Hi All,

I have an unsecured loan and due to redundancy have not been able to pay since January this year. Balance over £20,000 monthly payment £285. Went via CAB and proposed a token payment of £1/month in March.

Anyway all seemed well as proposal accepted - seemingly as an ongoing amount. Checked my credit file and noticed it was defaulted as of 31/7/09.

Original Creditor is AA Loans and currently dealing with Blair, Oliver and Scott (Bank of Scotland DCA).

As I had no default notice queried with Blair Oliver Scott in August, recorded delivery complaint. No reply back so today I rang to find out what had happened. BOS stated AA would have defaulted before account was passed so needed to speak to them. Rang AA and initially said default issued in April, when I asked about proof of postage came back and said that they had not issued a default but asked BOS to send one when account was 4 months and a penny in arrears.

BOS had already stated that no default had been issued so I am asking what should I do now. If they have defaulted me without sending a default notice what does that mean.

What is the best way to move forward without getting into trouble. They accepted £1/ month without any fuss so I really do think they have done the right thing. What options are open and what advice would people give

:)

Many thanks

Mike

Hi,

I think you will need to get all that has been said in writing as they will deny everything that has been said otherwise.

As I see it, you could demand they remove the default but then there is nothing stopping them issueing another one (properly)

I presume they haven't terminated the account.....as Foxy has said they can issue one whenever they like, if they terminate and then issue a DN, then it would be an unlawful recission of contract.

On the phone both AA Loans and BOS stated the account was terminated but I do accept the only evidence of this is my credit file. AA stated that they terminate/default when an account is 4 months in arrears. As I was paying £1 a month this occurred when the July payment (5th) was missed. So they action-ed the default early July. However rather than send a default they stated they asked BOS to send it.

Date of default 31/7/09 on credit file, which fits with the dates stated by AA Loans.

How can I get this in writing without them trying to cover it up, they are no doubt aware of an issue following my phone calls yesterday asking when the default was issued.

You could try and SAR each company but to include all call transcripts (you may need to give them dates of calls)

With a little luck, any screenshots may show what they have done with the account

Thanks, seems sensible to request what they have so Subject Access request to both. £20 but may turn out to be worth it.

OK, so they have now gone into cover up mode and I need advice as something seems wrong. I received the attached letter which now confirms they die not send the default and low and behold they have sent another.

What a shame I alerted them to the error, silly boy. Is there anything worth trying nor. I am obviously going to complain but feel as though they will cover everything up.

:eek:personal details been left on Boro!!!

First off you dont say anywhere that you've checked that the agreement is enforceable - is it?

Unless they terminate, they can issue a DN when they like

and

Dont ALWAYS assume that there has to be a default notice issued for a default to be placed at a CRA. CRA's are commercial entities that tend to do what their customers want to be done.

I've unapproved the offending post, could you re-post without the personal details

Thanks for the 'heads up' mandyjayne.

Oops

Oops, think I'll ask if they would consider a write off in the circustances. Re the agreement it is valid apart from I believe it should be a multiple agreement as it paid off a previous loan.

In one sense a shame as they accepted my pound a month but its not as if they need the money really.

AAResponse.pdf

They confirmed the account was terminated when I first asked the question in October. As I said at first, reply now confirms no default was issued at this time. As I was made redundant and have nothing to pay I am going to simply write and ask the account be written off in the circumstances. Nothing to lose I guess!

Just to Update everyone - AA issued proceedings on this and I had a no win no fee solicitor defend

RESULT : Feb 2012 claim discontinued.

Great as balance was still over £20Ka

Thanks for the update and very well done.....can you tell us a little more about why they discontinued or what they did wrong ?

As above - they issued proceedings without a default notice. The agreement should also of been a multiple agreement but it was not. I have not seen the defense put forward as I was just happy to see this disappear!

Extract from dispute letter below:

"I am writing in response to your letter dated 9th November 2009 which now confirms in writing that no default notice was issued at the time our account with AA Personal Finance was terminated. Before your letter we could not be sure this was indeed the case and I thank you for confirming this in writing. Without being sure I felt it would not be wise to dispute the debt in case, for example the notice was simply lost in the post. Now your letter has made clear no default notice was issued we formally dispute the debt and we no longer offer token payments. This letter should clarify why we feel this is reasonable in the circumstances and propose a solution to this issue in both our best interests.

The consumer credit act makes it clear that a default notice is required when an account is terminated. Both AA Personal Finance and Blair Oliver and Scott made it clear on 27th October that the agreement had been terminated. This was also a matter of record with the Credit reference agencies for some months before this. What appears beyond any doubt now is that the account was terminated by AA Finance sometime in March 2009 without a default notice being issued. Your letter now serves as written confirmation of this and as a result finally clarifies what actually happened.

Therefore AA Finance terminated the agreement unlawfully at or around March 2009. Under elementary contract law in England AA Finance become the contract breaker and we are the injured party. As a result we have the option to accept the termination and recover damages. It is worth noting the following case in support of this position. In Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007], Lord Bingham said:

'The repudiation of a contract by one party ("the repudiator"), if accepted by the other ("the injured party"), brings the contract to an end and releases both parties from their primary obligations under the contract. The injured party is thereupon entitled to recover damages against the repudiator to compensate him for such financial loss as the repudiator's breach has caused him to suffer. This is elementary law.

For clarity we ACCEPT THE CONTRACT TERMINATION given the circumstances.

So what does this mean, well the agreement is terminated now and as a result neither of us bound by its obligations. In addition you cannot now correct this by the issue of a Default Notice which you appear to be trying. There is no longer any agreement between us on which to serve such a notice. The only debt which we possibly now legally owe as a result is the arrears when the account was terminated. In your letter you states this is £581.34, which may or may not be correct.

Moving on from this I would ask you now to review the original agreement. The agreement may be unenforceable anyway as it is not set out as a multiple agreement. This is required by the Consumer Credit Act 1974. Part of this loan was kept by AA Finance to clear our previous loan. This means this was a multiple agreement and the original agreement was therefore wrongly drawn up. This in itself means it is also questionable whether a court would be able to enforce the arrears owed at the time of termination, namely £581.34.

Bearing in mind both these issues and in an attempt to save time, effort and future costs I ask you give serious consideration to the following simple resolution. Write off this account and remove all details of the account from the credit reference agencies."