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Hello all,
I have recently had an experience getting a default removed on a loan I had with Natwest bank and I wanted to share with everyone what I did, in the hope it might help people in future.
I had a loan with Natwest back in 2007 for £15,000. I defaulted in 2012 and the default was being reported to credit reference agencies. The loan is now in debt collections and I'm paying off a small amount each month, the interest has been frozen, and the debt is still largely outstanding.
I wrote a few letters to Natwest querying the date of the default (I believed it should have been recorded sometime in 2010). I used a template I found on the internet which advised to ask the bank for a copy of the original credit agreement pursuant to section 78 Consumer Credit Act 1974. My letter asked for this information.
I received a letter back from Natwest stating that they were unable to locate the loan agreement form. They acknowledged, in their letter, that pursuant to s.77(4) Consumer Credit Act 1974, they were unable to enforce the debt in a court. I did not actually know that, but on researching further that is indeed what that section says. (Note this section does not prevent creditors from reporting adverse information to credit referencing agencies - only from being able to enforce the debt in a court).
I got in touch with a solicitor I found on the internet who specialises in this type of thing. He advised me (informally and without charge) about the recent Court of Appeal case of Grace & Anor v Blackhorse (30th October 2014). The Court in that case ruled that the recording of a default in circumstances where the underlying agreement was unenforceable was not accurate unless it also recorded that the debt was unenforceable. In that case, the Court unanimously found in Mr Grace’s favour, ruling that it was not accurate to report him as a defaulter on his credit file.
I see the case has been discussed in a previous thread on this site here:
http://legalbeagles.info/forums/show...413-30-10-2014
Of course, this is only a Court of Appeal case and could well be overturned by the Supreme Court, but it hasn't been yet, to my knowledge. It is, therefore, precedent as it stands.
Also it is worth noting that in that case, the agreement had actually been ruled by a previous judge/court as 'irredeemably unenforceable'. However, in my opinion, it is worth arguing with the bank about this because, if it came down to it, a court is likely to rule the agreement 'irredeemably unenforceable' in a case where the creditor can't find the agreement. It's clearly a situation which is going to persist for an indefinite period of time.
I wrote to Natwest pointing this out and asking them to either remove the default from my credit file or report it accurately (i.e also stating that the agreement was unenforceable).
I never heard back from them and assumed I was unsuccessful.
I checked my credit report with Clearscore.com the other day and the default has disappeared. I double checked by calling Natwest and they confirmed there was no default on their record and they were, therefore, not reporting any default to credit reference agencies.
While Natwest continue to be vague and mysterious (they don't keep copies of any letters they've sent to me, were unable to see any letters I had sent to them on their 'system' and don't have any explanation as to why the default has been removed) I can only assume they have removed the default in response to my correspondence to them. The default was recorded 2012 so technically should not come off until July 2018.
This will obviously only help people who's creditor has lost their agreement. However, I wonder how common it is? It might be worth asking the question. Find out whether your creditor is able to provide you with a copy of your agreement. If not, it's not enforceable in the courts and furthermore, you might be able to have any default removed from your credit file.
I am wondering whether Natwest has lost loads of data and covered it up. They don't seem to know anything about my agreement except the bare minimum. It's very strange.
If anyone would like copies of letters I sent I'm happy to provide them in template form.
I have recently had an experience getting a default removed on a loan I had with Natwest bank and I wanted to share with everyone what I did, in the hope it might help people in future.
I had a loan with Natwest back in 2007 for £15,000. I defaulted in 2012 and the default was being reported to credit reference agencies. The loan is now in debt collections and I'm paying off a small amount each month, the interest has been frozen, and the debt is still largely outstanding.
I wrote a few letters to Natwest querying the date of the default (I believed it should have been recorded sometime in 2010). I used a template I found on the internet which advised to ask the bank for a copy of the original credit agreement pursuant to section 78 Consumer Credit Act 1974. My letter asked for this information.
I received a letter back from Natwest stating that they were unable to locate the loan agreement form. They acknowledged, in their letter, that pursuant to s.77(4) Consumer Credit Act 1974, they were unable to enforce the debt in a court. I did not actually know that, but on researching further that is indeed what that section says. (Note this section does not prevent creditors from reporting adverse information to credit referencing agencies - only from being able to enforce the debt in a court).
I got in touch with a solicitor I found on the internet who specialises in this type of thing. He advised me (informally and without charge) about the recent Court of Appeal case of Grace & Anor v Blackhorse (30th October 2014). The Court in that case ruled that the recording of a default in circumstances where the underlying agreement was unenforceable was not accurate unless it also recorded that the debt was unenforceable. In that case, the Court unanimously found in Mr Grace’s favour, ruling that it was not accurate to report him as a defaulter on his credit file.
I see the case has been discussed in a previous thread on this site here:
http://legalbeagles.info/forums/show...413-30-10-2014
Of course, this is only a Court of Appeal case and could well be overturned by the Supreme Court, but it hasn't been yet, to my knowledge. It is, therefore, precedent as it stands.
Also it is worth noting that in that case, the agreement had actually been ruled by a previous judge/court as 'irredeemably unenforceable'. However, in my opinion, it is worth arguing with the bank about this because, if it came down to it, a court is likely to rule the agreement 'irredeemably unenforceable' in a case where the creditor can't find the agreement. It's clearly a situation which is going to persist for an indefinite period of time.
I wrote to Natwest pointing this out and asking them to either remove the default from my credit file or report it accurately (i.e also stating that the agreement was unenforceable).
I never heard back from them and assumed I was unsuccessful.
I checked my credit report with Clearscore.com the other day and the default has disappeared. I double checked by calling Natwest and they confirmed there was no default on their record and they were, therefore, not reporting any default to credit reference agencies.
While Natwest continue to be vague and mysterious (they don't keep copies of any letters they've sent to me, were unable to see any letters I had sent to them on their 'system' and don't have any explanation as to why the default has been removed) I can only assume they have removed the default in response to my correspondence to them. The default was recorded 2012 so technically should not come off until July 2018.
This will obviously only help people who's creditor has lost their agreement. However, I wonder how common it is? It might be worth asking the question. Find out whether your creditor is able to provide you with a copy of your agreement. If not, it's not enforceable in the courts and furthermore, you might be able to have any default removed from your credit file.
I am wondering whether Natwest has lost loads of data and covered it up. They don't seem to know anything about my agreement except the bare minimum. It's very strange.
If anyone would like copies of letters I sent I'm happy to provide them in template form.
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