Default Removal and the Law

[apayg]

Hi Everyone - just joined the site as the information regarding defaults was very helpful.


I am looking for a bit of clarification in regards to the banks issuing defaults and the law.

Lloyds TSB and Nat West are the two companies i am disputing defaults with and seemed to be getting no where and want to know my legal rights prior to taking up a complaint with the FOS.

Lloyd's TSB have issued a default against my Experian Credit file for a credit card i have with them. The account is still live and i am on a re-payment agreement with them.

I have never received a default notice letter of Lloyd's warning me that a default was being put onto my name. I have requested a true copy of the default that was sent but they say they do not keep the original copy sent and they are not legally bound to hold a true copy - is this true?

Also when i got into financial difficulties I got in contact with 'Step Change' charity (CCCS) that arranged lower monthly payments with Lloyd's. So i have never missed a monthly payment, it has just been below the required amount but with Lloyd's approval.

I am now in a position to pay off all the outstanding debt with Lloyd's credit card to the amount of £3,250 but I want this default removed before i do. I have wrote to them offering them full and final settlement for the outstanding amount but on the condition the default is removed but they have said they are unable to do this. if i had received the default notice when issued I would have had a family member lend me the money rather than enter into a payment plan.

NAT WEST have done the same but against a Student Account and a Current Account I have with them. Upon contact them they informed me the defaults were for a missed mortgage payment. When i checked i have only ever missed one mortgage payment and this was paid four weeks later in full. So if anyone has any information in regards to defaults and current accounts it would be most helpful.

Thanks for reading

[FlamingParrot]

Re: Default Removal and the Law

Hi and welcome!

Hi Everyone - just joined the site as the information regarding defaults was very helpful.

I am looking for a bit of clarification in regards to the banks issuing defaults and the law.

Lloyds TSB and Nat West are the two companies i am disputing defaults with and seemed to be getting no where and want to know my legal rights prior to taking up a complaint with the FOS.

Lloyd's TSB have issued a default against my Experian Credit file for a credit card i have with them. The account is still live and i am on a re-payment agreement with them.

I have never received a default notice letter of Lloyd's warning me that a default was being put onto my name. I have requested a true copy of the default that was sent but they say they do not keep the original copy sent and they are not legally bound to hold a true copy - is this true?

This is a common response from banks.

Also when i got into financial difficulties I got in contact with 'Step Change' charity (CCCS) that arranged lower monthly payments with Lloyd's. So i have never missed a monthly payment, it has just been below the required amount but with Lloyd's approval.

This is a common misconception, that if you keep up the payments under an agreed arrangement, you won't be defaulted. In reality, by requesting lower repayments you have, in fact, defaulted on your account because you stopped making the agreed contractual payments and started making reduced payments instead.

I am now in a position to pay off all the outstanding debt with Lloyd's credit card to the amount of £3,250 but I want this default removed before i do. I have wrote to them offering them full and final settlement for the outstanding amount but on the condition the default is removed but they have said they are unable to do this. if i had received the default notice when issued I would have had a family member lend me the money rather than enter into a payment plan.

The CRA files record your conduct on the account and, in most cases, creditors will refuse to remove a default even if you pay the debt, it will just be marked as "Satisfied". Such reluctance to remove defaults means there really is little incentive for the debtor to settle the debt once they have defaulted on it.

NAT WEST have done the same but against a Student Account and a Current Account I have with them. Upon contact them they informed me the defaults were for a missed mortgage payment. When i checked i have only ever missed one mortgage payment and this was paid four weeks later in full. So if anyone has any information in regards to defaults and current accounts it would be most helpful.

These are the technical guidelines for filing defaults with the CRAs:
http://www.ico.org.uk/~/media/docume...%20%20doc.ashx

These guidelines state a default should be recorded between 3 and 6 months after missing a contractual payment.

[FORCEOFONE]

Re: Default Removal and the Law

Might i comment on this,

If a lower repayment agreement has been agreed between the creditor and debtor, surly the credit file will be updated with arrangement to pay, not a default.

I take it the default is reported under 87(1) of the CCA1974, and not a default on a monthly repayment as to contractual obligation

But as stated, you have defaulted on contractual obligations and breached the agreement