Clarification re overdrafts and defaults - help required

[planetparker]

Hi I am engaged in a very nasty battle with NatWest re three defaults on two loans and an overdraft. The overdraft is entirely made up of bank charges plus interest. I served them with a CCA s77 request - the two loan agreements can't be found and defaults have been removed (small victory for me after several years). However, NatWest have stated (correctly as I since discovered by reading posts on this website) that s77 does not apply to overdrafts.My question is, if overdrafts are not regulated agreements under the CCA, then can a default be registered? Natwest are refusing to remove the default on the overdraft because they say the CCA is not relevant and the overdraft is not regulated by the CCA. But I thought credit defaults can only be registered on regulated agreements? In order for a default to be registered with a credit reference agency, surely there has to be a signed agreement and repayment plan for a breach to take place? Can anyone help clarify this? I am unable to find a clear explanation of this elsewhere.Many thanksplanetparker

[rory32]

To say it isn't regulated by the Act isn't entirely true.

An overdraft is running account credit but the agreement is different for overdrafts than for other credit agreements. Section 74 of the Act allows for certain types of agreement to be excluded from part V (form and content) where the OFT has so determined. This detemination (the Determination) regarding overdrafts under section 74 was made on 21 December 1989 subject to three conditions.

 

(a) That the creditor shall have informed in writing the OFT of his general intention to enter into agreements to which the Determination will apply;

 

(b) that...the debtor shall be informed at the time or before the agreement is concluded

- of the credit limit, if any;

- of the annual rate of interest and charges applicable from the time the agreement is concluded and the conditions under which these may be amended;

- of the procedure for terminating the agreement

and this information shall be confirmed in writing.

 

© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing no later than 7 days after that 3 month period of the annual rate of interest and charges applicable.

My question is, if overdrafts are not regulated agreements under the CCA, then can a default be registered?

You seem to b confusing the two issues. There are many types of credit agreements which are not regulated e.g. most mobile phone contracts do not fall under the Act but this does not stop them registering a default for non payment. In your case you would challenge the default on the grounds that it is made up completely of charges.

[planetparker]

Hi roryThanks for coming back so quickly. I am confused about the different kinds of defaults, because I have no written agreeement for the overdraft facility and nasty natwest never actually requested me to repay it before registering the default - which makes me mad!I have started my claim for the charges and am about to start Court action so hopefully this action will sort it out instead. One more question, if part © of the determination you posted has not been complied with, could the CCA apply and if so how?Thanks again

[rory32]

To comply with the Act and for the agreement to be enforceable they must comply with the Determination. I assume you have included the removal of the default as part of your claim?

[planetparker]

Hi rory

 

Thanks for clarifying this, I think I might have them for not complying with the Act as well then.

 

I am asking for default removal as well as the charges refunded - I will let you know how I get on!