Moneybarn refusing to default account

[Johndenver]

Good Afternoon,

I have another thread up here for a separate issue, which has inspired me to sort the rest of my affairs out. But I would be grateful for some advice as to the legality of Moneybarn's conduct.

I voluntarily terminated an agreement with Moneybarn and there was £7k left to pay to reach half the agreement.

I was 3 months in arrears when I took the Voluntary Termination option and no payment has been made to the account since December 2019. However they have not defaulted the debt. They have sent no default notice and they are currently chasing through Moorcroft.

After checking my credit record they have updated it as "no payment due/u" for the past 19 months.

Now I don't have an issue with this per se. Although I am not sure if this is against the ICO guidelines for accurate reporting.

However I now want to enter into a repayment arrangement with them. This is likely going to take about 5 years to pay off, and they are obviously then going to start adding "AP" markers to my file, which is as bad as a default I understand in the eyes of other lenders, but this will drag on for much much longer than 6 years from the date of default. I have written to them and asked them to default the account. But they refused. Saying that they have their own internal processes for when an account is in default.

So is it legal for a company to continue to report "no payment due/unclassified" to the CRA's for several years and then add a default whenever they feel like? Probably just before it becomes statute barred for maximum damage to the debtor.

Have you any suggestion as to how I would go about getting this resolved? I have told them I am not making any payments to the account until they add a correctly dated default to my credit file, and instead will put a token payment in a savings account each month.

Would be grateful for your advice.

[neon989]

Did you everr get to the bottom of this as I am in the same boat and wondering what to do?

[Johndenver]

Hi Neon,

Made a complaint with them about this and they said in essence they are not allowed to negatively impact your credit report due to a voluntary termination so this is why the debt is not defaulted. Basically unless it goes to court they leave it in limbo so no missed payment markers will ever be added after the date of VT.

It will continue to show as a balance with no payment due on credit report. In my case I just set up a standing order to them at £30 a month and ignored moorecroft. Eventually moorecroft handed it back to moneybarn and no further action. My balance reduces every month on credit report but no missed payment markers. I got this in writing from them before I started the payments. Might be worth making a complaint.

Only issue I can see with it is if they don't ever default it how will it ever get statute barred? Also does the negative impact that they are not allowed to have on your credit file extend extend to CCJs? If it does then there is literally no incentive to pay. I didn't want to find out though and otherwise its quite nice that its not a default or late payments imo.

[neon989]

Hi John. Thanks for getting back to me promptly. Yes your scenario is exactly the same as mine! I haven't yet done anything about it other than made a dispute with the CRAs about the information being factually incorrect as it is in fact a defaulted debt. Of course the were rejected hence me coming here to see what the next steps would be. Based on what you've said though these are my thoughts and I have no idea where to go about how to address them if this is what they have said to you.

I recently applied for car finance due to being in a much better position. I was told by then lender they could see outstanding car finance that would need to be paid first. So was unable to proceed further. This is certainly an impact but if the debt was shown as defaulted in 2017 which is the correct default date then I would know in 2023 it would drop off my report. The problem with the current situation is that until the debt is settled which with the current payments I'm making is going to be 10 years from now. Which means that it will stay on my report for another 10 years while I'm making payments then a further 6 years before finally being removed! 16 years impact is not something in my eyes that is not something that seems right? Further to that this gives them the power to ccj me/you at any point in time they see fit which again is bad news for us.

Further to that. All other debts that I have had have been sold on the debt collectors have all been defaulted which means that you have an end date for everything to end.

It just doesn't seem right in my eyes because we are going to carry this with us until the final balance is settled. Whether it's done in 10 years or less. Whenever the balance is paid at that point it will remain as a settled account but for a further 6 years.

[theberenger]

Only issue I can see with it is if they don't ever default it how will it ever get statute barred?

The debt will never become statute-barred, because you're paying towards it. A debt becomes statute-barred on the 6th anniversary of its default if the recipient of the loan has not acknowledged the debt and no payments have been made in respect of it between its default and 6th anniversary.

That doesn't apply to you. Even if they had placed the default, you said you were paying £30 per month towards it, which has the effect of acknowledging the debt is owed. That acknowledgement entitles the lender to continue pursuing you for the debt beyond the 6 year statute threshold.

Unfortunately, I suspect you may have shot yourself in the foot by setting up that standing order. In hindsight what I think you would have been better doing is sitting tight until the 6th anniversary passed, then engaging with Moneybarn to either have them correctly record the default with its date in the past, or taking an action against them to have the debt struck from the credit report. They can't continue to record the debt as 'nothing owed' after it's been statute barred, they can only do that against debts that are enforceable, anything else you could take action against.

As the debt is alive and well, you might as well make the most of it and calculate how much they've charged you over the years for late payments, admin fees etc, none of which are enforceable and you can recover. I'll bet a substantial chunk of what you owe is made up of unenforceable charges.