WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

I wonder if this is the meat of the matter;

35. "There may be cases in which a creditor, having made enquiries, acts reasonably in reaching the view that the debtor's assertions are unfounded."

Which follows on from the description of how HFC failed to make the enquiries necessary to establish the facts and so observe its duty of care when reporting data.

A default notified to a debtor that is substantially wrong in the sum stated could, I suppose, be considered in the same way as an unenforceable agreement in that the money claimed is not owed and that the creditor is under a duty to ensure that it is owed when the debtor says that it isn't. But by threatening the registration of a default, the creditor is setting out to injure the debtor's creditworthiness and subsequently carries those threats out.

The article on the Compass Chambers website makes the point - "The judgment is a major victory for consumers which restores power to the consumers which was intended when the 1974 Act was passed, but eroded by creditors using threats to extract sums without resorting to litigation" [my underlining]

Extrapolating further, if a debtor disputes any sum demanded then the creditor needs to establish the debt in court or between the parties before reporting adverse data - if the creditor doesn't, then it fails in its duty of care.

This might be utter drivel - just thinking aloud - please pull apart accordingly...

[mo786]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

I wonder if this is the meat of the matter;

35. "There may be cases in which a creditor, having made enquiries, acts reasonably in reaching the view that the debtor's assertions are unfounded."

Which follows on from the description of how HFC failed to make the enquiries necessary to establish the facts and so observe its duty of care when reporting data.

A default notified to a debtor that is substantially wrong in the sum stated could, I suppose, be considered in the same way as an unenforceable agreement in that the money claimed is not owed and that the creditor is under a duty to ensure that it is owed when the debtor says that it isn't. But by threatening the registration of a default, the creditor is setting out to injure the debtor's creditworthiness and subsequently carries those threats out.

The article on the Compass Chambers website makes the point - "The judgment is a major victory for consumers which restores power to the consumers which was intended when the 1974 Act was passed, but eroded by creditors using threats to extract sums without resorting to litigation" [my underlining]

Extrapolating further, if a debtor disputes any sum demanded then the creditor needs to establish the debt in court or between the parties before reporting adverse data - if the creditor doesn't, then it fails in its duty of care.

This might be utter drivel - just thinking aloud - please pull apart accordingly...

Where the debt is disputed the creditor should make some checks - just because the debtor denies it does not mean the creditor cannot report to the CRA - they just have to be sure of their position - in this case where the creditor is the third party they have to have done some checks before reporting is there is doubt/dispute - doing nothing was not enough.

I am not sure it is the same as saying a creditor must be sure every debt is not disputed before reporting - some would say it is only fair - others would say it might be onerus if thousands of legitimate defaults are registered every day/week.

A halfway house might be insisting that a debtor is told that a default has been registered every single tiem it is done - that way you wont have scenarios where peopel find out 5 months later.

[mo786]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

@Mo786 So just by way of example then, this case;

This is the credit agreement cancellation.




The credit agreement was cancelled the day after the purchase by the store (the store telephoned the creditor in front of the customer), the goods were kept and payment was made by alternative method (and she has a receipt for the payment).

The creditors though obtained a default judgment on the debtor (((which she has just had a hearing to set aside (don't know how it went as yet).)))

So her credit file will presumably have markers on and in my book, she should be entitled to compensation as the creditor didn't make reasonable enquiries if the debt actually existed.

OR can they still argue the debtor should have contacted the creditor directly rather than the supplier and relying on the supplier to cancel ?

In theory cancellation should be made to the creditor - in this case it was done via the shop. - As long as the shop actually called the creditor then I would say the agreement was cancelled.

Difficulty for the debtor is proving it - but if they can show an alternative payment to the shop the next day for the same amount then they will prob be able to prove their case on balance of probailities (unless the shop/creditor argues they went back and bought the same item again)

The question is how a default judgement was obtained - if we assume that the creditor wrote to the correct address and had no repsonse i do not think it is unreasonable for them to say no one paid the debt - for whatever reason they have no record of cacnellation.

If the debtor wins the court case then obviously the creditor will have to remove the default

I think your actual question is - what does the creditor have to do before putting a marker on and obtaining a judgement - I don't think Durkin tells us that - it is reasonable for the creditor to write to the debtor and the debtor, having received the letter disputes it - then the creditor decides whether to believe them or not. Under Durkin the creditor would be at fault if the debtor disputed a debt and the creditor did no checks at all and still recorded a default.

It is not clear from your post whether the debtor received any letetrs - I assume that as default judgement was obatiend they did not.

I assume the creditor will say they wrote to the address they had and having recd no response went to court.

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

A halfway house might be insisting that a debtor is told that a default has been registered every single tiem it is done - that way you wont have scenarios where peopel find out 5 months later.

The creditor must inform the debtor of an intent to file a default 28 days before it files it, not afterwards.

See para 41 of the Lending Code (http://www.lendingstandardsboard.org...endingcode.pdf) and Section 4 of the ICO's principles (http://www.scoronline.co.uk/files/sc...ment_final.pdf).

HTH

[Guest]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

In theory cancellation should be made to the creditor - in this case it was done via the shop. - As long as the shop actually called the creditor then I would say the agreement was cancelled.

Difficulty for the debtor is proving it - but if they can show an alternative payment to the shop the next day for the same amount then they will prob be able to prove their case on balance of probailities (unless the shop/creditor argues they went back and bought the same item again)

The question is how a default judgement was obtained - if we assume that the creditor wrote to the correct address and had no repsonse i do not think it is unreasonable for them to say no one paid the debt - for whatever reason they have no record of cacnellation.

If the debtor wins the court case then obviously the creditor will have to remove the default

I think your actual question is - what does the creditor have to do before putting a marker on and obtaining a judgement - I don't think Durkin tells us that - it is reasonable for the creditor to write to the debtor and the debtor, having received the letter disputes it - then the creditor decides whether to believe them or not. Under Durkin the creditor would be at fault if the debtor disputed a debt and the creditor did no checks at all and still recorded a default.

It is not clear from your post whether the debtor received any letetrs - I assume that as default judgement was obatiend they did not.

I assume the creditor will say they wrote to the address they had and having recd no response went to court.

Creditors a required by guidelines to give 28 days notice before registering a default, but these are only guidelines and there is no sanction for an incorrect statement of account or remedy sum,, other than the debtor must contact the creditor and get it put right. There is no statutory sanction for none compliance with the requirement to send a notice.
Of course if the creditor continues to alter false information the debtor has recourse under section 13 of the DPA or under common law, this has always been the case there is no change in this situation because of any resent case.

[ncf355]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

............................
Extrapolating further, if a debtor disputes any sum demanded then the creditor needs to establish the debt in court or between the parties before reporting adverse data - if the creditor doesn't, then it fails in its duty of care.

This might be utter drivel - just thinking aloud - please pull apart accordingly...

No,

this seems logical to me

It is no longer enough for the creditor/DCA to just say 'we disagree' and carry on reporting damaging data.

This recent issue regards the incorrect statements/notices that is supposedly leading to £MMM's of refunds to consumers will be a good test case - there are likely to be many of these where adverse data would not have been reported had interest/default charges /etc not been added where legally they were not entitled to charge these sums due to failure under the S77/S86.

[ncf355]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

I for one will definitely reopen my issues with one lender that refunded my PPI but failed to remove a default that was far less than the combination of balance and cheque refund received (cheque was for well over £1.5k, after setting the balance to £0).

They just simply said the Default was valid, and when pressed for a detailed explanation, refused.

Luckily I kept all the letters so it's going to be interesting to see how that goes.

[Guest]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

No,

this seems logical to me

It is no longer enough for the creditor/DCA to just say 'we disagree' and carry on reporting damaging data.

This recent issue regards the incorrect statements/notices that is supposedly leading to £MMM's of refunds to consumers will be a good test case - there are likely to be many of these where adverse data would not have been reported had interest/default charges /etc not been added where legally they were not entitled to charge these sums due to failure under the S77/S86.

there has always been the facility to challenge incorrectly registered data, if there is a dispute about the sum i the warning notice, guidelines say that you must take it up with the creditor, if they enter the default in spite of a legitimate complaint there is statutory recourse under the DPA and common law, this has always been the case.

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

there is no sanction for an incorrect statement of account or remedy sum,, other than the debtor must contact the creditor and get it put right. There is no statutory sanction for none compliance with the requirement to send a notice.

Well, given that an incorrect remedy sum may easily result in the debtor being unable to avoid the default (eg, when the sum is the entire balance), then the default would have been registered in contravention of s.4(4) DPA for which s.14(1) is available to the debtor, as is s.13(1). So it seems to me that there are indeed sanctions available.

The sanction for failure to send a notice would, I assume, come under the heading of "fairness", being part of the 1st principle, and so similarly is sanctionable at ss. 13 and 14.

I would question the need for the debtor to argue with the creditor over a notice -the creditor is under a duty to get his notices correct before he serves them.

What I get from the SC judgement is that the creditor is under a duty to do all these things and, as it's clearly set out in DPA anyway, it's not such a big surprise.

[Guest]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Look thee DPA says that the creditor/provider must create an an accurate record of payments. If you have a contractual obligation to make payments(on any contract, not just CCA) the creditor will report, every payment made, every missed payment and if there are over 3 missed payments he may default the account and report that. Doing this accurately is the only "duty of care" he has.

The DPA is not concerned with enforcement under the CCA or any other act, it just records payment details.

[Guest]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

http://www.bailii.org/ew/cases/EWCA/Civ/2013/108.html

this covers most of the grouund

[ncf355]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Andy, isnt that the point?

The DPA may not be concerned, but case law now is?

This seems to have put the ball in their court to ensure the agreement they are claiming you have failed to meet contractual obligations on is in fact lawful BEFORE making the report

So if the agreement states you must make X payment on X date each month, you fail to do this, but the agreement is found to be unenforceable, they still cannot report

[ncf355]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

If they are claiming you owe £2k and you have defaulted by only making a payment of £35 a month where the contract states £50 is due, but part of that £2k is taken up by interest that should not have been charged (or penalty fees, etc) to such a degree that £35 would have aqctually covere the minimum contractual payment, they would now be found in the wrong?

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Look thee DPA says that the creditor/provider must create an an accurate record of payments. If you have a contractual obligation to make payments(on any contract, not just CCA) the creditor will report, every payment made, every missed payment and if there are over 3 missed payments he may default the account and report that. Doing this accurately is the only "duty of care" he has.

The DPA is not concerned with enforcement under the CCA or any other act, it just records payment details.

The DPA requires data controllers to observe all the principles at schedule 1, not just the principle of accuracy. Creditors, as data controllers, are therefore under a duty to do so (a statutory duty, set out at s.4(4)). This statutory duty is not limited to the 4th principle, as you say.

The creditor may not report the account as in default without notice - although there is no direct sanction for not doing so, the creditor would nevertheless be in breach of the lending code and the ICO's own principles, which in turn could support a claim under ss.13 and 14.

I'm really sorry I seem to have wound you up but, for me anyway, the "duty of care" referred to in Durkin is much broader than simply reporting a payment history.

[Guest]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Andy, isnt that the point?

The DPA may not be concerned, but case law now is?

This seems to have put the ball in their court to ensure the agreement they are claiming you have failed to meet contractual obligations on is in fact lawful BEFORE making the report

So if the agreement states you must make X payment on X date each month, you fail to do this, but the agreement is found to be unenforceable, they still cannot report

I agree that the requirement for the creditor to investigate any complaint may be better complied with. But there is no new requirement, the court just said that the creditor failed to comply with existing law.

They behaved appallingly, but it does not mean that others who make errors, but in good faith and on the information provided will be sanctioned in any way.