No Default Notice Recieved

[ncf355]

Re: No Default Notice Recieved

Hi,

it seems they are both being idiots

There are 2 options here:


1) ICO

2) Court

Whilst court may produce an award of damages, there is much debate on here about whether all damages claimed would need to be quantified (such as, the default caused me to incur an increased mortgage rate, costing me £X more per month than that I could obtain with a clean file), or whether there is clear grounds for general damages as found in:

Durkin v DSG
Khopraror
King v British Linen

(see the Durkin v DSG thread on here to see how the debate continues)

I'm reluctant to start anyone down a path that I'd have to think long and hard about myself - it may be worth waiting a few months to see if anyone else takes the plunge on this?

Though it does have to be said that this would be small claims, so your outlay is likely to be reserved to court fees to issue the claim and and related applications etc - I cant see how any judge would argue your right to bring a claim when they are lacking so much care in their approach to your file.


Beyond that we have the ICO - they obtained results for me, but like any other government department, they are under manned for their tasks and hence very slooooooooooow - it took me 6 months to get a Default removed, which is somewhat far from ideal IMHO




Take a look through the info above and view the Durkin v DSG thread so you can see all the arguments for and against court action then post back here

:tinysmile_hmm_t2:

[ncf355]

Re: No Default Notice Recieved

Hopefully goes without saying - make sure you keep all the letters from them safe, and also keep printed copies of the letters you sent them and the proof of postage

[ExeCute]

Re: No Default Notice Recieved

Hopefully goes without saying - make sure you keep all the letters from them safe, and also keep printed copies of the letters you sent them and the proof of postage

I received final details from the Financial Ombudsmen regarding the default date below, it seems it is not good news. Can you take a look and tell me if this is correct in your eyes ?

Dear Mr Shearing

I am writing further to our telephone conversation. I asked MBNA some more questions about your case. I was not sure whether the default should have been registered when it was. However, MBNA’s response does not seem unreasonable and I think that the default was registered correctly.

In 2008, MBNA, in response to your financial difficulties, agreed a formal repayment plan on your credit card account. Your credit card account was re-aged and the arrears were removed. The statements were showing that the minimum payment was £31.00 a month. This was enough for the balance to be repaid within 10 years, which was MBNA’s policy at the time for accepting formal repayment plans without defaulting the account.

In 2010, you submitted another income and expenditure form and your offer decreased slightly to £29.46. While I accept that the difference between £31.00 and £29.46 is minimal, MBNA’s policy changed and the formal agreements were only being accepted if the debt was to be repaid within 5 years. I must add that 5 years is a usual benchmark across the industry at the moment. At that stage, your balance was around £2,700. In order for the balance to be repaid within 5 years, you would have to pay £45.00 a month, which is a lot more than what you offered.

While it looked like the slight decrease in your payments (from £31.00 to £29.46) caused the account to default, this change needs to be combined with the fact that the balance needed to be repaid within 5 years. Those two factors made the offer unacceptable and at that point MBNA registered a default on your account.

Like I mentioned, the account was factually in default and the only concerns I had were, whether the default was registered at a correct time, and not whether it should have been registered at all.

Having considered the above, unfortunately, it looks like the default should have been registered when it was, in 2010. I regret, but I am not in a position to ask MBNA to backdate it or remove it.

If you have any questions, please get in touch with me by 5 June 2014. As we explain in our leaflet, your complaint and the ombudsman, consumers have the right to ask the ombudsman to review their case – as the final stage in our process. But if I do not hear from you by 4 June 2014, I will take it that you have decided not to pursue the complaint further.

Yours sincerely

xxxxxx
adjudicator
Financial Ombudsman Service

[ncf355]

Re: No Default Notice Recieved

No, it doesn't sound quite right to me

It all depends on the terms and balance

If they state 5% of the balance is the minimum repayment, and your balance is £1,000, any payment under £50 per month is in effect a default on the agreement

So, it's down to the facts - were you paying the minimum payment as required by the terms in 2008?

IMHO, they should register the Default from within 3 - 6 months of the date you failed to maintain the minimum payment required by the agreement, anything else is inaccurately prolonging the default - and the ICO themselves state this (though in different words) in their Default guidance document.

TAKEN FROM ICO GUIDANCE ON FILING DEFAULTS
VERSION 3
02.08.2007

11.

Time framework

Although there will be some flexibility in the definition of a breakdown, we
believe there should be general rules for the minimum period of arrears
which should exist before a default can be filed. Equally there should be
a maximum period after which, if anything is to be recorded with a credit
reference agency, a default must be filed. The following are in line with
the practices currently adopted by most lenders.


 Accounts should not be routinely filed as being in default where full
payments or those due under a rescheduled agreement are fewer
than three consecutive months in arrears.

 Accounts should normally be filed as being in default where those
payments due have not been received for six months.




21.

'An arrangement to pay'

If a customer fails to return to contractual payments after an
‘arrangement to pay’ has expired, then the lender can file a default
immediately, as long as this would not place the customer in a worse
position than they would have been in, had they not made the
arrangement.

I suggest you point this out to the adjudicator and ask them why their opinion is in direct contravention to their own guidance to lenders.

[ExeCute]

Re: No Default Notice Recieved

Hi Anna,

I appreciate your help on this case but I must argue a point here.

You said : “In 2008, MBNA, in response to your financial difficulties, agreed a formal repayment plan on your credit card account. Your credit card account was re-aged and the arrears were removed. The statements were showing that the minimum payment was £31.00 a month”

This is not correct. In 2007 my minimum payments on the balance of approximately £3500 was over £70 a month. I could not keep up with this and requested an agreement for around £31 and that was the agreement noted on the statements. This is the initial breakdown of the contract and the date it originally began.

The contract/agreement between me and MBNA was broken in 2007. I also refer to section 21 pasted below under an arrangement to pay.

TAKEN FROM ICO GUIDANCE ON FILING DEFAULTS
VERSION 3
02.08.2007

11.

Time framework

Although there will be some flexibility in the definition of a breakdown, we
believe there should be general rules for the minimum period of arrears
which should exist before a default can be filed. Equally there should be
a maximum period after which, if anything is to be recorded with a credit
reference agency, a default must be filed. The following are in line with
the practices currently adopted by most lenders.

Accounts should not be routinely filed as being in default where full
payments or those due under a rescheduled agreement are fewer
than three consecutive months in arrears.

Accounts should normally be filed as being in default where those
payments due have not been received for six months.

21.

'An arrangement to pay'

If a customer fails to return to contractual payments after an
‘arrangement to pay’ has expired, then the lender can file a default
immediately, as long as this would not place the customer in a worse
position than they would have been in, had they not made the
arrangement.
Your own guidelines state I should not be put in a worse position after had I entered an agreement.

Await your response,

Kind Regards,

Paul Shearing

[ExeCute]

Re: No Default Notice Recieved

Ombudsman's reply :-

Dear Mr Shearing

I must disagree. Your account was re-aged and you entered into an arrangement with MBNA. I would not say that this was a relationship break down.

The relationship broke down at a stage where MBNA was unable to accept your offer any more. That happened in 2010 when your offer decreased and the time frame changed from 10 to 5 years.

As much as I appreciate that it is obviously frustrating for you, there is nothing I could go back to MBNA with.

[ncf355]

Re: No Default Notice Recieved

Tell him you disagree and you want your complaint escalated to an ombudsman

From what I see, you didn't decrease your offer, did you?

[ExeCute]

Re: No Default Notice Recieved

Tell him you disagree and you want your complaint escalated to an ombudsman

From what I see, you didn't decrease your offer, did you?

It was all done via a 3rd party.

In 2007 the arrangement was £26
in 2008 I increased it to 28
in 2009 it went to 31.

it seems in 2010 my 3rd party company offered 29.66 instead.

So actually in answer the 2010 offer was less than 2009.

[ncf355]

Re: No Default Notice Recieved

As I see it, the default is STILL inaccurate - you agreed to pay X, you defaulted on this agreement in 2007

That is what the date should relate to

[ExeCute]

Re: No Default Notice Recieved

Replied with this :-

Hi Anna,

The fact of the matter is that the contractual agreement for this credit card was broken in 2007, the contract stated I needed to pay a larger amount and this was broken ever since the end of that year. Even if we entered into an agreement the original contract which I am being defaulted on was broken in 2007.

I cant see how this can be argued, I had a credit card contract in 2007 asking me to pay in excess of £70 a month and I was only paying £26 per month. This is the point of the breakdown of the contract, I cannot see how it can be seen that 3 years later the breakdown occurred.

Would it be possible to escalate this to the Ombudsman and forward also these email discussions to him/her for a final decision ?
Again I appreciate you time in this matter,

Kind Regards,

Paul Shearing

[ExeCute]

Re: No Default Notice Recieved

Just an update.

The adjudicator called me with a change of heart. She said shes been thinking about the case after it came to light from speaking to MBNA that in 2010 the reason the default was issued was that they changed their terms from 10 years to 5 years to clear debts.

She says this was not advised to me and thinks this is best way my case will work and she will be upholding my complaint to have the default removed.

She noted that MBNA will no doubt contest this and it will be put forward for a decision anyway.

Im unsure if this is good news or not but im willing to roll with it.

[ExeCute]

Re: No Default Notice Recieved

Today the Ombudsman confirmed MBNA have agreed to remove the default. Thought this day would never come. Thank you for your help.

My main aim was to get this removed and not financial compensation, but after all the grief they have given me would you think this is worthwhile pursuing?