can NORTHERN ROCK do this?

[TheSkints]

Hi everyone

 

I hope you can help me please. I'll apologise in advance if this is a long one....

 

 

I've had a loan with NR for some time now. The agreement was for £17,250 in 2004. In 2007 I missed some payments, and received a letter (dated 12th October 2007) that states the following:

 

"Further to our default notice dated 19th september 2007 your failure to pay the then outstanding arrears of £770 now results in the termination of your loan agreement with us.

We, therefore, now demand a payment forthwith of the sum £17,753.32 plus interest from the date of this notice until full repayment is received at £6.25 per day.

Failure to make the payment int he next 14 days may result in us instructing our solicitors to recover the balance outstanding through the County Court. In these circumstances you will be liable for our legal costs".

 

Now, as I hadn't heard anything else from them, I continued to pay as normal, and managed to clear the £770 outstanding debt.

 

As far as I can see on my credit report, no default notice has been served from Northern Rock.

 

However, I have continued to make my payments throughout the last two years, and receive frequent letters regarding interest rates and expected payments etc etc.

 

Then, last Thursday, 29th April 2009, I received a letter from Newcastle County Court, dated 20th April 2009, envelope postmarked 27th April 2009, sent second class, that had a copy of the letter I quoted above, and has said that I owe them £20,089 plus costs that comes to £20,549.10.

 

So my query is... was my agreement terminated in October 2007 and if so, should I have continued to pay them, or wait 2 years until they send me the court order (with £6.25 daily interest).

 

The court papers state that I have 14 days to respond, from the date of issue - they took 7 days to post it, it took 2 days to arrive, I had one day to look at it befoe the bank holiday weekend, so if it doesn't arrive back with them before tomorrow, the 14 days have gone. What a cunning way of guaranteeing no response!

 

By the way, since the letter dated 17th October 2007, I have continued to make payments which total £3,760.

 

 

Can you please advise me what to do, as I'm really concerned about all of this. (they did tell me on the phone that if i pay the £700 court fees that they would drop it, but I can't afford to pay that amount either).

 

Many thanks for taking the time to read this, I do hope you can advise me.

[supersleuth]

Firstly, if you send it an acknowledgement of service - that should give you a further 14 days to prepare your defence. On the acknowlegement of service state the date on which the claim form was actually received.

 

This issue sounds like a Consumer Credit Act 1974 and 2006 issue regarding the validity of the original default notice. Read those acts (google the "UK statute law database" where you can see those acts on line).

 

The fact that your account is current and they accept all the payments for the arrears sounds like their default notice is ineffective (and/or void). And the fact that they're prepared to drop it if they can extort the £700 fees they've incurred (which should not have been incurred) sounds like they know the weakness of their case.

 

Also, the figures don't stack up. If you borrowed £17.5K and have paid all the arrears and nearly £4K in the last two years - how do you now owe then £20K? Sounds strange - or as usual, may be another case of another bank that is overcharging. Need to do a full reconcillation of the account.

 

But first thing - acknowledge the date of service and get the extra 14 days that you need to prepare your defence.

 

Also, rule of thumb - record all your calls to them and/or only deal with them IN WRITING.

 

Oh and short answer to your question "can NR do this?": Answer at law NO, but the banks don't abide by the law so they do it anyway.

 

Final point: £700 in court fees sounds excessive - check the validity of this charge too.

Edited May 4, 2009 by supersleuth

[TheSkints]

Thanks very much for this, it's very useful - I'll have a look into it today.

I didn't think the figures added up but thought this was more to do with interest being added - especially as 2 years at £6.25 a day is a hefty amount.

 

Cheers,

 

TheSkints

[TheSkints]

Well, having heard nothing from NR since our letter to them on 5th May requesting further information on how a terminated account can still accrue charges and accept monthly payments; and requesting a copy of the default notice as there isn't one on our credit file; and also how it took 19 months for this correspondence to reach us, we got a letter from the court yesterday demanding a £20k+ payment to NR.

 

We have contacted NR to find out why they went ahead without providing us with the information we asked for, and have basically been baffled with terminology. We were told in May that their solicitors would write to us, but so far the only correspondence we have had about this is from a court demanding payment - they haven't even had the decency to tell us themselves!

 

We're stuck now, and don't know what to do - apart from going to CAB tomorrow.

 

We were told though on the phone again today that if we'd have paid the court fees they would have dropped the case. It just doesn't make sense. I wriote to them informing them about the default notice not being served properly and was told that it's a different thing on an unsecured loan!

 

Oh, and we are still paying them!!!

 

Any advice nomatter how large or small is appreciated.

 

Thanks

[Mephistopheles]

Well, having heard nothing from NR since our letter to them on 5th May requesting further information on how a terminated account can still accrue charges and accept monthly payments; and requesting a copy of the default notice as there isn't one on our credit file; and also how it took 19 months for this correspondence to reach us, we got a letter from the court yesterday demanding a £20k+ payment to NR.

 

We have contacted NR to find out why they went ahead without providing us with the information we asked for, and have basically been baffled with terminology. We were told in May that their solicitors would write to us, but so far the only correspondence we have had about this is from a court demanding payment - they haven't even had the decency to tell us themselves!

 

We're stuck now, and don't know what to do - apart from going to CAB tomorrow.

 

We were told though on the phone again today that if we'd have paid the court fees they would have dropped the case. It just doesn't make sense. I wriote to them informing them about the default notice not being served properly and was told that it's a different thing on an unsecured loan!

 

Oh, and we are still paying them!!!

 

Any advice nomatter how large or small is appreciated.

 

Thanks

 

 

Hi Skints,

 

looking at this, it seems supersleuths is right.

 

If you fell into arrears with an unsecured loan, then you will need to look at the terms and conditions of the loan.

 

NR should have served you with a default notice, are you quite sure you've never had this?

 

If so, then you can apply to set aside the judgement made on the grounds it was not legally applied for.

 

I would suggest before you do this, you make a data subject request and request all info on your file.

 

It sounds like they've defaulted you. called the balance due at which point payments will be allocated, but you still owe the whole amount as they have in effect said they are calling in the loan (they can do this if they have legally defaulted you).

 

Then they've taken action, at which point they've said you need to pay the court fees as well as the arrears to stop action. Not quite correct, if you pay the arrears then you are not in default, the costs can still be charged but unlikely the judge would agree if you are not in default of the payments.

 

I think following Sleuths advice is best, buy your self time, get the data and come back to us.

 

Meph

[Suetonius]

I've had a loan with NR for some time now. The agreement was for £17,250 in 2004.

 

I know this is the mortgage & secured loan sub forum, but could you confirm if this was a secured loan. If it was, could you also confirm when you received the funds (before of after 31 October 2004) and if NR took a first or second charge as security.

 

Thanks

 

Sue

[TheSkints]

Hi Sue

 

Having had a quick look through the paperwork, the contract was offered in february 2004 and agreed in April 2004. Does this make a difference to anything?

[TheSkints]

oh, and its unsecured - i think i'm in the wrong forum now!

[Suetonius]

oh, and its unsecured - i think i'm in the wrong forum now!

 

In that case, all the above about the default notice is correct

[TheSkints]

Thanks Suetonius.

 

I'm just composing a letter tot he courts anyway, about it.

 

I'll let you know how i go on, but thanks for taking your time to advise me.