Wrongful Default applied to credit file when payments were made as Normal

[Gemmag]

Hi I would like some advice please if anybody could help I would be most grateful.
I was made redundant in 2012 and fell behind with a payday loan that was eventually pursued by portfolio recovery aka Mackenzie hall debt collectors.
In October 2013 I started a payment plan in order to pay this debt back and I have monthly payments taken out and have not missed a payment to date. However I applied for a credit card with my bank a few weeks ago and was advised that I have been refused due to the 2 default payments on my credit file from portfolio recovery for May and June 2014. I was totally shocked as I know my payments go out monthly and so I checked my bank statement and the payments had been taken as usual. I was furious and emailed them immediately and told them how my payments had been taken as well as a copy if bank statement showing the payments had been taken so how on earth can I have been defaulted for May and June? They apologised and said they would look into it and after many exchanges emails and phone calls my complaint was sent to the compliance department. In my letter I explained how all of this unnecessary stress and anxiety was effecting me and also the bad reputation and embarrassment this has caused me with my bank and requested that I should be compensated in some way for all the distress it has caused me, not mention the time consuming task of sending complaints, phone calls and sending credit files.
what I would like to know is would I be in my rights to request not only for the defaults to be deleted but compensation as well?

[Gemmag]

Re: Wrongful Default applied to credit file when payments were made as Normal

Have I posted my question in the right forum?

[Nibbler]

Re: Wrongful Default applied to credit file when payments were made as Normal

Have you checked your credit files to see what is actually on them?

From the circumstances you describe, the account should really have been marked as a default when you failed to pay back under the agreement, or at the very least once it had been passed to debt collectors. It would then be marked as a D for default or an 8 every month regardless of any payment plan you negotiate with collectors.

Assuming you do have a default recorded, then it could be very hard to argue against the fact of a default being recorded in itself, as you did break the original loan agreement and it was passed to collectors. Both a fundamental indicator of a default, and one where the ICO is clear that it justifies recording a default on your credit files.

However, if they have only just registered a default it may be possible to argue that they should have done that well before now and have it backdated, meaning the 6 years for it to sit on your file would start much sooner.

Really need to know or see exactly what is on your credit files though.

[Gemmag]

Re: Wrongful Default applied to credit file when payments were made as Normal

Thank you for your reply.
The original default was not on my credit files as I checked with quite a few different credit file agencies and somehow appeared out of the blue in June 2014 only for May and June with a red 8 symbol. I have been speaking with the debt company who have admitted fault and are looking to get it removed as stated that the default should of been applied to my credit file at the time the account previously defaulted which was what you said.
Would I be in my rights to request some form of compensation for the hassle they have caused on me obtaining credit with my bank? I have wasted so much time trying to sort out this default that should of been applied to my account when the debt originally defaulted and it has causes me so much stress and worry. As I said the debt company have admitted that the defaulted payments for May and June have been applied by mistake.

[Gemmag]

Re: Wrongful Default applied to credit file when payments were made as Normal

Have you checked your credit files to see what is actually on them?

From the circumstances you describe, the account should really have been marked as a default when you failed to pay back under the agreement, or at the very least once it had been passed to debt collectors. It would then be marked as a D for default or an 8 every month regardless of any payment plan you negotiate with collectors.

Assuming you do have a default recorded, then it could be very hard to argue against the fact of a default being recorded in itself, as you did break the original loan agreement and it was passed to collectors. Both a fundamental indicator of a default, and one where the ICO is clear that it justifies recording a default on your credit files.

However, if they have only just registered a default it may be possible to argue that they should have done that well before now and have it backdated, meaning the 6 years for it to sit on your file would start much sooner.

Really need to know or see exactly what is on your credit files though.

Thank you for your reply.
The original default was not on my credit files as I checked with quite a few different credit file agencies and somehow appeared out of the blue in June 2014 only for May and June with a red 8 symbol. I have been speaking with the debt company who have admitted fault and are looking to get it removed as stated that the default should of been applied to my credit file at the time the account previously defaulted which was what you said.
Would I be in my rights to request some form of compensation for the hassle they have caused on me obtaining credit with my bank? I have wasted so much time trying to sort out this default that should of been applied to my account when the debt originally defaulted and it has causes me so much stress and worry. As I said the debt company have admitted that the defaulted payments for May and June have been applied by mistake.

[Nibbler]

Re: Wrongful Default applied to credit file when payments were made as Normal

To be honest if they are going to remove them rather than reapplying or backdating them as they are entitled to do, then that is a bit of a result anyway. I would be happy with that.