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Seeking views on the strength of a FOS referral challenging a default registered by Amex. Amex has issued its final response rejecting the complaint. Interested in whether the grounds hold up and whether there are angles I'm missing.
Timeline
The original complaint
The complaint raised three grounds. First, no valid Section 87 default notice was served before the default was registered. Second, no 28-day notice of intention to register the default was given as required under the SCOR Principles. Third, the default was registered while Amex's own appointed collection agent was actively engaged in negotiations, with a payment arrangement in place and a live settlement offer on the table.
Amex's final response
Amex rejected the complaint. It stated the Section 87 notice had been served (pointing to the notice described above). It argued that the default notice and the Final Demand gave prior warning of possible default registration. It stated the default was correctly reported because the account was 210 days overdue and that discussions with collection agents do not prevent the account from ageing.
Where I need views
Having reviewed the documents, several questions arise and I'd welcome the forum's perspective.
The Notice of Variation (Letter B) appears fundamentally incompatible with the termination (Letter A), and both were issued on the same date. Can Amex terminate an agreement and simultaneously vary its terms to help the customer meet ongoing obligations? If the variation implies the agreement continued, would the original Section 87 notice be spent, requiring a fresh notice before any subsequent default registration?
The Section 87 notice characterises non-payment as a non-remediable breach. Is that characterisation correct given that arrears can ordinarily be remedied by payment? If not, does this render the notice defective under Section 88(1)?
The 28-day SCOR notice was contained in the Final Demand, but approximately six months elapsed between that letter and the actual default registration. During that period, a payment plan was established and a settlement offer was made through Amex's own agent. Can a 28-day notice remain effective across that gap and those intervening events?
Are there any additional grounds or arguments worth considering that I haven't identified?
Happy to share redacted documents if helpful.
Many thanks
Timeline
- 2 May – 1 July 2024: Standard Breathing Space moratorium in place. Amex notified via the Insolvency Service.
- 24 July 2024: Amex issues a Section 87(1) default notice. The notice characterises the breach as non-remediable, stating "there is nothing you can do to remedy this breach."
- 10 August 2024: Amex issues two letters on the same date. Letter A is a "Final Demand and Notice of Termination," terminating the agreement with immediate effect, demanding full payment (c. £22k), and stating steps may be taken to register a default after 28 days. Letter B is a "Notice of Variation," reducing interest to 0%, stating Amex understands the customer is experiencing financial difficulties and wishes "to help you meet your obligations," and confirming referral to a specialist agency.
- August 2024: Account referred to collection agency (CA1).
- 5 September 2024: CA1 writes following unsuccessful contact attempts, requesting the customer make contact.
- November 2024: Payment plan established with CA1.
- 10 December 2024: Payment returned due to insufficient funds.
- 28 December 2024: CA1 writes requesting a review of the payment plan to ensure affordability.
- 8 January 2025: CA1 issues a written settlement offer.
- 14 February 2025: Default registered on credit file.
- 21 February 2025: Amex letter notifying referral to a second collection agency (CA2), dated a week after the default was already registered.
The original complaint
The complaint raised three grounds. First, no valid Section 87 default notice was served before the default was registered. Second, no 28-day notice of intention to register the default was given as required under the SCOR Principles. Third, the default was registered while Amex's own appointed collection agent was actively engaged in negotiations, with a payment arrangement in place and a live settlement offer on the table.
Amex's final response
Amex rejected the complaint. It stated the Section 87 notice had been served (pointing to the notice described above). It argued that the default notice and the Final Demand gave prior warning of possible default registration. It stated the default was correctly reported because the account was 210 days overdue and that discussions with collection agents do not prevent the account from ageing.
Where I need views
Having reviewed the documents, several questions arise and I'd welcome the forum's perspective.
The Notice of Variation (Letter B) appears fundamentally incompatible with the termination (Letter A), and both were issued on the same date. Can Amex terminate an agreement and simultaneously vary its terms to help the customer meet ongoing obligations? If the variation implies the agreement continued, would the original Section 87 notice be spent, requiring a fresh notice before any subsequent default registration?
The Section 87 notice characterises non-payment as a non-remediable breach. Is that characterisation correct given that arrears can ordinarily be remedied by payment? If not, does this render the notice defective under Section 88(1)?
The 28-day SCOR notice was contained in the Final Demand, but approximately six months elapsed between that letter and the actual default registration. During that period, a payment plan was established and a settlement offer was made through Amex's own agent. Can a 28-day notice remain effective across that gap and those intervening events?
Are there any additional grounds or arguments worth considering that I haven't identified?
Happy to share redacted documents if helpful.
Many thanks