Help with Kensington mortgages

[Gettingolder]

Re: Help with Kensington mortgages

I thought that I would give you a update. I wrote to Kensington, they are now investigating the complaint. One thing to note is that they have not updated my credit file with a number 6. They have told me that they will respond within 40 days, this will be up on the 26th. I am wondering whether I wait for their response or do I go straight to the ICO and FOS?

[stevemLS]

Re: Help with Kensington mortgages

I would give them their 40 days, you show then that you have acted reasonably.

[Gettingolder]

Re: Help with Kensington mortgages

Thanks stevemLS, I will wait until the 26th. At least they have stopped updating my credit record even though they have not defaulted it yet.

[Gettingolder]

Re: Help with Kensington mortgages

So Kensington have written back stating that they will not default the account because when the house was repossessed there was not enough equity to cover the balance owing on the account. The letter says:

No further payments were made after December 2008. Where the arrears balance equals or exceeds the value of one contractual monthly payment at the end of any month, we submit information to the CRA's which details the number of outstanding payments. If more than 6 CMPs have been missed, your credit profile will still only refer to six missed payments as we do not report arrears in excess of this level.

We first began reporting the arrears to the CRA's in February 2008, and first began reporting six monthly arrears from November 2008. After this, the arrears continued to increase but as we explained, we reported six months of arrears each month.

Your property was taken into possession by first charge holder ge money home lending. Ge money then sold the property in its capacity as mortgagee in possession on 15 December 2008. We received initial notification of this on 11 January 2010 and then confirmation on 17 February 2010 that there were no surplus funds following the sale. This resulted in a shortfall. The loan account was closed on 24 February 2010 but the shortfall remains outstanding.

I believe that some confusion has arisen over the difference between the use of reporting monthly payments in arrears and the recording of a default so I seek to provide some clarity.

The ico guidelines you refer to with regards the recording of a default, includes long term secured loans such as this loan in the exceptions to the usual guidelines. With long term secured loans it is standard practice not to record a default until such time as the property is taken into possession. As GE money took possession of the property and not Kensington, we did not record a default with the CRA and were not required to do so. However, this does not affect our ability to continue to report accurately on the extent of the arrears.

We currently report a balance outstanding of £4573 along with six monthly payments in arrears reflecting the balance on your account and the absence of payments. The guidance you refer to states that lenders should not report this instead of a default when this does not reflect the real payment history. We consider that the information reported and continue to report, accurately represents your payment history and the debt currently owed.

I am not really sure of my next move, any help would be appreciated.

[Gettingolder]

Re: Help with Kensington mortgages

A point that does stand out is that they said that they closed the loan account in February

[Gettingolder]

Re: Help with Kensington mortgages

Anyone there? Lol

[stevemLS]

Re: Help with Kensington mortgages

Sorry, didn't spot this yesterday.

As I read the current ICO guidance they do say that secured loans may be an exception, but they also say what should happen when an account is closed. Have a look through it http://www.scoronline.co.uk/sites/de...ment_final.pdf

Why not have a word with the ICO helpline 0303 123 1113 (local rate) or 01625 545 745 if you prefer to use a national rate number.

[Gettingolder]

Re: Help with Kensington mortgages

Hi Steve, I will give them a call tomorrow.

[Gettingolder]

Re: Help with Kensington mortgages

I have just spoken to the ICO and they think that I have a case and have asked me to submit all documents to them....fingers crossed

[stevemLS]

Re: Help with Kensington mortgages

Excellent, keep us updated.

[Gettingolder]

Re: Help with Kensington mortgages

All docs posted, I will let you know how I get on

[Gettingolder]

Re: Help with Kensington mortgages

Hi, I thought I should give a update. The ICO will be looking at the case over the next couple of days. It is sounding positive but I have a feeling that even if the ICO rules in my favour that Kensington will not default the debt. Can anyone advise what the next steps should be, if they ignore the ICO ruling?

Here is the last correspondence sent from Kensington:

I am writing further to a letter received from the ICO dated 4 February 2016. I understand that you have raised concerns with the information Kensington has provided to the Credit Reference agencies regarding the above account. In their letter to us, they have confirmed you are concerned that we have not recorded a default against the above account with the Credit Reference Agencies and we continue to report the account as 6 month in arrears, with a balance outstanding the account has been closed. The ICO have requested that we write to you about this matter and provide a copy of our response to them. In the circumstances, I would refer you to our letter dated 28 October 2015. This letter provided an explanation of the actions undertaken on your account and the information that reported to the Credit Reference Agencies. We confirmed that, as we had not taken possession of the property, we are not required to record a default on this loan. We believed that we were correctly reporting data to the Credit Reference Agencies as a shortfall balance remained outstanding and we would continue to do so until the debt has been settled, with respect to your assertion that the account is closed, we can confirm that, whilst we have removed our charge over the property, it is not the case that the matter is closed as a shortfall balance of £xxx remains outstanding. This will be the case until the outstanding balance has been repaid. Further to this response, I feel it beneficial to explain that, under the rules and agreement of reciprocity (a mutual agreement to exchange information), we are obliged to provide accurate data to the Credit Reference Agencies that other lenders and users are able to rely on. The data remains on a person's credit file for a period of 6 years and this position is supported by the Information Commissioner's Office. If Kensington was to remove this data, it would not provide an accurate reflection of your credit history for the last 6 years. Therefore, Kensington would only consider removing data from a customer's credit file that is factually incorrect. In the circumstances, we are satisfied that the correct information has been provided to the Credit Referencing Agencies in relation to your account and we are therefore unable to consider amending this information.

[Gettingolder]

Re: Help with Kensington mortgages

And here was my response:


I feel that i should follow up my previous letter to confirm why i have a case for you to remove the entry on my credit file. The information bellow has been taken directly from Data Protection Technical Guidance “filing defaults with credit reference agencies” and is issued by the ICO. I have highlighted the relevant text that applies to my case. I will also forward this response on to the ICO for their records.


4 It is an accepted industry standard to record only serious ‘defaults’ with credit reference agencies. The term ‘default’ on credit reference files is used to refer to the situation when the relationship between the lender and borrower has broken down. A record showing a series of payments as six months in arrears when this does not reflect the real payment history should not be used as an equivalent of a default. Where a code is used to describe a default or variation in payment, it should always be accompanied by an explanation in plain and intelligible terms which informs the reader of its meaning


If meaningful information is to be reported to credit reference agencies there needs to be a consistent approach by lenders that also needs to take account of the practical problems they face. This is also necessary to treat all customers in this situation fairly. Consequently, a lender should file a default no later than six months after the date of a successful court application to proceed with possession


10 Indicators of a default

The account has been referred to a collection agency or in-house debt collection department.
The account has been referred for legal action.
The account has been included in a bankruptcy, IVA, or similar.
The asset financed has been repossessed or instructions for repossession have been given.
The lender takes or has taken steps to cut off the service provided (or would do so if they were not prevented on social rather than commercial grounds or by other regulations, codes of practice or statute).
The customer has not made satisfactory proposals in response to a demand for repayment.
The customer has given a clear indication, for example, by handing back an asset, that they do not intend to meet their contractual obligations.
The lender has evidence that an account has been opened or used for fraudulent purposes by the applicant.

“
14 Long-term secured loans

Although long-term, secured loans, such as mortgages, are likely to involve monthly repayments, they are an exception to the general standard. The existence of a secured asset which, if repossessed, will indemnify the lender, and the length of the term involved, distinguish this category from the majority of products. This may mean that the lender is prepared to allow the customer greater latitude if the account gets into difficulties. A lender may decide that, even though one or more of the above indicators has occurred or more than six months has passed without a payment being received, there is no breakdown until they have decided to take possession of the asset. Nevertheless, there are practical problems facing lenders in these circumstances because in some cases, even after court action to gain possession has been taken, a customer will go on to repair the relationship by starting again to pay on a regular basis the contractual sums (or at least an agreed compromise sum that would constitute a variation in payment terms as indicated in paragraphs 17 -23).

If meaningful information is to be reported to credit reference agencies there needs to be a consistent approach by lenders that also needs to take account of the practical problems they face. This is also necessary to treat all customers in this situation fairly. Consequently, a lender should file a default no later than six months after the date of a successful court application to proceed with possession unless
the customer has made reasonable and agreed arrangements to repay,
the lender can justify not filing a default on an exceptional basis. For example, the lender is fully informed of the circumstances and knows that payments will start again, or
the loan has been included in a bankruptcy in which case the default should be filed in accordance with the guidance in paragraphs 47 – 48.
In rare circumstances the court can grant possession on conditions that delay physical repossession for a long period of time, even though the customer is not making an acceptable agreed level of repayment. This is usually on compassionate grounds. In these circumstances the lender should record a default within the six month period of the order date.

[Gettingolder]

Re: Help with Kensington mortgages

The good news is that the ICO have ruled in my favour. What options do I have if they refuse to update my credit file?

[Gettingolder]

Re: Help with Kensington mortgages

Can anyone help me, it looks like I will have to take them to court. Does anyone have any idea of how I can start proceedings?