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‘Lloyds wrecked my credit history over £928 debt I didn’t owe’ – Telegraph
Brian Grace has spent 12 years fighting Lloyds Banking Group over a costly mistake on his credit profile.More than a decade ago he and his partner Margaret were wrongly labelled as “defaulters” over a debt Mr Grace did not owe, leaving him unable to open even a current account.Black Horse, a lender that is part […]
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Brian Grace has spent 12 years fighting Lloyds Banking Group over a costly mistake on his credit profile.
More than a decade ago he and his partner Margaret were wrongly labelled as “defaulters” over a debt Mr Grace did not owe, leaving him unable to open even a current account.
Black Horse, a lender that is part of Lloyds Banking Group, was responsible for recording the information. It lodged details of a non-payment of £928 with all three credit-rating agencies, Experian, Equifax and Callcredit.
These companies use information provided by banks and other firms that offer credit, including mobile phone firms and shops, to create a history of a person’s borrowing.
Lloyds labelled Mr Grace a “defaulter” over a laptop he had bought in 1997 using a hire-purchase agreement. Mr Grace, a former electrical engineer from Cheshire, had bought the computer as a gift for his grandson.
A few years into paying for the computer, Lloyds imposed penalty charges on him for not keeping up with his payments. But Mr Grace said he had asked for the repayments to be collected from a different bank account, and that his instructions were ignored. The lender maintains that Mr Grace fell into arrears because he closed the account that he used to pay the direct debit.
Mr Grace refused to pay the penalties and the matter went to the county court. In 2000 he had a stroke of luck: the court ruled the credit agreement “unenforceable” anyway, because it hadn’t made the interest rate clear (see below).
But Lloyds, ignoring the court’s decision, told the credit-rating agencies that Mr Grace was a defaulter and slapped a charge of £928 on his records. The sum included the debt from the laptop and £128 in other charges, such as court costs, interest and payment protection insurance.
Mr Grace was unaware of the defaulter notice until in 2003 he applied for a current account and was turned down. He said: “I asked the bank why it couldn’t give me an account, and it said I had this default notice. So I contacted the credit-reference agencies, which said they only had information from the lender. Then I contacted Black Horse, which refused to budge.”
It took a year of complaints to the lender, the Information Commissioner’s Office (ICO), which oversees credit-referencing agencies, and his MP before the default notice was withdrawn.
But Mr Grace didn’t stop there. Determined to pursue Lloyds for damages, he took the bank to court, arguing that the default should never have been placed on his record. And last November, 17 years after the saga began, the court found in his favour.
The judge ruled that although it was lawful to register a default arising from an “unenforceable” credit agreement, Black Horse was in error over the sums of money involved. By recording Mr Grace’s “default” as £928, which included legal and other costs, and by describing him as “borrower” rather than a “hirer”, Black Horse breached data protection rules, the judge found.
Mr Grace was pleased with the outcome. “We’re in our 70s and don’t need any more credit,” he said. “But we kept fighting as we don’t want other people to go through the same ordeal.”
Black Horse confirmed that the default was removed from his credit file in 2004. A spokesman said: “Mr Grace’s case was a unique situation and we are not aware of similar cases.”
Brian Grace and Margaret decided that challenging the default notice was worth a lengthy court battle
Paul Tilley, Mr Grace’s legal aide, said : “If someone’s data is inaccurate and they suffer damages as a result, the mistake has got to be removed. If a customer wantonly doesn’t pay their debts a default is justified. But someone who disputes an unfair debt or penalty charge should not be faced with an arbitrary default.”
Mr Tilley said banks used the threat of ruining a customer’s credit history as a “whipping stick” to force them into paying charges.
“Creditors have a duty of care to ensure circumstances surrounding any default are right. They should not arbitrarily report a debt that is in dispute for the sake of it,” Mr Tilley said.
Why the laptop loan was 'unenforceable’
Many credit agreements issued before April 6, 2007, have been found to be flawed or unenforceable. In Mr Grace’s case, he had been shown two different interest rates on his credit agreement. He should have been sent only one, as required by section 78 of the Consumer Credit Act (1974).
Mr Grace’s court victory proved that consumers should be able to remove black marks from their credit files which they think shouldn't be there.
Read More -> ‘Lloyds wrecked my credit history over £928 debt I didn’t owe’ – Telegraph
More...
Brian Grace has spent 12 years fighting Lloyds Banking Group over a costly mistake on his credit profile.
More than a decade ago he and his partner Margaret were wrongly labelled as “defaulters” over a debt Mr Grace did not owe, leaving him unable to open even a current account.
Black Horse, a lender that is part of Lloyds Banking Group, was responsible for recording the information. It lodged details of a non-payment of £928 with all three credit-rating agencies, Experian, Equifax and Callcredit.
These companies use information provided by banks and other firms that offer credit, including mobile phone firms and shops, to create a history of a person’s borrowing.
Lloyds labelled Mr Grace a “defaulter” over a laptop he had bought in 1997 using a hire-purchase agreement. Mr Grace, a former electrical engineer from Cheshire, had bought the computer as a gift for his grandson.
A few years into paying for the computer, Lloyds imposed penalty charges on him for not keeping up with his payments. But Mr Grace said he had asked for the repayments to be collected from a different bank account, and that his instructions were ignored. The lender maintains that Mr Grace fell into arrears because he closed the account that he used to pay the direct debit.
Mr Grace refused to pay the penalties and the matter went to the county court. In 2000 he had a stroke of luck: the court ruled the credit agreement “unenforceable” anyway, because it hadn’t made the interest rate clear (see below).
But Lloyds, ignoring the court’s decision, told the credit-rating agencies that Mr Grace was a defaulter and slapped a charge of £928 on his records. The sum included the debt from the laptop and £128 in other charges, such as court costs, interest and payment protection insurance.
Mr Grace was unaware of the defaulter notice until in 2003 he applied for a current account and was turned down. He said: “I asked the bank why it couldn’t give me an account, and it said I had this default notice. So I contacted the credit-reference agencies, which said they only had information from the lender. Then I contacted Black Horse, which refused to budge.”
It took a year of complaints to the lender, the Information Commissioner’s Office (ICO), which oversees credit-referencing agencies, and his MP before the default notice was withdrawn.
But Mr Grace didn’t stop there. Determined to pursue Lloyds for damages, he took the bank to court, arguing that the default should never have been placed on his record. And last November, 17 years after the saga began, the court found in his favour.
The judge ruled that although it was lawful to register a default arising from an “unenforceable” credit agreement, Black Horse was in error over the sums of money involved. By recording Mr Grace’s “default” as £928, which included legal and other costs, and by describing him as “borrower” rather than a “hirer”, Black Horse breached data protection rules, the judge found.
Mr Grace was pleased with the outcome. “We’re in our 70s and don’t need any more credit,” he said. “But we kept fighting as we don’t want other people to go through the same ordeal.”
Black Horse confirmed that the default was removed from his credit file in 2004. A spokesman said: “Mr Grace’s case was a unique situation and we are not aware of similar cases.”
Brian Grace and Margaret decided that challenging the default notice was worth a lengthy court battle
Paul Tilley, Mr Grace’s legal aide, said : “If someone’s data is inaccurate and they suffer damages as a result, the mistake has got to be removed. If a customer wantonly doesn’t pay their debts a default is justified. But someone who disputes an unfair debt or penalty charge should not be faced with an arbitrary default.”
Mr Tilley said banks used the threat of ruining a customer’s credit history as a “whipping stick” to force them into paying charges.
“Creditors have a duty of care to ensure circumstances surrounding any default are right. They should not arbitrarily report a debt that is in dispute for the sake of it,” Mr Tilley said.
Why the laptop loan was 'unenforceable’
Many credit agreements issued before April 6, 2007, have been found to be flawed or unenforceable. In Mr Grace’s case, he had been shown two different interest rates on his credit agreement. He should have been sent only one, as required by section 78 of the Consumer Credit Act (1974).
Mr Grace’s court victory proved that consumers should be able to remove black marks from their credit files which they think shouldn't be there.
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