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Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

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  • Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

    I apologise for a long first post, but please bear with me while I summarise some painstaking research I have done on the Information Commissioners Office and its secret negotiations with Credit Reference Agencies and Utility Companies to unlawfully allow credit defaults to be entered on non-credit agreements.

    BACKGROUND: In December 2012 I settled an invoice from Southern Water. Three months later I received a notice threatening a credit default from SW despite having a receipt, a reference number and a bank statement confirming payment received by them in full, three months earlier. I phoned Southern Water repeatedly to no avail. Just days before the default was threatened to be entered, in desperation I wrote to Southern Water's CEO threatening them with a criminal action for harrassment and claiming damages. Only at this point did they contact me and apologise for the "mistake".

    Eventually I contacted the head of consumer affairs at SW and had a long exchange of emails. This man appeared not to have any knowledge of the law and referred me to his company lawyer. I talked at length to this lawyer who confirmed that permission to enter a credit default for bills that had no express credit agreement attached to them was requested in a series of meetings between the Information Commissioners Office (ICO) and Experian and other CRAs and several Utility Companies. The lawyer told me that he registered his disquiet at these meetings that credit defaults entered on Utility Bills might be subject to challenge on several grounds that I had suggested, and he agreed with these misgivings: 1. Utility bills are invoices for services provided in advance and paid for in arrears, exactly like a garage servicing a car, or a newsagent delivering papers and billing a week or month later. None of these kinds of transactions are credit agreements, even though they have a credit element within them. 2. For a credit default to be entered a SPECIFIC and EXPRESS agreement must first be entered into and signed in full knowledge by both parties. 3. Such agreements are regulated by the Consumer Credit Act. A mobile phone bill IS generally a credit agreement because it is signed by the parties and understood to be so. An application for a utility such as gas or water is NOT a credit agreement and you will see that such applications do not declare themselves as such.

    I wrote to the ICO and asked them why they had given permission to CRAs and Utility companies to enter credit defaults on Utility bills when both the latter already had cheap and efficient ways of pursuing debt by means of the county court, for which bulk summonses can be obtained and processed at a very small cost, and arguably cheaper than entering a default with a CRA. I also asked them to explain the legality of their decision and quoted their own guidelines on credit defaults which mentioned repeatedly and exclusively "lenders" and "borrowers". Nowhere in their remit or guidelines did they declare or claim they had the power to allow defaults other than for specific, signed credit agreements. I also asked them to explain how their rules somehow resulted in me being threatened falsely with a default.

    There followed an immense amount of correspondence and several FOI requests which sought information about the ICO's meetings and who attended them. To this day, after several months, the ICO has rejected all but one of my FOI requests on various and spurious grounds, including not being in the public interest and therefore claiming anonymity for the CRA and Utility company executives, a claim that my requests were too expensive to follow up, another reply stating that the information was not available, another response saying my complaint that their replies had not been adequate was rejected. Except for a few heavily redacted "minutes" that in fact were not minutes at all, they have refused to give one single piece of useful or salient information. I then asked them to take up a formal complaint against Southern Water which so far they have failed to do. In addition, at every point during my correspondence the ICO was obstructive, devious, delayed answers until the absolute end of their statutory time limit and then each successive letter was met with a requirement that I opened a "new" case with another delay of 20 days before I got a response, which again rejected my request and asked me yet again to try another request with yet another 20 day delay until their reply.

    This outrageous game playing clearly has one purpose: The very public body who regulates other bodies on freedom of information is itself blocking access to the same thing.

    Undaunted I tried other exhausting avenues of research. I have discovered that between approximately 2007 and 2011 the Information Commissioner had what were tantamount to secret talks with Reference Agencies and they were bulldozed into acquiescence over permission for CRAs to enter unlawful defaults. I know the meetings were likely to have been secret, and by that I mean that no consultation was offered to consumer groups or concerned members of the electorate, because among other information the minutes did not indentify anyone present who wasn't either a member of the ICO or the CRAs or Utility companies. A very brief outcome statement and policy change notice was published on an obscure part of the ICO website subsequent to these meetings and the go ahead was evidently allowed through with barely a whisper. This issue had been heard in private, passed without any legal reference and implemented with not a single consultation I am aware of with anyone but the three parties referred to.

    In effect the ICO has invented the law as it goes along, without a shred of evidence that their decision has any legal basis whatsoever. Moreover, despite carefully describing my own situation, no-one at the ICO expressed any regret, empathy or understanding that I was on the cusp of having my credit rating ruined, and appears, so far, not to be interested in pursuing any complaint or action against Southern Water.

    Regarding CRAs themselves, I think any intelligent and aware consumer should be very concerned at the UNILATERAL power of these agencies and their collusion with the ICO, the very body that is meant to be holding them to account on our behalf. Rather than regulate them properly, the ICO has revealed itself as a bed fellow of the CRAs. Increasingly, reference agencies are exploiting consumers in outrageous ways without any proper balances. They hold increasingly large amounts of data about you and I, and then use scare tactics in order to persuade you to stump up cash before they reveal that info. It is a fundamental conflict of interest to both gather and mine date on the one hand, then sell it on the basis of the paranoia they foster. The way they operate is not dissimilar to the following scenario:

    A neighbour knocks on your door and tells you he has information that you are a thief, con artist and rapist. You ask him where he gained this alleged information. "Ah, well you'll have to pay me to find out". This is tantamount to defamation and extortion at the same time. It is essentially a circular con-trick, designed to snitch on you to others and then charge you to stop the snitching. The CRAs have immense power and that power, whether based on true information or not, can potentially ruin you financially.

    A note about the difference between a credit default and a CCJ: It is a myth that a CCJ is worse. A county court action has a crucial quality lacking in a credit default. YOU CAN CHALLENGE a threatened CCJ in open court. This is due process. A credit default is NOT due process. It is a unilateral act that cannot be overturned in open court, and cannot be challenged except by virtue of rules which the CRAs set themselves, and their decision is usually final without running through hoops. A credit default, unless stubbornly challenged and overturned, remains on your file for six years and is certain to drastically reduce your rating whether it is true or not.

    I am not by any means suggesting that legitimate defaults should not be entered and I am not advocating a debtor's charter. I would urge anyone in a similar position or who is concerned about this subject to email or write to the ICO and challenge their policy on defaults, open a FOI request (it is free) on the same subject and also demand evidence that they have any power at all to make the law up as they wish. Thanks for your patience in reading this and I would welcome any views or similar experiences. Thank you.
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  • #2
    Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

    Do you have reference to the law you believe is being broken by Utility Companies sharing financial data with CRA's ? CAIS is run in line with the Data Protection
    Act 1998. I don't believe there is any specific legislation saying that only Consumer Credit Agreement data can be shared by the CRA's ?

    The industry does have quite strict guidance that information can only be shared with permission - and on loans/credit agreemtns you tend to sign agreeing that information can be shared with a third party. I haven't looked into whether we agree to this when we sign up to a new utility provider etc but that might be where to start looking.

    Attached doc shows it was included in the guidance in 2007 (red bit on page 3)
    Attached Files

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

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    • #3
      Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

      Hi Amethyst,

      Thanks for your response and yes, I am familiar enough with the doc you mention to be able to recite most of it by heart. The "updated" form of the original guidance changed, but the ICO realised it could not abandon two very important key words, or three if you include the word "credit". Those key words are "lender" and borrower". The ICO knows that it cannot go beyond these key words in describing circumstances where a default may be entered. That is because enshrined in other laws, case law, equity and common law are the fundamental principle that a credit agreement is overwhelmingly distinct from all other transactions and the distinction is one that I referred to: That of an agreement that is EXPRESSLY entered into by both parties for an agreed sum of credit for which there are set payments for the duration of the agreement and (if a pure loan) the agreed interest rate, or variable rate limit. Moreover these agreements are regulated by the Consumer Credit Act. A utility bill is not regulated by, nor does it fall under, the remit of this Act.

      Note from the guide several quite extraordinary statements that themselves are breaches of other laws, including Unfair Terms and Condtions regulations, where again UNILATERALLY the guide states that defaults or other remedies can be sought when the relationship is said to "have broken down". Now let's look at who decides whether the relationship has broken down: Surprise surprise! It is the "Lender", or creditor who decides, not the consumer. So right from the word go this document is unlawful as it seeks to create an imbalance in the rights of the parties.

      The guide goes on to hint that the fundamental rules have changed owing to the contemporary state of modern transactions, and uses that excuse to further hint that it might be ok to enter a CREDIT default where there is no credit agreement. But just because this is declared it does not make it lawful. The ICO has no powers to make the law as it likes or loosely interpret other laws. The sharing of or request for data has to be in proportion to and not in excess of that needed to effect the transaction. If you look at Utility company application forms you will not see any demand or agreement to share data in the sense that credit agreements themselves require, and that is because a Utility bill is just like any other similar trade transaction. It is a contract for the supply of a service, but it is not a consumer credit agreement. Moreover, the pursuit of debt is already perfectly well provided for by the county court. A mobile phone contract is different because it is an expressly agreed contract for credit, paid for monthly at a given rate and can be subject to both data sharing and mining, but both parties have signed that agreement.

      Some Utility forms impertinently ask for one's date of birth and National Insurance number. This is a grossly excessive intrusion and breaches the proportion test, as would any insistence that the company can do a search. Again, the fact that it might be on the form doesn't make it lawful. Insurance companies attempt to do the same thing, by telling you they will do a credit search even though you elected to pay the premium by debit card. The ICO is very lazy at policing these breaches of the Data Protection Act. A Utility bill cannot be a credit agreement because at the inception of the application, no-one knows what the bill is likely to be (it might be zero if no power or water was consumed) and that's another reason why you cannot issue a credit default where the required payment is not known in advance. If CRAs can enter credit defaults for non-credit transactions then one only needs to ask a simple question. "I work as, say, a plumber, or a carpenter, or software designer and half my clients haven't paid me. So I should be able to enter a credit default." The answer is that you can't. Rules have to be consistent. If a trader cannot enter a credit default then nor should a utility company. The transactions are exactly similar.


      • #4
        Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

        I have just posted a new thread about Anglian water filing a default.
        They have effectively crippled my business.
        I cannot see how they can file a default when I haven't signed anything.
        They are unwilling to help , if you can look at my thread, I would be so very very grateful for any advice.


        • #5
          Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

          Very interesting read and we both seem to have come across identical abuses and in my opinion the wrongful and clandestine agreements between the public funded body (ICO) and water utility companies.

          The (ICO) certainly do not appear to be protecting personal data and also seem to have somehow circumnavigated several laws and ignored the Consumer Credit Act UK by supporting the sharing of private information with CRA's by utility companies, without the consumers permission.

          I am currently pursuing Anglian Water and the ICO in respect of false information that exists with CRA's regarding myself, and if you've had any updates regarding your own situation, I would be pleased to hear of them.

          I was told by Experian that they could not possibly be prosecuted for holding and sharing misleading, incorrect and damaging information about myself, because they are not responsible for the accuracy of information they share, but that their clients are. And as long as they make an effort to correct the information over a given time - usually 28 days - that they have indeed upheld their obligations.

          However I have since found at least one case where a CRA has indeed been taken to court and judgement has gone in favour of the complainant.

          I am also of the opinion that these CRA's are indeed deliberately painting a false picture about the public, in order to extort money from them.

          As I see it, they have far too much power and far too little responsibility in how they wield it, and rather than the ICO being in support of a CRA, they should indeed be fighting them on behalf of the public, which is indeed why I thought we funded the ICO in the first place.

          There are many questions to be answered regarding the lack of oversight by several organisations with regard to this debacle and I would advise anybody who has been affected to pursue the ICO and complain to their MP's.


          • #6
            Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

            Thank you for taking an interest.
            Sadly I have got nowhere with Anglian water.
            I have had a great deal of correspondence , sympathy, understanding , and acknowledgement from customer services, even admitting that it is unduly harsh, but no action.
            Some have genuinely done their best to help , but do not have the authority.
            I have written to the CEO , polite responses, but no is all I get.

            The questions I have asked that they do not answer are

            How can they say I have defaulted on a credit agreement when I havnt signed or agreed anything.

            If they have payment terms of monthly 6 monthly and annually, when did they ever ask me what terms I wanted.

            How can they file information that is misleading and defamatory and this be legal?

            Why do they keep accessing my credit file without asking me( they have done this on numerous occasions - I get an alert from credit expert!!!)

            They havnt followed the correct procedure to issue a default according to the FSA but they say they don't need to, how can this be the case.

            They have crippled my business , I have a small property development business, I had borrowed heavily to purchase a property , renovate and then remortgage , but now can't get a mortgage , because of the default , so are left with massive payments each month to service the loans.

            All of this because of being late paying a bill of 114 that had been added to the next bill anyway.

            I really am at a loss as to what to do. I don't want this to consume my life, but sadly it is!

            I also now want to move house, but can't get a mortgage without paying extortionate rates of interest due to the default.

            I understand that when a lender looks at my credit file they are unable to see what the default is for, they are unable to see details, hence immediate rejection.

            I really feel that this whole system is unfair , and a gross abuse of power.

            But how does anyone take them?

            Rats are bigger than mice, I cannot afford to lose everything I have fighting them in court, but I really do believe that this is what should happen.

            The case seems so simple, the CRA reports that I have broken a written credit agreement.

            Anglian water say I have.

            I say I havnt .

            There is no evidence to support the claim.

            Who is at fault, both of them.

            But until someone is able to take this on, more and more of us are suffering at the hands of these bullies.

            If you can think of any way forward , please help, I have exhausted everything I can do.

            Look forward to hearing from you



            • #7
              Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

              Afaik, CRAs keep data which is supplied by lenders.

              It follows therefore that it is the lenders' responsibility to provide correct data.

              This seems to be the case as when someone finds incorrect data on their file & complains, it needs to go back to the lender for authorisation to correct the data entry
              CAVEAT LECTOR

              This is only my opinion - "Opinions are made to be changed --or how is truth to be got at?" (Byron)

              You and I do not see things as they are. We see things as we are.
              Cohen, Herb

              There is danger when a man throws his tongue into high gear before he
              gets his brain a-going.
              Phelps, C. C.

              "They couldn't hit an elephant at this distance!"
              The last words of John Sedgwick


              • #8
                Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

                Simplistically the water providers are Not Saying That One Has Defaulted on a Credit Agreement.
                It's the fact that a customer has failed to meet the terms of a " Service Contract" not a regulated
                consumer credit agreement.
                The same applies to telephone services, gas and electricity contracts.



                • #9
                  Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

                  I read somewhere, don't know where of someone who claimed to have sued an electricity company for a wrongful default

                  I once had a late payment marker placed by a utility company which to be honest was fair enough as I was late however I had not agreed to let them share my data with anyone. Not sure if that is relevant


                  • #10
                    Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults


                    Further information on filing defaults with the CRAs can be found in the Principles for the reporting of arrears, arrangements and defaults at credit reference agencies. The principles in this document have been drawn up by the credit industry in collaboration with the ICO.

                    Any product which relates to the provision of goods or services before they are paid for can potentially be included in your credit reference file. The list below is not meant to be exhaustive but is designed to give an indication of the types of product that can be shared, including information about them for the benefit of those who might not be familiar with them.


                    An account or facility for the purchase of goods up to an agreed credit accounts limit. Revolving accounts may involve numerous purchases and repayments, whereas a budget account is repaid by constant regular amounts. Interest is charged on the credit taken.

                    Credit and store cards

                    A card allowing credit up to an agreed limit and on which a monthly bill will be generated requiring payment by a set date. Repayments are made either in full, or as a proportion of the balance owed – a minimum amount will be set by the lender and advised on the monthly statement.

                    Credit cards may be used in any outlet that accepts the type of card but store cards can only be used in the issuing store.

                    Communications (Internet services, Cable, Satellite TV, Telephones, Mobile, Fixed line)

                    This will cover all communications services which are paid for under contract or subscription. Pay as you go type products will not be included.

                    Utilities (Gas, Electricity, Oil, Water)

                    Utility accounts that are paid monthly, quarterly or annually may be included on your credit reference file. Pre paid metered accounts are not generally included.

                    Factoring (business only)

                    A way of obtaining credit against payments expected on outstanding invoices.

                    Home collected credit (consumer only)

                    Small-sum, fixed-term credits. Repayable weekly. An agent will call on the customer each week in the home to collect repayments and, where required, issue further credit . Home collected credit includes informal flexibility as standard to help debtors cope with unexpected budget pressures. In effect, the home credit agent can - during the weekly home visit - agree misses or part payments on the spot (normally at no extra cost).

                    Lease and hire purchase

                    Lease agreements such as those for cars or machinery (business) where the item is subject to monthly payments over an agreed term. Generally the goods do not belong to the individual until all payments are made.


                    Personal and business loans are paid over a set period usually with a fixed payment amount. This can also cover loans for retail purposes and insurance premiums.

                    Mail order

                    Mail order credit is generally in respect of goods purchased through a catalogue or the internet. Repayments are made either in full each month or as a percentage of the balance owed.

                    Mortgages (Commercial, House purchase, Buy to let, Second mortgages)

                    A loan, secured against property (which can be residential, buy-to-let or commercial) commonly used to purchase the property, but can also be used for a variety of other purposes including home improvements, or to raise finance for either personal or business use.

                    Pay day loans (consumer only)

                    A small, short-term loan that is expected to be repaid on the borrower’s next pay day.

                    Retail credit

                    These are deferred payment accounts e.g. buy now pay later. These are generally paid over 12 or 24 months.

                    Student Loans(consumer only)

                    Loans to pay for further education.


                    • #11
                      Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

                      Tbh, I've always found the ICO to be both fair & professional in my dealings with them.
                      CAVEAT LECTOR

                      This is only my opinion - "Opinions are made to be changed --or how is truth to be got at?" (Byron)

                      You and I do not see things as they are. We see things as we are.
                      Cohen, Herb

                      There is danger when a man throws his tongue into high gear before he
                      gets his brain a-going.
                      Phelps, C. C.

                      "They couldn't hit an elephant at this distance!"
                      The last words of John Sedgwick


                      • #12
                        Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

                        Also from ICO "lines to take"

                        CRA None credit organisations passing information to a CRA?

                        The telecoms and utilities sectors are not subject to the CCA. The following sets out the ICO’s view on utilities companies sharing information with the credit reference agencies.

                        Credit agreements are included on the credit file as well as other agreements such as telephone agreements, energy and water payments. The ICO has accepted that agreements such as utilities bills can be recorded on the credit file as in most cases the services are provided before they are paid for. There are exceptions, such as pre-payment meters, that should be handled differently.

                        The water companies use the legitimate interests condition to share data with CRAs. However, they must be clear and transparent with consumers about what they are doing with the data and the data must be accurate.

                        Sharing utilities data is a topic that consumer groups have focused on and they recognise that sharing utilities data should not cause unnecessary damage or distress to consumers. Clearly, accuracy problems resulting in the incorrect placing of a default on a credit reference file must be avoided. The Consumer Focus (now known as Consumer Futures) document below may be useful. It highlights the consumer benefits of utilities data sharing.


                        To conclude, as an office we have accepted that utility companies can pass personal data relating to outstanding payments to CRA’s as explained above. However, even though we accept that this type of activity is allowedunder the DPA, we are of course still concerned with other DPA related issues such as fairness (eg the adequacy of fair processing given to data subjects about potential disclosure to the CRAs), accuracy and the length of time the personal data are held. Therefore, if individuals believe that there are accuracy, retention or first principle concerns, they may still request an assessment of their case under Section 42 of the DPA.


                        • #13
                          Re: Information Commissioner Colluded in secret with CRAs on Utility Bill Defaults

                          I'm not sure where I have got so far, as I await a reply from the ICO, Anglian Water & Experian.

                          Right now the only information I have been given is the same as Lundy, but I am prepared to fight this in a slightly different way.

                          I am not at all happy that the ICO have acted as they have and that Anglian Water believe they can damage others with impunity.

                          So I believe a public awareness campaign highlighting Angian Water's failure to meet legal guidelines regarding water contamination during 2015 is a reasonable response in respect of customer compensation. Compensation, in my instance could indeed take the form of removal of false and misleading information they have supplied to Experian.

                          ClostridiumPerfringens was found in the Anglian Water supply, and this is a potentially lethal bacteria, but as a customer. I was never made aware of this and as far as I'm aware, neither were any other customers.

                          I was offered no discount or compensation for the sub-standard and potentially lethal product either.

                          Anglian Water never did find the source of the contamination either, which means this could easily happen again.

                          Anglian Water have made it their business to blacken my name, and I would have no remorse in starting a social media and press campaign in return to blacken theirs. At least in this instance, my reports would be genuine and accurate.

                          So right now, over and above fighting Anglian Water on the basis of what I believe to be an abuse of my personal information and UK consumer credit laws, I have sent Anglian Water an ultimatum and await their response regarding their failures and my ability to make sure the wider public are aware of them.

                          Indeed, rather than now being too upset over what Anglian Water have done to myself, I am relishing the fight and will make it a hobby to challenge them at every turn and cause them as much distress as I can, unless indeed they reply that they will remove the false information they have posted at CRA's about me.

                          I would encourage anyone who has been bullied by these utility companies to do the same.
                          Last edited by Firefins; 15th February 2016, 16:03:PM.


                          • #14
                            Did anyone get lucky with Anglian water default?


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