alternative case officer myself.

I want to see if I can have my complaint reviewed by a case officer who wasn't born yesterday, to be frank.

When I have a little more time tomorrow, I'll contact BMW direct (by which I mean BMW themselves, not my local dealership) to apply pressure from this direction also.

If all else fails, then as you say, court is the next option. We'll cross this bridge if/when we come to it though.

[Kellycat]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Rather late to the party as I only recently picked up this tread, but I have seen many others with a response from R0b regarding VT. Thank you ROb for your assistance and patience with us all.


I am in a similar position to many others here with BMW FS who have placed an outstanding amount on my Experian file of £720, although the amount they invoiced me for was £719.84.


I appreciate that the amount they are claiming is not a great as others here - my BMW had covered 31,000 miles in 36 months which I do not think is excessive fair wear and tear, and I have downloaded the sales particulars for the actual car and comparable vehicles with varying mileages from the BMW Used car website which clearly indicates that the milage had no effect on value - in my case of course.


I have actually paid £99.60 at the beginning of December 2017 as this was the estimate that their inspector gave me for repair to a damaged wheel and a small dent, and I was more than willing to accept this it was outside the BVRLA guidelines but BMW FS said they will ignore this and will not invoice me for it!.


Therefore irrespective of the rights and wrongs, the figures shown on my file are inaccurate as to amount and delay.


I have previously invited BMW FS to take me to Court for the outstanding amount, which they have not done of course.


I have not contacted either the FO or ICO and in view of KurtCriscos excellent work and feedback here I do not see any mileage in it at present unless they were to come out with a definite ruling (pardon the pun)


I have today composed a letter to Sara Dawes who is listed as The Data Protection Officer for BMW FS advising her of the errors on my Experian record and inviting her to remove the alleged outstanding amount and correct the error of her ways and confirm this within 21 days of the date of the letter (which I will post by recorded deliver tomorrow). If she decides not to do this I have said I will commence Court proceedings.


Regrettably this is not the first time I have had to go through this for justice although not in respect of this matter (dodgy builders!) and I do have some experience of attending Court though my work.


I have however offered to make a Without Prejudice payment of an additional £150.00 on acknowledgement from her that my record has been amended (not just a promise); this will be about 30% of the whole they are claiming if added to the £99.60 that I have already paid.


As an aside, when I initially VT’d t was to buy a new BMW as the one in dispute was no longer suitable for my needs and they have been happy to give me 0% finance for the whole value of the car on a 4 year PCP, although that was before this all kicked off.

[kreig]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Rather late to the party as I only recently picked up this tread, but I have seen many others with a response from R0b regarding VT. Thank you ROb for your assistance and patience with us all.


I am in a similar position to many others here with BMW FS who have placed an outstanding amount on my Experian file of £720, although the amount they invoiced me for was £719.84.


I appreciate that the amount they are claiming is not a great as others here - my BMW had covered 31,000 miles in 36 months which I do not think is excessive fair wear and tear, and I have downloaded the sales particulars for the actual car and comparable vehicles with varying mileages from the BMW Used car website which clearly indicates that the milage had no effect on value - in my case of course.


I have actually paid £99.60 at the beginning of December 2017 as this was the estimate that their inspector gave me for repair to a damaged wheel and a small dent, and I was more than willing to accept this it was outside the BVRLA guidelines but BMW FS said they will ignore this and will not invoice me for it!.


Therefore irrespective of the rights and wrongs, the figures shown on my file are inaccurate as to amount and delay.


I have previously invited BMW FS to take me to Court for the outstanding amount, which they have not done of course.


I have not contacted either the FO or ICO and in view of KurtCriscos excellent work and feedback here I do not see any mileage in it at present unless they were to come out with a definite ruling (pardon the pun)


I have today composed a letter to Sara Dawes who is listed as The Data Protection Officer for BMW FS advising her of the errors on my Experian record and inviting her to remove the alleged outstanding amount and correct the error of her ways and confirm this within 21 days of the date of the letter (which I will post by recorded deliver tomorrow). If she decides not to do this I have said I will commence Court proceedings.


Regrettably this is not the first time I have had to go through this for justice although not in respect of this matter (dodgy builders!) and I do have some experience of attending Court though my work.


I have however offered to make a Without Prejudice payment of an additional £150.00 on acknowledgement from her that my record has been amended (not just a promise); this will be about 30% of the whole they are claiming if added to the £99.60 that I have already paid.


As an aside, when I initially VT’d t was to buy a new BMW as the one in dispute was no longer suitable for my needs and they have been happy to give me 0% finance for the whole value of the car on a 4 year PCP, although that was before this all kicked off.

Not about the amount, mine is even smaller.

Interested to hear if your Without Predjudice offer is accepted as when the FO come back to me, I am likely to take this route.

[Phaeton]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Sitting from the outside looking in, would it not be better for everybody to contact BMWFS individually, the more people complain the higher profile their incorrect practise will become within the ICO?

[kreig]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

I requested further clarification from Experian on this issue and had the following reply:
"I understand that you would like further clarification about the status of the BMW account, detailed above.
I can confirm that the BMW account has not been recorded as a defaulted account by the lender.
The account currently has a delinquent status and is showing as an active account. If BMW had closed the account, a settlement date would show and the balance would show as £0.

When an account has been three or more months in arrears on consecutive occasions, some lenders consider it to be 'delinquent'. This 'delinquency' will date from when the account was most recently three or more months in arrears. Banks may take the outstanding balance into consideration at the time of the 'delinquency' even though the account may now be up to date or even settled."

[kreig]

Re: BMW Financial Services - Voluntary Termination/Excess Mileage

Ok, so spookly enough the FO also got back to me today, but they are not upholding my complaint.

The way they see it is BMW have not filed a full default, that would be a breach as not giving me proper notice etc
They have read through the original contract and they believe the excess mileage charges are due as stated in the original agreement.
BMW don't have to go to a full default if they do not wish to, and it actually does less damage to my credit rating in its current form.

[stuckcluckets]

Apologies for going quiet recently folks, had a couple of very busy weeks with work.

But good things come to those who wait, and boy, do I have some tasty updates for you all!

UPDATE 1

I received a response from my case officer at the ICO to the last email I sent - the one mentioned above whereby I very clearly and concisely ask them to answer 6 questions that might address the totally contradictory information they've provided me with and ask for my case to be reviewed by an alternative case officer. When I sent this email, I knew that the ICO probably wouldn't be able to answer my questions without further contradicting themselves, and that's exactly what I was hoping they'd do in order to reinforce the points I've made.

Their response read as follows:

I am writing further to your correspondence about BMW Financial Services (GB) Limited.

I note from your correspondence that you are unhappy with the handling and outcome of your case.

The matters you have raised will be passed to a manager who will review your case and respond within 30 days. If the manager is unable to send a full response within that timeframe, they will let you know what is happening and when you will receive a full response.

You will notice that there are two reference numbers at the top of this page. ######## relates to the complaint you sent us about BMW Financial Services. ######## is a new reference number, which relates to the way we have handled that case.

Yours sincerely

I thought they'd at least try and answer my questions, but instead, they completely ignored them! They'd also attached a document to their email detailing the escalation process. Included in this document were a few lines about how once the review of my case was completed, it would be marked as closed with the ICO. Understandably, I didn't particularly like/appreciate these statements, especially since they contradicted the information my case officer had given me over the phone previously about the closure of a case with the ICO.
Their avoidance of my questions seemed deliberate to me. I expect my case officer was struggling to provide any firm answers that aren't contradictory, as I suspected, and as such, they'd hoped that sending me an email of this nature would send me chasing one of their colleagues as opposed to continuing to chase them. In other words, I think my case officer took my previous request to have my case reviewed by another case officer as a "get out of jail free card". My my, how little they know about me.

Needless to say, I responded, but not just to the new case officer using the new case reference number, I responded using both. Essentially, I now have two cases open with the ICO, both of which I will continue to send all future correspondence to. The more ways that I can apply pressure, the better.
I wasn't prepared to let my former case officer off the hook that easily, as I have a right to have my questions answered, so my response read as follows:

Thank you for escalating my complaint, though I am concerned you have misunderstood my previous email.

Firstly, yes, I am somewhat unhappy with the handling of my case, but I DO NOT wish for it to be closed until the points/questions raised in my previous email have been answered in writing by the ICO as per the request I made in my previous email. This is of VITAL IMPORTANCE.
I asked for my original complaint to be reviewed by another case officer, that is all. The attached file that you have sent me suggests that my complaint will be reviewed and then closed, regardless of whether or not I am able to obtain any more evidence relevant to my original complaint. During our last telephone conversation, you informed me that my original complaint would be marked as closed, BUT, if I were to submit any further information with the correct case reference it would automatically be reopened. Does your email below mean to say that this is no longer the case?
To be honest, I now feel as though the ICO is attempting to pass my complaint off and mark it as closed as quickly as possible, to avoid answering the questions raised in my last email.

Furthermore, I note that you have only addressed my request to have my original complaint reviewed by another case officer, but have not addressed any of the key points/questions raised in my last email. In the meantime (whilst my complaint is escalated), could you please answer the points/questions I raised? To reiterate from the beginning of this email, it is of VITAL IMPORTANCE that these points/questions are answered. There is no reason whatsoever as to why the ICO would not be able to answer these.

For your reference, I quote the points/questions from my previous email:

"I would like to request that you please answer the following questions (in writing) to help clarify your findings as well the ICO’s official position in response to my complaint:
1. What is the ICO’s/your official definition of a “default notice”?
2. According to the ICO, under what circumstances/criteria SHOULD a lender be recording a default notice to CRAs?
3. According to the ICO, under what circumstances/criteria SHOULD a lender NOT record a default notice to CRAs?
4. Can the ICO/you confirm that a default notice recorded for sums made up solely of fees or charges would qualify as unfair and/or unlawful processing of personal data?
5. According to the ICO, are missed/late payment entries recorded for sums made up up solely of fees or charges considered as unfair and/or unlawful processing of personal data, or not?
6. Why is the ICO/are you REFUSING to explain why the submitting of inaccurate personal data into the public domain (that is having a detrimental effect on my personal circumstances) is something that the ICO cannot assist with in my scenario, despite the ICO dealing with this issue on a daily basis in relation to other scenarios?"

I look forward to hearing back from you.

UPDATE 2

Believe it or not, my original case officer actually came back to me. They chose not to answer my original questions still, but instead, created their own list of 3 questions and then provided answers to those. I suppose this is the closest they felt they could get to answering my questions without further contradicting themselves. Their response read as follows:

I write in response to your request for an explanation of the ICO's view of defaults on credit files.

As agreed in our telephone conversation on ## January 2018, I provide below answers to the three questions you asked us to answer.

1. Why is what BMW are doing not a default?

According to the most up to date credit report you have sent us (dated ## December 2017), BMW has reported four late payments for the balance they invoiced you for on ## July 2017.

Given that BMW’s invoice gave you 7 days in which to pay the requested balance, your apparent failure to do so means that their reporting of the first late payment on ## September was an accurate reflection of the situation at that point. They have subsequently reported three further late payments as of ## December. Again, in the absence of any payment from you this is appears to be an accurate reflection of the situation at that point.

As mentioned above, as of ## December BMW had reported four late payments. We would not consider the absence of default to be potentially unfair until after six late payments have been reported.

1. What constitutes a default?

A default normally occurs when the terms of a credit agreement have not been met and the account is three to six months in arrears.

I should point out here that based on the information you have provided to us your BMW credit agreement includes liability for pro-rated excess mileage charges.

1. What would the ICO do if there was an incorrect default?

When we receive data protection complaints our obligation is to make an assessment. An assessment is the ICO’s view as to whether an organisation has complied with the requirements of the Data Protection Act 1998 (the “DPA”). We do this by saying whether we believe it is likely or unlikely that the organisation has complied with the DPA.

Our aim is to ensure that organisations deal with personal information properly. Our assessment decisions can help us to advise organisations on how to comply with the DPA going forward and decide whether we should take formal regulatory action against a particular organisation.

In most cases we would view a failure to register a default after six late or missed payments as unfair to the individual concerned, as delays in reporting defaults effectively push the date a default would disappear from a credit file further into the future.

It is likely in this scenario that we would make an adverse compliance assessment based on the organisation’s failure to meet its obligations under the fourth data protection principle. We would then ask them to address the inaccuracy by registering a default.

I trust this answers your queries. Please note that as you have requested a review of your case any further questions or concerns you may have will be addressed in the case review. Therefore if you have further queries please address them to us quoting your review reference number ########

So the bad news was that their response failed to address my original questions yet again and that the vast majority of it was yet more contradictory rubbish. The good news, however, was that my case officer had finally confirmed the following:
- That a default should realistically be recorded after 3 - 6 missed/late payment records
- That the ICO would likely regard a failure/refusal to record a default after 3 - 6 missed/late payment records as an "unfair absence of a default", since delaying its recording pushes back the date on which an individual would see the debt cleared from their credit history (recorded debts/defaulted accounts drop from a person's credit file after 6 years)
- That if the ICO were to deem a lender's actions as an "unfair absence of a default", they would force them to issue a default as required under the DPA (Data Protection Act)

Bingo.

The ICO had admitted that they would be forced to request a lender to issue a default if that lender had failed to do so after 3 - 6 missed/late payment recordings. This is exactly the sort of scenario that I am in myself of course, as well as many of you following this thread.
However, based on earlier conversations had with my case officer about it being a breach of the DPA (Data Protection Act) for a lender to issue a default notice for sums solely made up of fees or charges, there's one question that still needs to be answered...

How do/how can the ICO force a lender to record a default notice that breaches the very legislation they regulate?

The way I see it, there's no way of the ICO handling this scenario:
- If they force the lender to record a default notice for a sum that's solely made up of fees or charges, they're requesting that a lender breaches the DPA (Data Protection Act). They can't ask a lender to do that. Even if somehow they deemed it acceptable to do so, they'd have to request that the lender immediately removes the default and records the account as closed/satisfied (thus removing all past missed/late payment entries).
- If they tell the lender not to record a default, they couldn't allow the lender to continue adding missed/late payment entries as this would qualify as an "unfair absence of a default". Therefore, they'd have to request that the lender removes all past missed/late payment entries and records the account as being closed/satisfied.

The fact is, the ICO are at the mercy of a dreadful loophole in the DPA (Data Protection Act) guidance. What's good about this for us is that regardless of which way they approach said loophole, the end conclusion is the same - in order to get the lenders in question to comply with the very legislation they regulate, they have to instruct them to remove the missed/late payment entries that they have recorded for us all and mark our accounts as closed/satisfied. The fact that the ICO would have to take this course of action implies that, regardless of how the ICO spin it, BMW Financial Services (and other car finance companies) ARE guilty of unfairly processing personal information.

This does, of course, raise the question of why/how are the ICO allowing the missed/late payment entries to be recorded in the first place, but this is where the loophole comes in - the ICO are clearly new to this loophole being present, and are therefore yet to come up with a way in which they can combat the likes of BMW Financial Services exploiting it.

I felt it was time to address the burning question and ask how the ICO were going to handle things, so my response read:

Thanks for coming back to me, and apologies for my response being delayed.

First and foremost, you still have not responded to the questions I asked you. It appears that you have created your own rather convoluted questions (based on my original 6), and then answered those instead in an attempt to try and avoid making the admission that there is clearly a loophole in the 2016 SCOR guidance that allows lenders to abuse the system through CRAs (Credit Reference Agencies) for their own gains - a loophole that enables lenders like BMW Financial Services to effectively bully and manipulate individuals into paying alleged fees/charges without ever having to prove that they are in fact owed at all.

That being said, I do appreciate you providing me with at least some further information. I would like to add some further points however:

1. In response to the question you created titled 'Why is what BMW are doing not a default?', you stated that the ICO…
"would not consider the absence of a default to be potentially unfair until after six late payments have been reported”
Your response implies that I am very much within my rights to reopen my complaint to the ICO once BMW Financial Services have reported 6 missed payments. Can you please confirm that this is the case, and that the ICO would reinvestigate things at this point?
For your reference, BMW Financial Services are still continuing to add late payment entries and recently reported a 5th (I have attached an updated copy of my Experian Credit Report), so we’re nearly at the point where the ICO would consider the absence of a default to be potentially unfair anyway. Surely it would make more sense for the ICO to just consider whether or not the information BMW Financial Services are reporting as a whole is inaccurate/unfair, rather than waiting for a 6th late payment to appear on my credit file, saving everyone yet more time and hassle? Or does that prospect fall within the remit of the 2016 SCOR guidance loophole that the ICO are refusing to admit/acknowledge?

2. In response to the question you created titled ‘What constitutes a default?’, you stated that…
"a default normally occurs when the terms of the agreement have not been met and the account is 3 - 6 months in arrears”
As explained above, we’re almost at the point where BMW Financial Services report a 6th late payment. With regard to your comment about my liability; a lender can write a clause for anything they so choose into a contract, but that doesn’t make it fair/appropriate. Regardless of what the lender’s contract says, the Consumer Credit Act confirms that my liability is limited to 50% of the total loaned amount and nothing more since the agreement was ended via way of voluntary termination. Where there is a dispute between the terms of a contract and common law, common law prevails.

3. With all due respect, your response to the question you created titled ‘What would the ICO do if there was an incorrect default?’ makes no sense whatsoever. You stated in your response that…
"In most cases we would view a failure to register a default after six late or missed payments as unfair to the individual concerned”
You also stated that…
"It is likely in this scenario that we would make an adverse compliance assessment based on the organisation’s failure to meet its obligations under the fourth data protection principle. We would then ask them to address the inaccuracy by registering a default.”
Your response does not even answer your own question, and it’s more confusing than it is helpful. You’ve elaborated on something you already mentioned earlier in your email, and explained that if (or in this case, when) BMW Financial Services report a 6th late payment, the ICO would ask them to address the inaccuracy and issue a default notice. By requesting that BMW Financial Services issue a default notice in this particular scenario (whereby the alleged sums outstanding are made up solely of fees or charges), the ICO would effectively be requesting that they issue a default notice that breaches the terms outlined in 2016 SCOR guidance (terms which we have discussed in our previous emails).

So once that 6 or more late payments have been recorded, surely the ICO would not/could not advise a lender to issue a default that breaches the terms of the very legislation that they regulate (as in this instance, the alleged sums outstanding are made up solely of fees or charges), so what does the ICO do instead? As per your own admission, the ICO would regard the lender continuing to record late payments as an unfair absence of a default, so they can’t allow that. The only option the ICO is then left with is to finally request that the lender removes the late payments they have recorded, but in that case, how does the ICO then explain why they allowed the late payments to ever be recorded in the first place, since they negatively affected that individual’s perceived credit worthiness?

Since I don’t seem to be getting anywhere by continually asking you to answer the original 6 questions I sent you, and with the above considered, can you please answer the following questions for me instead?
- Why would, or could, the ICO request that a lender records a default notice despite the fact that it would relate to alleged sums made up solely of fees or charges, thus breaching the 2016 SCOR guidance?
- What would the ICO do in the event that they discovered that a default notice relating to alleged sums made up solely of fees or charges (a default notices that breaches the terms of the 2016 SCOR guidance) had been issued by a lender?
- In the event that the ICO could not request that a lender records a default notice after that lender had recorded 6 or more late payments (since the alleged sum outstanding is made up solely of fees or charges), would they request that the lender removes the 6 or more recorded late payments?
- Why does the ICO consider a default notice recorded for sums made up solely of fees or charges to be unfair, but does not consider late payments recorded for the same sums to be unfair?

You might be interested to know that BBC Radio 4 broadcasted a report on scenarios relating to voluntary termination of PCP car finance agreements as a part of their “Money Box” segment today, and that some interesting points were made about how lenders should not be recording anything whatsoever to an individual’s credit file in these scenarios. Sounds like the unlawful behaviour of lenders like BMW Financial Services is about to start hitting the news. Let’s hope that the ICO don’t get accused of not dealing with complaints relating to these scenarios correctly, and end up getting caught in the forthcoming.

I am aware that I have a new case reference number, and I will be submitting another copy of this email with that case reference mentioned.

I'm not proud to be able to say this, but I've really got them over a barrel here. We all have. They have to deal with this, there really isn't a way out, even less so that now that the media are starting to jump on the topic.


UPDATE 3

Just after I sent the above response to the ICO (I am still awaiting their reply), I received another letter from BMW Financial Services entitled "Notice of Sums in Arrears in relation to Agreement No: ########".

This isn't the first time I've received a letter like this, but whilst reading it, I had a thought. I wondered if the Collections Department (from whom the letter was sent more specifically) might be able to shed some light on why BMW Financial Services haven't issued the required default notice, so I sent them a letter. It read as follows:

Thank you for your letter. I note that BMW Financial Services have now reported 5 missed/late payments to Credit Reference Agencies (CRAs) in relation to the alleged sums outstanding but have not reported a default notice, despite their legal obligation to do so under the Data Protection Act (DPA).

I request that BMW Financial Services either report a default notice or explain why they have failed to do so.

I will look forward to your reply.

Within a day of sending this, I received a reply from the Collections Department. I wasn't disappointed...

Thank you for your email dated ## January of which your comments have been duly noted.

A Default Notice is required in the event of any breach under the terms and conditions whilst the agreement remains active. The Default Notice offers the customer an opportunity to remedy the breaches in order for the agreement to continue as normal. You exercised your right to Voluntary Terminate the agreement in June 2017. This means that you terminated the agreement with BMW Financial Services and returned the vehicle. As such, the agreement is no longer active and does not require a further Default Notice for Excess Mileage.

I can see from our records that you had raised a complaint regarding the Excess Mileage Charge which has been addressed by our Vehicle Logistics department and the Financial Ombudsman Service. As per their investigations, the charge remains due. It is not necessary for BMW Financial Services to impact your credit file further by applying a Default as it is not an accurate reflection of how your agreement ended. The charge became due on ## July 2017 and will incur late payment markers every 28 days of non-payment and until the full amount has been paid.

In addition, we are required under the Consumer Credit Act to write to you regularly and notify you that a balance remains outstanding. This is the purpose of the Notice of Sums in Arrears letters you are receiving. They are for your records only and do not require a response. Once the balance has been paid in full, your credit file will be updated to show a zero balance and these letters will cease.

I hope this information is sufficient for your purposes. If you would like to arrange payment or discuss a repayment plan, please contact us on 0370 5050 150 selecting options 5 and 3.

Our lines are open 9am – 5:15pm Monday – Friday.

Oh deary deary me BMW Financial Services. I think the game might well be up, what a silly email to send:
- They're claiming the agreement/account was closed, and that a default notice is not required. They haven't recorded it as being closed to CRAs (Credit Reference Agencies), and I have evidence to prove such. Whoops.
- They're creating their own definition of a default notice to fit their needs. I've had the definition of a default notice confirmed by the ICO, and it's not like BMW Financial Services claim.
- They're claiming that they will continue to add missed/late payment markers every 28 days until I "pay up". The ICO have already confirmed that this behaviour would qualify as an "unfair absence of a default".

I will, of course, be sending this email straight on to the ICO for evidence. BMW Financial Services have, in essence, sent me a letter stating that they intend to breach the DPA (Data Protection Act) in order to force me to pay them. I cannot see how the ICO can possibly ignore this.

And so it seems, I may be finally on the home straight. Maybe, just maybe, this is the breakthrough!

I urge all of you with missed/late payment records on your credit files to...
- Complain to the ICO, as I have done, claiming that you are suffering an unfair absence of a default
- Contact BMW Financial Services and ask them the same that I have done

[Dehaw]

This is absolute gold KURTCRISCO, unfortunately for me, I don't have any late payments as yet but as soon as I do I'll be doing the exact same thing. I did previously ask why the credit file shows the agreement account still open because it isn't and they did tell me that its a fair reflection as it shows as the car being VT'd with no late payment, yet.

Great work, keep us posted on how it goes because I agree based on your evidence that this could be what we have been waiting on and firmly believe the folks responding to these emails have no clue about the law at all and are regurgitating what their line manager is telling them, if they're even doing that!

[stuckcluckets]

This is absolute gold KURTCRISCO, unfortunately for me, I don't have any late payments as yet but as soon as I do I'll be doing the exact same thing. I did previously ask why the credit file shows the agreement account still open because it isn't and they did tell me that its a fair reflection as it shows as the car being VT'd with no late payment, yet.

Great work, keep us posted on how it goes because I agree based on your evidence that this could be what we have been waiting on and firmly believe the folks responding to these emails have no clue about the law at all and are regurgitating what their line manager is telling them, if they're even doing that!

Thanks Dehaw. I've sent BMW Financial Services' very daft email over to the ICO, so we'll see what happens!

Fingers crossed this is the breakthrough we've all needed!

[stuckcluckets]

Hi all.

Heard from my new case officer at the ICO today, with their "final verdict" as it were, and unfortunately, it's not good news.

Introduction

Your original concern was that BMW Financial Services (‘BMW’) are reporting information to the credit reference agencies. You believe this is not compliant with the ‘SCOR’ guidance.

On the basis of the information provided, your Case Officer responded informing you that it would appear likely BMW has complied with the requirements of the Data Protection Act 1998 (‘the DPA’) in reporting the information to the credit reference agencies.

You are dissatisfied with this outcome and have asked that your case is reviewed.

My Findings

Initially I should clarify the role of the ICO. We are an independent regulator, and we cannot work on behalf of individuals to resolve matters to their satisfaction. Our purpose is to improve information rights practices within organisations.

Part of that process may require us to make an assessment as to whether it is ‘likely’ or ‘unlikely’ that an individual’s data has been processed in accordance with the Data Protection Act 1998 (DPA). These assessments are made on the balance of probabilities. We are not a court of law, and in the absence of documentary evidence we must accept the assurances of an organisation.

Having reviewed your case, I am satisfied that the outcome reached by your Case Officer is correct, however a clearer explanation could have been provided.

I understand that you believe the information should not be reported on your credit file as you voluntarily terminated the agreement as part of the contract between yourself and BMW.

As the mileage clause was made clear from the beginning of the agreement with BMW, and you had exceeded the allowed mileage, they would be entitled to request any relevant payment for this.

As you have not made the payments for the excess mileage it would appear fair and accurate for BMW to report this information to the credit reference agencies.

With regard to your concerns about the account eventually being defaulted, the SCOR guidelines do not clarify what is considered to be a charge or a fee, it is our interpretation that this particular reporting would not fall under the SCOR guidelines of a fee or charge.

We would consider the guidelines to refer to fees and charges such as unexpected overdraft fees. As the mileage clause was apparent from the beginning of the agreement it would appear fair for this to be reported to the credit reference agencies as in default should you not make the relevant payments.

Turning to your questions about a default notice, I should explain that the DPA does not require an organisation to send a default notice to an individual, this is a requirement under the Consumer Credit Act.

However we would expect an organisation to report the account as in default once the relationship has broken down, typically this is between three to six months of no payments being made.

What Next?

Please accept my apologies for the misunderstanding in our correspondence with you.

Thank you for giving me the opportunity to review your case.

A case review is the final stage of the ICO complaints procedure. If you believe that you have received a poor service from us, or if you believe we have not treated you properly or fairly, then you may be able to complain to:

The Parliamentary and Health Service Ombudsman, Millbank Tower, Millbank, London SW1P 4QP.

All complaints to the Ombudsman must be made through your MP. I would advise you to first call the Ombudsman’s Helpline on 0345 015 4033 to see if they are able to assist you further.

If your complaint relates to the way in which we have interpreted the law then the Ombudsman cannot help you. If you want to challenge our interpretation of the law, you may wish to consider seeking legal advice.

It's really disappointing that even the Information Commissioner's Office can't get their heads around the situation.

Essentially, they're saying that they would expect a lender to record a default notice after between 3 - 6 missed/late payment entries, but they would not view said default as unfair since the 2016 SCOR guidance makes no reference to what constitutes a fee or a charge, and therefore they would not request that it be removed.

Honestly, I'm gobsmacked. If I was a gambling man, I'd bet that this is the best they could come up with in order to further avoid facing up to the gaping hole I've highlighted in the way that lenders are allowed to record data with CRAs.

I suppose the one good thing that can be taken from this is the fact that the ICO has confirmed that BMW Financial Services (GB) Limited DO need to issue a default rather than continuing to record missed/late payment entries every month. So as per my last post, I urge all those of you who have multiple missed/late payment entries stacking up to contact the ICO and force BMW Financial Services to issue you with a default. At least then, if nothing else, the continual bogus recordings on your credit files will stop.

After I received the above today, I decided that enough's enough. I've contacted my insurer and started going down the court proceedings route. I've just filled out a lovely questionnaire that's designed to assess my claim's "likelihood of success" and determine whether or not my insurer will cover me, so we'll see what that brings.

Today's news was saddening, but I'm not defeated yet. My resolve remains as strong as ever.

Thanks again for all the support, I'll be sure to keep you all updated.

[R0b]

Hi Kurt, I applaud you for your persistence. I am somewhat perplexed at the ICO's response suggesting that the excess mileage charges are not considered to be a charge or fee - perhaps its not defined because its so bloody obvious!

I wonder is there any reference in your contract which refers to excess mileage charge/fee? If it does I would think that is obvious in itself.

If the excess mileage doesn't fall within the definition of a charge or fee, then what is it? The only other logical category it would fall under is credit, but credit is defined under section 9 of the CCA as the following: "In this Act “credit ” includes a cash loan, and any other form of financial accommodation."

We would consider the guidelines to refer to fees and charges such as unexpected overdraft fees.

To my mind, the case officer has answered his own question here. Overdraft fees is deemed a charge/fee and so is a default charge for missing a repayment. These charges are in the contract otherwise the lender wouldn't be able to claim for it! So the fact that the mileage clause is in the agreement is irrelevant, it's the question of whether the sums are considered to be a fee or charge. In my mind (and any other reasonable person's mind) it is classed as a charge or fee, if it's not credit as per the CCA definition then it can't be anything else.

I would speculate that the case officer knows he has shot himself in the foot and is trying to recover the situation. Notice how he omitted the word "charge" when referring the the excess mileage clause. I couldn't possibly think that a court would agree with this case officer's opinion that the excess mileage sums are not a charge or fee.

Although not defined in the SCOR guidance, there is no good reason why fees or charge should not be given their usual and ordinary meaning. For example, I would define "charge" as meaning an obligation or liability e.g. You are charged with removing all rubbish from the garden / You must pay a £30 administration charge.