Invalid Default Notices

[emandcole]

Ignorance or apathy? Perhaps a touch of both!

[emandcole]

What a joke! Looks as if they've issued a DN and Terminated it before the remedy time has passed on the DN they've sent by threatening action in their second letter. Priceless. Although they haven't actually stated 'Pay us the full balance now or else' the fact that they've listed that balance threatening action if you failt to act within 48 hours could be construed as termination but it would depend on your angle.

 

I feel most laymen would read that, panic and assume they have 48 hours to pay the amount they've shown (full balance) or they'll be in real trouble.

 

Keen to know however if Barclaycard have already defaulted you, they are quick to register defaults with the CRA's so this could add extra weight to your argument against them.

[emandcole]

Just helping on another thread and wanted to check something with you all if I may. HP Agreement, default issued for the whole balance so essentially a combined default & termination in one go.

 

Can the creditor do this or should they first provide a seperate default before moving to termination? Believe they can do this but somewhere in my head this seems wrong for a regulated agreement?!

 

Your input appreciated as ever so I can pass this on

[emandcole]

Hi Pinny, this is a big no no and clearly undermines your right to 'enjoy' that 14 day period to attempt to provide remedy.

 

Litigation may be a bit hasty, your first step is simply to accept their termination in a letter. There is an example in the posts above that you can use, send it recorded, print out the proof of delivery and keep all of the letters safe as they may be required if the creditor decides to get nasty.

[emandcole]

The acceptance of their rescission will not mean they won't chase you for the money, it does mean they are highly unlikely to litigate (and actually let it go to trial) as they may issue just to test your resolve.

 

You need to understand that just because the creditor has messed up doesn't mean that they will simply go 'fair enough' and let you off the hook. Yes, it has been fantastic for you but it doesn't automatically follow that you can also dictate what they should and shouldn't do now.

 

They will pursue this, if they don't you'd be very lucky. All you can do now is go along with any requests they make, remind them that only arrears are lawfully payable and bide your time. If you choose to litigate to get them to stop chasing you that's another issue entirely but one you'll have to be very well prepared for as you're always better off being the defendant.

[emandcole]

Hi Tammy, sorry to hear of your troubles but welcome to CAG. If any of us can assist in any way we will. However, to get started on here you'll really need to start your own thread so we can read through the situation and anyone who feels they can offer good advice can comment.

 

I would suggest you follow this link:

 

http://www.consumeractiongroup.co.uk/forum/

 

Once there you will find a fairly small bluish button to the left of the page with the words 'New Thread' on it. Call your thread something appropriate and go from there.

 

The Consumer Forums - FAQ: Board FAQ

 

will enable you to have a read on how the forum works and how certain things work. Spend a bit of time and you'll soon be up to speed. Once you have posted your thread you can provide a link for us on this thread so we can go find it. If you're unsure how to post a link to your new thread just ask.

Edited March 30, 2010 by emandcole
Link not working

[emandcole]

Just thought I'd add a dodgy Mint/RBS Default Notice up for anyone who might find it handy. This is an example of the template format they used at the time so might be useful for someone.

 

Mint then farmed it out to anyone who'd take it over a 12 month period so I immediately accepted their rescission and it's all gone pretty quiet.

 

They also seem unwilling to comment on why the 'Credit Agreement Regulated by the CCA 1974' headed application they sent appears to be regulated by new terms and conditions entitled 'Credit Card Agreement Regulated by the CCA 1974'. What a mess.

 

However they did practically invite me to take them to court after I asked them to remove their inaccurate records on me with the CRA's.

 

Discuss

Mint Edited Default.pdf

Edited March 30, 2010 by emandcole

[emandcole]

Hi Count, this doesn't need a new thread, it's just an addition to much of the discussion that can be found much earlier in this thread.

 

Issues of termination, acceptance etc can be found here in previous posts. Do a search for default orientated threads and you'll pick lots up from that as well .

Edited March 30, 2010 by emandcole

[emandcole]

cheers, i have a look to see if i can find the answers. If i could get enough of my debts reduced to the arrears because of dodgy default notices I could get a DFO, I can't afford the fees to go bankrupt being on pension credits.

 

If you have any defaults get them up on here after scanning and removing your personal details and we'll soon advise on what's credible or not .

 

Might just make things easier for you!

[emandcole]

Ah ok, that's good. Appreciate the letters can be tiring but if that's the price to pay I've always found it to be a small issue.

 

As for the acceptance letters you'll probably realise that you did in fact send them to each creditor who issued an invalid DN and then terminated, you just need to look a bit harder .

 

As for callers to the door if they even turn up just ask them to leave, if they don't threaten to call the police. These jokers have no more right to demand payment than I do, they just rely on intimidation and false pretence so don't give them the time of day.

 

As for court action the creditors are often reluctant to see it through to full trial as there are risks for them too. Unfortunately this can result in a stalemate situation, both parties stuck in a limbo state with neither willing or able to take decisive action.

 

I'm currently in the process of writing to the Data Controllers of each creditor who has issued dodgy DN's and terminated ordering them to remove the references to the CRA's as the info they hold and maintain is now inaccurate. Have already had one default removed so this can work.

 

If the company refuse to remove voluntarily you can of course litigate but this is something you'll need watertight evidence for and the ability to see it through. Other options include writing to the CRA's directly and informing them the data theyhold on you is incorrect and that there is no longer any contract between you and the creditor, therfore any permission you once gave to process and store your personal information has been withdrawn.

 

The CRA's have a duty to ensure all info on you is correct or they expose themselves to risk. The CRA will check your claim with the creditor and if the creditor doesn't get back to them they will remove the data. If it's reasonably in dispute the CRA may even 'hide' the offending data meaning it's there but not visible on CRA searches. All good for you of course.

 

Finally, if the creditor is being a tool and the CRA's remain confused complain to the Data Commissioner, detailing why the info recorded against you is incorrect.

 

Yep, it's a pain to do all this but if you want something constructive to do this could be it and you never know, some creditors are more complicit than others. For those that bury their heads in the sand complaining to the authorities may be your only real option, unless you want to litigate for unlawful rescission, injury to credit and to gain an enforcement order forcing the creditor to remove their incorrect data.

[emandcole]

If you have made payments against accounts that you consider unlawfully rescinded, then you may well have trouble arguing that the agreement ended.

 

Guess he'd have to insist they were token payments towards the arrears balance as the creditor did not provide the arrears totals as requested in any acceptance of termination letter. Worth a shot.

 

I've never had an acceptance letter responded to despite it being sent via recorded delivery and printing proof of delivery. Either way the creditor seems content to stick their head in the sand whilst trying to maintain a position of superiority.

[emandcole]

Well he could try, but without further communication regarding his counterclaim for damages following UR, they may have trouble beleiving it.

 

I don't think that the creditors understand. We sometimes give them too much credit for understanding the law. In general, it is not until it gets to the Solicitors, that it sinks in.

 

Think you're bang on there Vint, how many years have they had to get a DN right? All that free guidance and a small army of supposedly well qualified people and still we're seeing simple errors and general malaise towards regulation

[emandcole]

Ah Woodchester, one of my favourites!

 

[emandcole]

Hi bilious, have you scanned the DN's you suspect are faulty? Keep everything you have, especially the termination letter as if it partners a faulty DN you have some powerful ammo at your disposal.

[emandcole]

Hi, you need to look at the matter as a sequence of events. This sequence is not moveable and is entirely rigid. For example to get to number 3 from the starting point at number 1 you absolutely must pass through number 2.

 

Hope that's a good start? Bear with me . Your credit agreement affords both parties privileges, typically for the debtor it means you can borrow X amount and pay this sum back, not all in one go as that would suck, but over a period of time that suits you (agreed beforehand of course).

 

In return for this flexibility the main privilege the creditor enjoys is the fact that they'll charge you interest over that period, more for longer, less for shorter. The end result being that they lend X amount but also make a return exceeding X amount. Nice little profit.

 

That's the basics we all understand of course. However, in the past some bright spark realised that there could be an abuse of relationship between the banks and the debtors (that would never happen surely ) and the result was legislation to regulate it all. Even playing ground for all...great.

 

With this in mind the creditor now has to abide by those rules if they want to seek enforcement when and if the creditor starts to miss/avoid payments. So...first off, if payments have been missed (this number of payments varies and the general rule is that the number of payments missed should be proportional to the length of the loan before a default is issued) the creditor must issue a correctly formed and accurate default notice, the legal document, which must be composed according to a prescribed format. This would represent number 1.

 

Number 2 would be the letter of termination (if that's how the creditor wished to proceed) and in order for the termination to be valid the previous step must have been passed through correctly. So, the default notice must have been accurate in every way. If the creditor realises that it made a mess of the first step it is within its rights to re-issue that default notice, but only before it has actually stepped to number 2.

 

Assuming then that it has got number 1 correct, has moved to number 2 and got that correct it can now 'enjoy' all of the rights afforded to it that sit at number 3.

 

The legal jargon would be as follows:

 

Demanding the full balance (point 2) before having issued a compliant Default Notice (point 1) means the provider is not entitled to enjoy the provisions of Section 87 of the Consumer Credit Act, which includes the full payment of any sums outstanding (point 3).

The right to demand early payment is only available to them if they are already in possession of an effective s87(1) Default Notice. Without that, it's a Catch 22 situation for them, because they need an effective Notice to use s87 and, if they are found to have used s87 without an effective Notice, then they have clearly Terminated the Agreement via unlawful Rescission of Contract.

So, to go back to your question about how a letter demanding the full balance is akin to termination you only need to realise that by doing so they are effectively trying to secure the rights afforded to them at point 3. If they do this before having completed point 1 (point 2 is the letter itself) then they cannot secure the right to request the full sum.

 

By demanding the full balance now they are removing the main privilege of the contract you enjoyed, as explained above (the ability to repay on a monthly basis) and in doing so are seeking to withdraw that contract between you. As there are two parties in this if one party seeks to cancel that contract you have the choice of either trying to ignore it (pointless if they've followed the correct sequence) or accepting it (all the better if they haven't follwed the correct sequence) ideally by sending them a letter.

 

-----------------------------------------------------------------------------------

 

So, a correct default notice followed by a termination letter ends the contract. 1 is correct, 2 is correct so they have the right to move to point 3 and 'enjoy' all that affords.

 

An invalid default notice followed by a termination letter ends the contract but you can accept unlawful rescission. Do it quickly.

 

A plain termination letter with no default ends the contract but again you can accept and claim unlawful rescission. Do it quickly.

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Finally, a termination letter can take many guises. Any letter or action from the creditor, or DCA demanding the full balance can be considered as termination. Any court action is also instant termination. The key being that if the creditor is demanding the full balance they are/have removed the main privilege of the agreement you had, which was to pay the debt over a period of months instead of in one go.

 

Hope that's not too wordy but hopefully it's clear enough and will help people to picture the process clearly in their minds .

[emandcole]

Sweet . Get that letter recorded and print it all off to show they've had it. If the default is inaccurate as you state it is you are only indebted to them for the amount specified on that default notice.

 

Not that they'll like it but I had a friend who did it with HSBC for the best part of 18k and to date HSBC have been speechless! Perhaps they'll start realising that such notices are actually quite important . All the best.

[emandcole]

They got the works, made a lovely set actually all laid out in transparant A4 binders! One invalid default notice followed by a seperate letter headed Termination Notice blah blah with all the details demanding the full amount of the account is repaid before 21 days. (It was a heavily inflated charge stricken managed loan compiled from a credit card account, student account, personal loan and business account - penalty field day for the bank). Proof of delivery was all printed out as well, the bank cannot claim they didn't get the acceptance letter.

 

The unlawful rescission letter was sent accepting their unlawful termination and confirming the account had been closed with each party no longer having to perform, finally asking for the accurate arrears balance to be sent. The bank have tried to ignore it, then they farmed it out to a third party DCA who wrote demanding the full amount or else.

 

I knocked up a simple letter for them explaining the situation and nearly three months later the DCA wrote back, having obviously checked the matter out with the bank, stating they'd noted the contents and would not be pursuing the matter unless the bank instructed them to do so once more.

 

That was about 6 weeks ago, nothing from anyone and the unlawful rescission was accepted many months ago. My guess is they know they've messed up and have moved on to more pressing matters with this account currently being in limbo. There were added complications for them too as the loan figures didn't add up, they were about £4.50 out but the bank repeatedly refused to comment or explain why the figures were wrong.

 

So, it does work and regardless of their threats quite simply it is their own actions that resulted in the mess they find themselves in today .

[emandcole]

Aha...cue the second part! As we all know the role of the Credit Reference Agencies is to maintain an accurate record of debtor performance (simplistically speaking). The fact that the default the bank would have registered was 1) inaccurate and 2) invalid means that it has no place on the files of the CRA's. If it does then we might as well throw the entire system into anarchy as it becomes both useless and damaging, both to the consumer as they can't access financial services and to the financial industry as there's no one left who is deemed to be credit worthy.

 

It follows therefore that an incorrect/invalid DN has no place in the CRA files and accordingly the consumer can demand that such an incorrect entry is removed. As the account has been terminated by the creditor and accepted by the debtor there is no longer any right to allow the creditor to re-issue another DN. A letter to the data controller of the creditor requesting this invalid entry is immediately removed should be complied with as it is inaccurate. The CRA also has a duty to ensure all records it holds on a data subject are entirely accurate.

 

Your line of attack is therefore twofold. A letter to the CRA about an entry will normally result in the CRA asking the creditor to substantiate the accuracy of the entry. If the creditor fails to respond or to substantiate the entry the CRA will or should remove the offending entry. Also, the data controller of the creditor should be under no illusion as to their responsibilities and if you can demonstrate their default is invalid it certainly should be removed immediately if termination has occurred.

 

Of course if termination hasn't happened the creditor can merely correct the default notice to avoid scrutiny at a later stage. I've had success with this before, informing a creditor that unless they remove the invalid default I will litigate for injury to credit and breach of data protection and had a letter back from the DCA handling it confirming it will be removed from all CRA's apologising for the 'oversight' on their part.

 

Remember, the CRA's MUST record accurate information and an invalid default on a terminated account is in no way accurate. It follows that it should be removed however the account performance and record of payment will be accurate and that of course will stay there...as it should if it's perfectly correct.

[emandcole]

 

First they say you have to take action on or before 14/04/2009. then the next line says if you do not take action before the date shown ....which would be the 13/04/2009 and would I think, then make the date one day short even if posted 1st class. Don't know if any one disagrees?

 

 

Hi, pretty certain from numerous discussions on here that the fact the creditor states the DN must be remedied before a date shown does automatically mean that you actually have until 23:59:59 of the day before remedy is required in order to avoid any further action listed.

 

Technically then this removes an entire day from the remedy time actually available to the recipient.

 

So, in many cases yes, I certainly believe this would invalidate a DN even if the time for service was correctly given...yet another peculiarity of the DN wording!

 

It's all complete madness

[emandcole]

Hi Michael, I get your point 100% as have also experienced the kind of 'hardball' the banks use and yes, the CRA's can makes things less than easy. However, I have experienced the CRA's removing entires after an online complaint to Experian resulted in the originator of the entry faiing to respond to them.

 

I was informed that as the originator had failed to provide the information requested (and failed to respond completely in this particular case) that Experian had decided to uphold my complaint and the offending entry was removed.

 

It can work but you need to go in hard and not adopt the 'would you mind looking at this for me, it might not be right' approach but go in and state 'this is wrong, if you don't remove it I will commence litigation to have it removed and claim appropriate damages for injury to credit'. They can be awkward but ultimately they are liable and they can be found guilty of holding damaging data, which you would be entitled to claim damages for.

 

Regarding that I'm litigating right now against a DCA for this, currently their defence is rather lame and everything is proceeding very nicely. Their defence currently revolves around:

 

1) I have no right to take 'them' to court

 

2) this entry is nothing to do with them as it all happened before they bought the debt/account. The fact this invalid default has their name on it after assignment seems to be a fact they are choosing to ignore.

 

3)The account wasn't unlawfully terminated (they've previously produced the default notice to the court that they reckon was fine only to have it rejected as invalid - that was priceless).

 

If more people grabbed their rights and more people started getting heavy in response to such entries (that are truly inaccurate) then those who place them there without a care in the world would be forced to actually consider their standing before choosing to register such data.

 

I strongly believe we are only collectively in this situation as we as a society have allowed them to do this. Fortunately people are starting to fight back, starting to ask questions and are attempting to re-claim their rights. This can only be a good thing but ultimately we must take action ourselves where we can as failure to do so will only result in the sort of widespread abuse of the creditor/consumer relationship we generally see today .

[emandcole]

Is that it? All those questions you put to them and that's all they send? To me it reads as if they've gone defensive and have buried their heads in the sand. They know you're probaby correct but also assume you won't take action in the courts as very few people do. You're probably facing the classic creditor/debtor stand-off now.

 

Creditor sells to DCA who hopefully realise litigation is futile.

 

Debtor fed up but not prepared to litigate as burden of proof sometimes tricky.

 

Result. DCA hassles you for ages. Creditor sells cheaply and claims it all back, maintaining the invalid default out of spite.

 

You...stuck in the middle with a trashed credit file and nowhere to go .

[emandcole]

Sorry, just seen this post. If it was 2006, then it is far too late to accept UR.

 

Just to throw the cat among the pigeons and be wholly contentious the acceptance of the recission as most of us know can be by letter (ideally) but also by conduct (less favourable if payment was not made anyway before the invalid default and termination as there is no distinction between debtor performance before and after recission).

 

However, going back to the actual letter given the fact that there is no legal requirement for the debtor to provide proof of posting why not just produce one you wrote earlier? Contentious of course but at the same time you'll merely be playing the same games as many of the creditors and DCA's themselves.

 

Question is then - are we prepared to stoop to their level? :-|

[emandcole]

Contentious wins then .

 

However, if the creditor/DCA is using all manner of tricks as has been the case on many occasions in threads I've read who can blame someone for doing this? Claimants appear to enjoy an element of immunity from penalty even if they get caught - we all know it's a joke.

 

If the defendant gets caught out what'll happen? They'll just lose the case anyway. Wouldn't advocate bare faced lying at any point but as the playing field is not always level a move like this would at least address the balance.

 

Damn this gets tricky doesn't it? :-|

[emandcole]

I would certainly argue with a judge if I was certain they were wrong and secondly (vitally), that I could show how they were wrong. Of course there is a certain level of respect to be given but to my mind only when that individual, a judge or otherwise, demonstrates that they are deserving of it.

 

We must remember that a judge cannot make the law up as they go along, that is not their role. They are there simply to ensure the law is followed and that is perhaps where most of the difficulties occur.

 

In short, if you are heading off to court you must ensure you know your arguments, that you also know how those arguments fit (in the wider scheme of the CCA for example) and also that you can then back your argument up with well arranged and easily referenced proof to support that position. Basically, don't hand the other side or the court a box of ammo and be too surprised if you end up as canon fodder .

 

Standing there flapping as you hoped the judge would 'know what they were doing' won't cut it in many cases. You absolutely must be prepared to act as if the judge has never even heard of the Consumer Credit Act and be entirely mindful that they probably play golf with some of the banking execs at the weekend, that's if they're not busy meeting in halls wearing 'funny aprons' ...say no more.

[emandcole]

Hi Pinky, Annabella, this sounds a bit complicated!

 

Annabella, have you got a thread on this somewhere? Looks like pinky will have their hands full otherwise