Can a default notice be placed when an account is in dispute (SLC)

[bertsuzuki]

Title says it all really. I won't bore everyone with the details. Student loans were the old style pre 1998 type. No contact from 1999 to 2007 when i popped up on the land registry. Sent the obligatory statute barred letter clearly stating account in dispute. Got back the response that they couldn't use court action to recover the monies - result! Next they send me a statement of account and letter demanding immediate payment - i countered with claim of harrassment. latest update - 3 letters in 4 days demanding 3 different amounts of payment from £3.5k to £4.2k (can't even get there own figures correct.....) and a threat of default notice with CRA.

 

Can anyone point me in the direction of whether a default notice can be placed on the account when it is under dispute, or statute of limitation barred?

 

Also, what the legalities would be of entering a default notice regarding a debt that was effectively defaulted on in 1999, but with the default starting from 2009?

 

Thanks

[smouk]

They shouldn't but they probably would.

[bertsuzuki]

Bump - anyone else?

[fermi]

From: Technical Guidance Note - Filing defaults with credit reference agencies

 

Time framework

 

Although there will be some flexibility in the definition of a breakdown, we believe there should be general rules for the minimum period of arrears which should exist before a default can be filed. Equally there should be a maximum period after which, if anything is to be recorded with a credit reference agency, a default must be filed. The following are in line with the practices currently adopted by most lenders.

 

• Accounts should not be routinely filed as being in default where full payments or those due under a rescheduled agreement are fewer than three consecutive months in arrears.

• Accounts should normally be filed as being in default where those payments due have not been received for six months.

 

This time framework only relates to filing defaults. It does not affect the lenders’ ability to continue to report accurately on the extent of arrears using monthly status codes. We recognise that may not always be appropriate for products which advance credit over either a very short or very long-term.

[kurvaface]

I have read somewhere on this forum that SLC may create problems for themselves because students form the pre 98 era hadn't given consent for this kind of data sharing.

[r&b]

read BRWs take on this post # 35 here:

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/181662-amex-stat-demand-what-2.html

[bertsuzuki]

Text of letter to be sent:

 

Pauline Curran

Collections Operations Manager

Student Loans Company Limited

100 Bothwell Street

Glasgow

G2 7JD

 

17th June 2009

 

Ref

 

Further to your latest correspondences (multiple) dated xxth June 2009 – Notice of intention to register student loan defaults. It is noted that you “intend to make all student loan defaults a matter of public record and pass default information onto credit reference agencies.”

 

As you are fully aware and as made very clear in my correspondence of xxth February 2007, acknowledged by yourselves on the xxth of May 2007 I consider the account to be in dispute.

 

The Office of fair trading guidance clearly states that: “putting pressure on debtors, or third parties is considered to be oppressive; this includes ignoring disputes about whether money is owed and refusing to freeze action if a debt is in dispute.”

 

As this account is in dispute and has been since the xxth of February 2007 this is a breach not only of the OFT collection guidelines, but also a breach of the Consumer Credit act 1974 and the data protection act 1998.

 

OFT debt collection guidance states further that “continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to section 40 (1) of the administration of justice Act 1970.”

 

Your recent correspondences are in breach of this guidance. Your correspondence of the xxth June 2009 is clearly a demand for payment of a debt that is barred by statute.

 

.

 

 

 

 

Further more, OFT guidelines state that “It is unfair to communicate, in whatever form, with customers in an unclear, inaccurate or misleading manner” as you can see from your own figures detailed below you give wildly differing amounts for the disputed amount owed and no indication of the reason for charges issued.

 

Correspondence dated the xxth May 2007 - Total amount owed £4xxx.xx

 

Correspondence dated the xxth December 2008 – Opening balance £43xx.xx, total arrears of £36xx.xx.

 

Correspondence dated the xxth June 2009 - Total arrears of £36xx.xx, total charges £32.00, total amount £37xx.xx

 

Correspondence also dated the xxth June 2009 - Total charges £32.00, total balance due £44xx.xx

 

There is no breakdown of the amounts in question, a difference of £7xx.xx in the two amounts claimed on the xxth June 2009 and no indication of the nature of the charge of £32.00. In short, this is unclear, inaccurate and misleading, again a breach of OFT guidelines.

 

Furthermore, “charges should not be levied unfairly” examples include not putting the specific amounts that can be added for collection costs in the original credit agreement. Your charges guide issued as part of the demand (applies from September 2004 – original credit agreements date from 1993 to 1996) clearly states that third party charges and litigation fees are at cost, hardly a specific amount.

 

The Information Commissioner’s office Data Protection Technical Guidance to Filing Defaults with Credit Reference Agencies states that under the terms of the Data Protection Act 1998 “personal data is processed fairly and lawfully” [section 2] and that “if a record is unreliable or based on none standard criteria, it is unlikely to be meaningful to another lender. In these circumstances it would be unfair for a lender to process the data to assess an individual’s credit worthiness [section 2]”

 

With this in mind I would refer to section 9 - “where there is an unresolved dispute about whether a default exists lenders should refer to paragraphs 42 – 45” which states in section 43 “If we conclude that there is a genuine, reasonable and unresolved dispute between the borrower and lender, then we are likely to find that personal data have been processed unfairly if a default has been filed. Defaults filed in these circumstances may also be inadequate for the purpose of credit referencing in that they do not provide meaningful information about the credit worthiness of the customer”

 

 

 

 

 

 

Section 11 - Time Framework - clearly states that “there should be a maximum period after which, if anything is recorded with a credit reference agency, a default must be filed. Accounts should normally be filed as being in default where payments due have not been received for six months.” Your correspondence of xxth June 2009 states that the account was scheduled to be paid by 31st of March 2004.

 

As you are aware I am fully conversant with the OFT debt collection Guidance and the Consumer Protection from Unfair Trading Regulations of 2008 and as you have chosen to ignore my dispute and continued to press for payment I have no choice but to file an initial complaint with the OFT (copy included.)

 

If any adverse comments are made on my credit reference files I will not hesitate to take legal action under the Data protection act 1998.

 

 

Yours faithfully

Edited June 18, 2009 by bertsuzuki

[kurvaface]

looks good

[bertsuzuki]

Text of letter to OFT

 

Enquiries and reporting centre

Office of Fair Trading

Fleetbank House

2-6 Salisbury Square

London

EC4Y 8JX

 

xxth June 2009

 

Dear Sir / Madam

 

I would like to complain in the strongest of terms with regard to the actions taken by the Student Loans Company (contact details enclosed) that continue to breach guidelines set out by the Office of Fair Trading. My concerns for complaint are outlined in my latest response letter to the Student Loans Company dated xxth of June 2009 [copy enc.]

 

On the xxth of February 2007 I wrote to The Student LoansCompany regarding an expired debt that was alleged to be owed by myself. That letter was received and subsequently responded to on the xxth May 2007. [Copies enc.]

 

In this letter I pointed out the following items:

 

1) Under the Limitation Act 1980 Section 5 "an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued".

 

2) The OFT say under their Debt Collection Guidance on statute barred debt that "it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period".

 

 

 

 

 

cont.

 

 

 

 

3) The last correspondence/payment/acknowledgement or payment of this debt was made over six years ago and no further acknowledgement or payment has been made since that time. Unless you can provide evidence of payment or written contact from me in the relevant period under Section 5 of the Limitation Act, I suggest that you are no longer able to take any court action against me to recover the alleged amount claimed.

 

 

4) The OFT Debt Collection Guidance states further that "continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970".

Since then I have received further correspondence [copies enc.] regarding the disputed debt, demands for repayment and Notice of intention to Register Default. It is clear that the original contact regarding this debt may well have been in breach of the Office of Fair Trading Guideline referred to in item (2). Furthermore, subsequent correspondence is in breach of Office of Fair Trading Guidelines referred to in item (4) and directly constitutes harassment.

There is also a blatant disregard of The Information Commissioner’s office Data Protection Technical Guidance to Filing Defaults with Credit Reference Agencies in respect of disputed debt.

Many thanks for your help in this matter.

 

Yours faithfully

 

 

 

 

Enc.

Edited June 18, 2009 by bertsuzuki

[kurvaface]

Looks good too.

 

Beware of SLC + thugs who read this forum. Perhaps the amounts being claimed in your letters above should be slightly vaguer if you get my drift:-)

[bertsuzuki]

Point taken and amended. Thanks. I'd like to say it's nothing personal with the SLC, but i know my rights and i'll be damned if i'm going to be bullied over a 15 year old debt. They sometimes forget that the students of 15 years ago are now contract lawyers, barissters, accountants, etc..... their shear pig headedness is just annoying.

[avatari]

bertsuzuki, what was the outcome of your letter please?

[bertsuzuki]

In a nutshell they've given up on me by the looks of things!

 

Ironically I received a statement of account from them this morning with a massive disclaimer at the top stating that its "not a demand for payment, for information only." The best part about it is that my rate of interest is now at -0.4 % (yep minus!) so they're now paying off their own loan! I've yet to establish whether I could argue that this constitutes continued harrassment as it is not a demand..... Depends how much they choose to annoy me in the future!

 

The OFT have been great. Although they say won't take up individual cases I have a case officer assigned to me! I have signed all their disclaimers allowing them to use my correspondance in any future case that they build against the SLC. They are fully in agreement with me that the SLC cannot demand payment of the monies and that their actions have clearly constituted a form of harrassment that breaches their guidelines! They are not very impressed with the SLC!

[avatari]

well done! plenty of fishing going on by slc and by thesis/link at the moment, yours sounds like typical cases i keep reading on the forum.

 

backing up your experience of their bluff and bluster, i've still yet to hear of anyone actually receiving a default on their credit file, probably for the reason that kurvaface points out. I assume that probably relates to post-1998 accounts too, although they may have added that clause to their t&Cs more recently. I'm sure someone here will know?

[bertsuzuki]

Text of the follow up letter I sent for anyone who needs it.....

 

Pauline Curran

Collections Operations Manager

Student Loans Company Limited

100 Bothwell Street

Glasgow

G2 7JD

xx June 2009

Ref : xxxxxxxxxxx

IN DISPUTE

Further to your latest correspondence of the xx of June 2009 – Notice of sum in arrears, it is again noted that you have blatantly chosen to ignore Office of Fair Trading debt collection guidance.

The Office of Fair Trading guidance clearly states that “continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to Section 40 (1) of the Administration of Justice Act 1970.” Also, “putting pressure on debtors, or third parties is considered to be oppressive: this includes ignoring disputes about whether money is owed and refusing to freeze action if a debt is in dispute.”

You are clearly aware of the OFT guidelines (I have included a copy of the relevant guidance in case you are not.) Your inclusion of their own information sheet demonstrates this awareness, yet you continue to ignore the guidelines and my own concerns when sending out your standard demand for payment letters that constitute psychological harassment and continue to cause considerable stress to myself and my family.

I would again point out that under the Limitation Act 1980 (Section 5) “an action founded on simple contract shall not be brought after the expiration of six years from the date on which the action accrued.”

As you have given me notice under the Consumer Credit Act 1974 in your latest correspondence you will be more than aware that you are in breach of this act through your ongoing failure to acknowledge that the debt is in dispute.

OFT guidelines state that “It is unfair to communicate, in whatever form, with customers in an unclear, inaccurate or misleading manner.” On the 10th of June 2009 you claimed a total balance due of £xxxx.95. On the 18th of June 2009 you claim that I owe £xxxx.34, once again a claim for differing and inaccurate amounts.

Copies of your correspondence of the xx June 2009 and any subsequent correspondence (again, clear breaches of OFT guidance) will be forwarded to the Office of Fair Trading for their records.

Yours faithfully