Invalid Default Notices

[Pinky69]

I have 3 defaults on my credit reference reports. There are 2 companies involved, the Co-op Bank and CrapOne. Neither had credit agreements and both issued invalid Default Notices. What is the best way to get these defaults removed? It is not a priority, I am not going to apply for credit, but I wonder what would be the best approach to have these defaults removed.

[Pinky69]

Hi Hannah

- no one has posted and I think this is quite complicated but after surfing around the site I think I now have my approach clear in my mind.

 

They failed to provide me with copies of my credit agreements in breach of Sections 77/78 of the CCA 1974.

The alleged accounts then went into dispute and that meant that under S77/78 (4) they could not take any enforcement action including but not limited to asking for payment, applying charges or interest, and communicating with any third party regarding the account, including Credit Reference Agencies.

 

Without legal Notices of Assignment delivered in the prescribed manner the Co-op assigned the accounts to a third party, namely Frederickson, issued Default Notices and recorded defaults with the CRAs, contrary to the CCA 1974 and the Data Protection Act 1998.

 

The CRAs are also in breach of the Data Protection Act 1998 for recording information in the public domain to my detriment whilst an account is in dispute with the recording bank.

 

It is not enough for them to say "we didn't know" - they should check that all information given to them is in accordance with the Act before they record it.

 

Ignoring the dispute, the Co-op compounded their breaches of law by issuing unlawful Default Notices and terminated the accounts in dispute, which is unlawful rescinding.

 

The Default Notices were unlawful in that they were issued whilst the accounts were in dispute and were technically flawed in that they did not give sufficient time for the alleged breaches to mended. Thereafter the CO-op continued to process my data and passed it on to a DCA and the the CRAs, in breach of the CCA 1974 and the Data Protection Act 1998.

 

Ditto CrapOne and they continue to breach the laws by updating the information they unlawfully recorded with the CRAs.

 

They are getting 7 days to remove the entries on my credit reference reports or I will take legal action against them and the CRAs.

 

Copies of these letters will go to the Data Controllers of the companies, their CEOs, the OFT, the Information Commissioner, the Credit Reference Agencies and the FOS (a complaint about the CO-op is now with the Ombudsman and this will just add to it nicely!)

 

I actually don't give a damn about my credit reports but I am damned if I will let banks do what they like with my information! I think I have a pretty good chance of having them removed. Is this helpful to you Hannah?

[Pinky69]

Thanks Nurse- Elsa. Yes I am aware of that and under that scenario they would have got nothing from me because with both the Co-op and CrapOne the accounts were frozen whilst I was under a debt management plan and went straight from that to being unenforceable. The disputed accounts are all original capital. Shame.

[Pinky69]

Default Notices are covered by the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983.

 

They must take a precise form as laid down by these regulations.

A DN which doesn't is invalid.

 

Where a DN is invalid then the account terminated, the creditor loses the legal right to the capital sum as they terminated the account without giving the debtor an opportunity to mend the breach that led to the default in the first place.

 

All they can claim is any arrears that arose whilst the agreement was current.

 

Where a DN is valid ie drawn up properly in accordance with the Regulations, then the creditor can claim the whole balance of the account if the breach that caused the default was not remedied by the given date on the DN.

[Pinky69]

Well this is it folks- the letter I will be sending them off on Tuesday. Hope it is helpful.

 

 

 

 

The Data Controller

(Bank)

 

 

Dear Sir/Madam,

 

Your ref:

 

 

I write in connection with a credit card account referenced above which is in dispute. I do not acknowledge any debt to the (Bank) or to any company affiliated with the (Bank).

 

 

In December 2007 I requested a copy of the credit card agreement for the account referenced above in accordance with Section 78 of the Consumer Credit Act 1974. I received a reply dated 7 January 2008 in which the respondent (Name), Customer Relations Adviser, wrote that what was enclosed was a copy of the loan application. Later the Bank admitted they did not have a “full agreement” for the disputed account. There is no such thing as a partial agreement and what I was sent doesn’t resemble an agreement in any sense.

 

This application form does not fulfil the requirements for a copy of an executed agreement under the terms of the Act and is unenforceable in law. It is a purely an application form and does not conform to the requirements of the Consumer Credit (Agreements) Regulations 1983. A credit card agreement must have the prescribed terms (credit limit, interest rate, and repayment schedule) within the same 4 corners of the agreement as the signature box. This application form has no prescribed terms and no Terms and Conditions whatsoever.

 

 

This is an unenforceable application form and the (Bank) do not have any documentation containing my express written permission to process my personal data in connection with this disputed account, in clear breach of the Data Protection Act 1998. The Bank have already breached the Act in passing my personal data to third parties, namely (DCA) and the credit reference agencies.

 

Furthermore, in 2007 the (Bank) sent me an invalid Default Notice in connection with this disputed account. The date by which to remedy the breach of the alleged agreement is given on the Notice as 14 days from the date on the Notice when in fact under the Consumer Credit Act 1974( as ammended in 2006) the time that must be given to remedy a breach of agreement is 14 days after the date of service. The date of service in law is deemed to be 2 days after the date on the Notice if it was if sent by 1st Class post and 4 days after the date on the Notice if it was sent by 2nd class post. There then must be 14 clear days after the date of service allowed to remedy the breach. All the Bank did was set a date 14 days from the date on the Notice, rendering the Notice unlawful as it did not allow sufficient time for the alleged breach to be remedied. The Bank then terminated the alleged agreement, unlawfully rescinding the disputed account. The Bank then entered an unlawful default on my credit reports as they did not serve me with a valid Default Notice before terminating the disputed account. The Information Commisioner is clear that all entries to credit reference reports must be made in accordance with a recognised industry standard. The Bank's actions have in my case not only fallen well short of the recognised standard but have been in clear breach of the consumer credit and data protection laws.

 

 

Unless the Bank can provide me with documentation in which I gave the Bank my express written permission to process my personal data, I require them to cease all use of my personal data with immediate effect and remove all entries from my credit reference reports. It will not be good enough to assert that I must have signed it – I require clear documentary proof of written permission.

 

The Bank has 21 days to reply and action as necessary. Failure to do so will result in further action from me, including but not limited to, formal complaints to the Information Commissioner and the Office of Fair Trading Consumer Credit Licence Fitness Department re gross misuse of my personal data and blatant breaches of the consumer credit laws.

 

 

I look forward to hearing from you. If there is anything about this letter you do not understand I advise you to consult a solicitor.

 

 

Yours faithfully,

 

Cc The Chief Executive of the (Bank)

 

Cc Experian

Cc Equifax

Cc Call Credit

 

Note to the credit reference agencies : You are jointly responsible for entering an unlawful default entry into my credit report in connection with this disputed account and your actions will form part of my complaint to the regulatory bodies if such action is required.

[Pinky69]

No I haven't heard anything - they have gone completely stum. I gave the letter a few tweakS before I sent it - I felt was missing a bit of sting. So, at the moment I have made court enquiries (Scotland) to see what level I want to pitch this at legally. I will also be taking legal advice. I've got SAR's and final demands going off this week. I will keep you posted.

[Pinky69]

Hi folks - just an update. I have received a reply from the bank who entered a default after the account was closed (paid in full and not a F&F) who are "looking into my complaint." I have replied there is nothing to look into - they have admitted the account wasn't closed after I had settled (in 2005) and the entry was unlawful. I have asked for compensation of £8000 ( Durkin v DGS et al - 2008) as precedent. I have given them 28 days to offer me the appropriate compensation or it's off to court we go. This is a more straightforward case than the DN's but they are going to get the same treatment in due course - they haven't even replied yet. Will keep you posted. It's a wonderful feeling to be kicking their bums!!

[Pinky69]

OK - more updates. I've sent the bank which didn't close the account when they should and entered defaults over 1 year later has been sent a SAR and Letter Before Action. Experian have completely removed the entry but amazingly Equifax and Callcredit have simply updated the entry as a partial settlement last month!! (account settled in 2005 - not partially either. There must be fairies at the garden of their bottoms!). Have sent them Letters Before Action too. The fact Experian have removed the entry is in my favour for the case. Claim for damages made to the bank quoting Durkin. I have had an acknowledgement for my complaint to the ICO saying the case has been allocated for investigation.

 

The two banks which sent invalid DN's then terminated the accounts have been sent SARs. One hasn't replied to my initial letter and one is investigating. I will now need to wait for more information to build my legal case. They have 40 days and I am in no hurry to cook their geese!

 

I won't post any more letters for now because there are snoops about but I promise you that when it is all over I will post all the letters. In the meantime I will keep you fully updated.

[Pinky69]

Excuse me WillThey, this is my thread and your questions go on forever. If you need to ask about the legality of Default Notices, please start your own thread.

 

Today's update. A reply from one of the bank's who sent an invalid DN in which they continue a previous dispute with them, now long finished, and don't even mention the point I raised about the invalid DN and termination. Their customer advisers know nothing about the law. I have replied that his reply is drivel and he should pass it on to someone who understands what I am talking about. I have given them 28 days to remove the default and make an offer of compensation. I've got a feeling this is going to be long haul and will end up in court.

 

The bank who "forgot" to close my account after I had settled and entered a default over a year later has referred it to the equivalent of their complaints department. Looks like that will end up in court too in due course.

 

No reply at all from Bank 3 but they got the SAR today.

 

The more difficult they make this the worse it is for them and I am in no hurry. Have sent Letter Before Action letters to the bank who didn't close the account and 2 of the CRAs - the 3rd CRA has removed the entry.

[Pinky69]

Today's update - Round 1 to me. The bank that entered the default a year after the account was closed have now removed the entry from all the CRA's. It was done immediately after receiving my Letter Before Action and a copy of the Durkin transcript. They offered me £100 in damages from the outset. It has been referred to their complaints department for a further review of damages. Since that is an admission of liability, it will be a question of negotiation or court.

 

So, to the 2 banks (3 accounts) - invalid DN's then terminated. One of them has lost the plot! I've received a copy of the application form they think is an agreement with a covering note with no signature or address saying "Please find enclosed a copy of your credit agreement"? Que? They haven't even got the SAR yet!! It's going to be a long few months.

[Pinky69]

Thank you, Ghost. I will keep you posted as I go along.

[Pinky69]

Today's Update. Bank No 1 (1 account) have sent me a letter stating that what they sent in reply to my CCA request at the beginning of 2008 was a credit agreement. This is I presume in reply to my SAR request. It is going to be long year. I will wait the 40 days then get in touch with the IOC. If only I were dealing with even one complete brain cell.

 

Bank No 2 (2 accounts). The Royal Mail failed to deliver the SARs so they are on the way back to me - reason unknown. They have to go through Belfast, their returns office. Once I get the POs back I will send them again.

 

Have had a letter from Equifax offering the services of their Disputes Team with my complaints. I am going to take them up on that because they might be helpful in actually getting some sense out of Bank 1.

 

I went through all my files today keeping all the correspondence on these cases together. It's wonderful that all that paper and all those hours were wasted by banks and DCAS. I sent the first CCA in April 2007 and I never paid a penny to anyone after that - it was thie greed that cut them off at the neck, all of them. I have had £50000 written off - one bank alone wrote off £24000. Now I am down to getting 3 defaults removed and not a valid DN between them before termination. There is a God.

[Pinky69]

Bank 1 is all at sea and Bank 2 are supposed to be investigating so whilst I wait 40 days to receive a SAR from one and a response from 2, I have begun the second part of a two-pronged attack, this time on the CRAs themselves. They just accept what the banks tell them but by my registering disputes with them, they have got to check out that the information they have is not in breach of the DPA, otherwise they too are breaching the Act and aiding and abetting a bank/s to do the same. They ask for supporting evidence but I am deliberately not sending them any. I've told them exactly why each entry on my credit files from these 2 banks is in breach of the DPA and it is up to them to check out each entry in dispute with the banks. That means they will have to talk to the banks and evoke a response from them. If they get the same template and drivel responses I have had so far, then the entries should fall off my reports like snow off a dyke - we'll see.

 

It's a labour of love! I am composing the 2 different letters, then entering the details from the 3 CRAS. I am attaching to each a copy of the Durkin judgement. I am doing it a bit at a time to make sure it is accurate - and in this heat I am in no rush. Slowee slowee catchee monkey! I read on CAG somewhere a while back that if the CRAs don't get a response or are unhappy with the response they do get, then they remove the default after 30 days - I must check that out.

[Pinky69]

Breaking News . I have had a reply from Bank 1 - they don't consider the DNs (2 accounts) invalid and if I write again they will file my letters but not reply. Aww didums - bad bank no ' peak to Pinky! Isn't it nice they won't reply? - it is usually the other way around!! :lol: I have replied that the invalid DN's are a legal fact and not something the bank can change by consideration. I have also said that there is more than the bank involved - the CRAs are also involved - and they too will be in breach of the DPA if they collude with the bank and don't remove the default entries. The bank didn't need to speak to me but they would have to speak to the CRAS. The bank also said they would continue to pursue the alleged debts -D'oh!! Cloud Cuckoo Land.

 

So, Complaints sent to both banks

SAR to 1 bank, waiting return of mail to resend SARs to other bank

Copies of complaints to bank sent to CRAs

Copies of subsequent letters and replies sent to CRAs

Complaints sent to CRAs

Letter Before Action sent today in reply to above - copies to CRAs

Copies of Durkin judgement send with complaints and to CRAs

Copy of reply received today and Letter Before Action sent to Bank's

CEO.

 

It's been a pile of work, setting up templates, cross-referencing , making sure CRA details are correct for each complaint and I need a mortgage for ink!! That's all I can do for now. I'm going out to get myself an ice cream.

[Pinky69]

Today's Update -the influence of the CRAs seems to be kicking in. I've had a response from the bank whose only reply to me has been to resend a copy of the application form (there is no agreement). They say they will look into my complaint about the default and get back to me in the next 28 days. At least I now have a contact person and a ref now. The bank which removed the defaults and initially offered £100 have also written and the question of compensation is being looked at. They will also reply in 28 days. Seems they all need at least 4 weeks to do anything! That leaves the bank that won't speak to me but I am happy to leave them to the CRAs -for now.

[Pinky69]

The FOS is no use to me. They do not decide on points of law and an invalid DN is a legal matter. I've been through the FOS about unenforceable agreements and it was a total waste of time. In addition they took 14 months to make a final decision. I will report these banks to the OFT once things are finanlised but this is way above anything TS would deal with. I may need a direct order to the two banks to remove the default entries.

[Pinky69]

I'm not being harrassed - none of these banks are pursuing me for these debts and haven't for quite some time(they know that I know they have no enforceable agreements). My sole interest in this is to get them to remove the defaults. They sent invalid DN's, terminated the accounts and thus caused unlawful rescission. The entered defaults AFTER the accounts had been rescinded so they had no right to process my personal data at the time they did.

 

Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but gives rise to a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119

 

I have not consulted a solicitor and am doing this on my own. I expect it to be some time yet before I need to take them to court.

[Pinky69]

I have had a response to my SAR from the bank who won't talk to me. There is not much in it. I have today written to the man who won't speak to me's boss asking for copies of the DN's and Termination Notices for both the accounts. I have one DN and the dates of both terminations - God knows where I put the other DN. I know the date on it and the date of the termination so there's no problem is he isn't speaking too! They will have to produce them in court.

 

I am now aiming off for the end of July for proceedings. I have decided on Small Claims because it is easier. I am not going to take the risk of paying legal fees if I were unsuccessful at Summary or Ordinary Cause (Scotland), neither of which I could do without a solicitor. So including the CRAs it will be a total of 12 claims. Ha! the Sheriff is going to love me!

[Pinky69]

My the shoe really is on the other foot - banks being put under so much pressure they won't talk to us! :grin:

[Pinky69]

I've had a PM from someone asking for copies of my letters as they want to raise the same case as me with their creditor. First of all, I don't give info in PMs. Anything I have that might be of benefit to all will be posted on here so everyone who wants to can read it. Secondly, I do not know for now whether my letters have had any effect on my case and I won't be copying them on here until that is know for sure. So far everyhting is up in the air whilst the banks decide what they are going to do. Thirdly, I don't know who might be Pming me - there are always quite a few guests about.

 

I promise if I am successful I will copy my letters on here for all to see.

[Pinky69]

I've received a letter from one of the CRAs saying that the bank who have only recently given me contact details will be in touch with me in 2 weeks and the CRA cannot remove the default without the bank's say-so. That is rubbish because the CRA cannot process info unlawfully and are in breach of the DPA if they have have been informed the info was passed to them unlawfully and they continue to process it. It looks as if the bank is not going to remove the default.

 

There is a double whammy on this one as there is no agreement - just an unenforceable application form. So an invalid DN was issued on the back of no agreement then terminated. DN and termination should not have occurred as there is no agreement. I will need to think through how to present that in court. All comments appreciated!

[Pinky69]

I don't think the integrity of the information given to the CRAs can be taken as a given when someone has questioned the integrity of that information and pointed out that their processing it is in breach of the DPA 1978. I can see how the CRAs would base initial entries on someone's report on the integrity of the information given but it behoves them to question and clarify the integrity of that information once they have been told it is unlawful. The CRAs are also subject to the DPA 1998 and if they breach it they too can be held accountable for it. They are not exempt from the law. I asked them to remove the default and gave them the reasons why and so far they haven't done it. If I am successful in my court claims I intend to take them to court too for processing my information unlawfully after they had been informed they were doing so.

[Pinky69]

OK - news update. The default entries removed two weeks ago have reappeared on the reports of 2 CRAs, not the 3rd. Have written a letter to the bank saying get them removed and this time keep them removed!(Account closed 2005 - default entered 2006). Some clown at the bank not only updated them but everything about them is wrong - even my date of birth. Copies of letter to the 2 offending CRAS. All adds to the claims for damages because it all adds to my claim that the entry wasn't only not only unlawful but also vexatious. The timing of it even makes it look as if the bank assumed I had the month-free offer with the CRAs then put the entries back on again when they thought I had gone!

 

First sign of the CRAs getting rattled. Had a letter from the Director of one of the CRAs today - it's getting too hot for the foot soldiers. He basically says 1) we don't need your permission to process your data (oh yes you do when an alleged account in dispute with no agreement is rescinded unlawfully), that I should consult the IOC for an unbiased opinion (sorry - the IOC is not unbiased in my view and this is a legal matter - the IOC are not lawyers) and he says I should consult a solicitor and gives me his biased view of case law. I have replied:

 

I am in receipt of your letter of (Date) and note all you say. The IOC give an opinion based on what would be acceptable to them in proof of permission to process personal data but that view is not necessarily the view of the courts. My permission to process my personal data is assumed by credit reference agencies when companies pass information to them. That assumption is based on the belief that permission was given by me to the company concerned at the time of application. If my permission was not given to the company concerned, then the credit reference agency has made a wrongful assumption in processing my personal data. In these circumstances the IOC view that a credit reference agency does not need my permission to process my personal data is wrong.

 

In the circumstance where an alleged agreement has an invalid Default Notice and that agreement is terminated unlawfully, then the agreement comes to an end being unlawfully rescinded and with it all assumed permission to process my personal data. Entering defaults on credit reference reports thereafter is processing personal data without permission and again in this circumstance the IOC is wrong when it states that a credit reference agency does not need my permission to process my data. The entries by (Bank) and ( Bank) were made after the alleged agreements had been rescinded.

 

 

Firstly, (Bank)' I enclose a copy of my recent reply to them. There is no agreement for this account, only an application form. The application form’s reference to the processing of data cannot be verified nor could it be produced as evidence as there are no Terms and Conditions pertaining to the account, only current Terms and Conditions. The Bank's assumed permission is based on a reference to a term in the Terms and Conditions that cannot be verified. The CCA 1974 makes it perfectly clear that part of the agreement is all the documents mentioned therein and current Terms and Conditions cannot be mentioned therein as they were not in existence at the time. It cannot be proved that clauses in current Terms and Conditions correspond in any sense to clauses in the Terms and Conditions extant at the time of the application. No agreement was ever issued by (Bank). Going wrongfully on the premise that there was an agreement, they rescinded any assumed permission to process my data when they unlawfully rescinded the alleged agreement. The default entry was made after the rescission. In that circumstance the CRA processed my information without my permission. That they would accept the entry from the company initially is understandable. That they would continue to process the information when they had been informed that doing so was in breach of the Data Protection Act renders the CRA equally culpable in law for damage to my creditworthiness. It is also not true that credit reference agencies cannot remove entries without the originator’s permission. That is not correct. Credit Reference Agencies are voluntary commercial bodies and can remove information without a company’s permission if they want to – there is no law that says what they must enter and must remove. If the CRA uses the argument that there is an industry standard they abound by, that is not the same as saying they are bound by law. Nor is there any law that says a credit entry on a credit report must remain there for 6 years – it can be removed at any time if it proves to be unlawful, as the Bank's entry is. The CRA cannot argue that the Bank's entry conforms to industry standards – it certainly does not and indeed falls far short of them.

 

I also enclose my recent correspondence to the (other Bank). The same pertains – no agreements (they wrote to me that they do not have “full agreements” – there is no such thing as a partial agreement and nowhere on what they sent me is there any permission to process my personal data) invalid default notices, termination resulting in consequential rescission, long before default entries were made, meaning neither the Bank nor the CRA had any lawful right to process my information when the defaults were entered on my credit report.

 

In my view the CRA and the other credit reference agencies are so accustomed to accepting information from companies and arguing with customers that there was an application so they can process the information passed to them that when a different case is presented to them they react in the usual manner – you gave permission to the company so we have a right to process your personal data. Then where is clear evidence that would stand up in a court of law that neither the company nor the credit reference agency had any legal right to process my personal information at the time the default was made, they are at a total loss as to how to respond. That indecision may well be very costly for them indeed.

 

I do not need to consult the IOC – they are not lawyers and I don’t share the view that they are unbiased. Time is running out for Banks 1 and 2 the and the credit reference agencies to remove the unlawful entries on my report – they are not above the law.

 

 

Did he really think I would cave in with all his drivel? I'm a CAGER born and bred!

[Pinky69]

Well folks I hope you are all enjoying posting on my thread. The legal part of my claim against Bank 2 has begun and I am now filling up the paperwork for the court. This is the first time I have taken a bank to court but I don't find the thought too daunting. I have 2 cases to raise against this bank - 2 invalid defaults - so I am doing the forms together but I will raise the cases one at a time. If Case 1 is a bum steer then I can forget Case 2. I have nothing to lose here. It's Scots Law but all the legislation is UK wide. I'll let you know when I have finally filed the first case at court.

[Pinky69]

I am now tweeking the 1st claim and it looks awfully legal! The Sheriff will probably take one look at it and say "What a lot of tosh!" The SAR for this account's time limit runs out on 30 June so I will submit the claim on 1 July. I don't think they are going to reply. They returned my £10 for the SAR the other account with them. I wrote to them again asking for copies of the default and termination notices for both accounts and they haven't replied to that either. I won't bother with the Information Commissioner as the court can deal with it. I can use an incidental application for information once I have submitted the claim.