Removing an overdraft default

[sophieq]

Hi all,

I've been spending a lot of time reading through the forums on the subject of default removal and have found quite a lot of contradictory information. My case seems quite typical so I thought I'd ask a series of common questions here in the hope that we can get a single post with lots of helpful answers.

OK, here goes.

1) My overdraft for c. £900 with HSBC was sold to Aktiv Kapital who then placed a default on my credit file

 

- Are they allowed to do this?

- What is the situation with CCAs etc. with transferred overdrafts?

- Is there a recognised method of removing such defaults?

 

2) I have never acknowledged this debt with Aktiv Kapital, although they have written to my current address on several occasions

- If I were to acknowledge the debt (e.g. to offer settlement) would I have to wait 6 years from that date for the default to drop off, or from the original default date?

- If the debt is ignored for the full 6 years, does it cease to be enforceable?

3) Aktiv Kapital have contacted me with a much reduced settlement offer (£250 rather than the original £900)

- Has anyone any experience of using such an offer as leverage for removing the default altogether? (i.e. they seem pretty deperate to get anything)

- Could any other measures be taken if they refused such an offer?

The dilemma a lot of people seem to be having is that there is no information on the likelihood of getting a default removed, so it's hard to know whether it's better to contact the DCA or to just keep your head down and wait for the 6 years to expire.

I'm sure a lot of people, not least myself, would be very grateful for any insights into these problems.

Many thanks,

Sophie.

[debt4get]

getting a default removed is difficult, especially if the debt is actually owed, with regards to cca this would not apply to overdrafts, the only thing was up until the judgement last week it would have been possible to have a look at the amount of charges and claim some of them back against the debt owed. i believe there is another case now going forward about the amount of charges that the banks have levied as being disproportionate to the amount of work that they actually do for unauthorised overdrafts.

if you are going to pay ak on reduced settlement make sure you get everything in writing including undertaking that default is removed.

you could wait the 6 years and it will automatically drop off your credit files.

hope some of this helps

[sophieq]

@debt4get many thanks for the reply - i guess this is made more difficult for a lot of ppl following the bank charges case last week.

 

It'd be great if anyone else could add any replies to the specific points in the OP, a lot of people are struggling with understanding these issues and there seems to be little specific advice anywhere on the net regarding defaults on overdrafts, esp. ones that have been sold on.

 

I think the other problem area is that of balancing the chances of getting it removed -vs- waiting for the 6 years to be up. i.e. if I write to AK now with a settlement in return for default removal they might refuse and then badger me for years to come. Am I better off just waiting for the 6 years to be up?

 

Many thanks for any help as usual guys!

 

Sophie.

[3tea]

Sophie,

 

I have had three overdrafts where the bank have stuffed up the default notice for various reasons.

 

It may be that they have done it to you too, and if they have, you could challenge the original default.

 

Do you have the original default notice and termination letter?

If so, can you post them on here minus your personal details of course?

 

regards,

 

3tea

[Deb T]

OK, here goes.

 

1) My overdraft for c. £900 with HSBC was sold to Aktiv Kapital who then placed a default on my credit file

 

- Are they allowed to do this? Was the selling of the debt accompanied by an assignment notice?

- What is the situation with CCAs etc. with transferred overdrafts?

- Is there a recognised method of removing such defaults? Nope

 

2) I have never acknowledged this debt with Aktiv Kapital, although they have written to my current address on several occasions

 

- If I were to acknowledge the debt (e.g. to offer settlement) would I have to wait 6 years from that date for the default to drop off, or from the original default date? If you were to offer a settlement you might want to tie in that he default be removed from your file as per your comments lower down.

- If the debt is ignored for the full 6 years, does it cease to be enforceable? Yes, as long as you've not acknowledged you owed the money or made any payment within six years and with a few notable exceptions such as debts to the taxman and some some mortgage repossession shortfalls

 

3) Aktiv Kapital have contacted me with a much reduced settlement offer (£250 rather than the original £900)

 

- Has anyone any experience of using such an offer as leverage for removing the default altogether? (i.e. they seem pretty deperate to get anything)

- Could any other measures be taken if they refused such an offer?

Simple choice really, tie in that the default be removed and if agreed make sure you have it in writing before you make any such payment or pay them and remove the debt and then concentrate on removing the default (if they're not in agreement)

One further point that you've probably considered but may have overlooked is if you enter into correspondence with them regarding a full and final settlement I'm reasonably sure this is an acknowledgement of the originl debt and would reset the clock on stat barred. Also, the £250 offered by Aktiv may be a sprat to catch a mackerel as in you haven't put your head above the parapet yet...they may be hoping you'll take the bait and contact them and at least they'll have a base for future contact with you. Just because they've offered you a 'significant discount if you contact them with a view to payment' does not mean that they will or that they have to as in check the small print.

[hungrybear]

FIRSTLY and most importantly.

 

YES, it is perfectly correct to cca for an overdraft. It is running account credit under section 10 of the cca. It is most probably exempt from part v (form and content) but that is for them to say not you and there must still be an agreement and they must still default you under 87(1) before they can sell it.

 

Getting CRA data corrected is a pain the the butt, cra's like to hold it over you.

 

The easiest way for you to deal with this now is to write to aktiv and make a full and final offer contingent on them removing (not just amending) the default. Point out to them that they have no authority under the DPA to process your data and if necessary you will issue court procedings to force the removal of unlawful data from your CRA file. However you would sooner come to an amicable arrangement for all parties. Point out that this is not an admission or acknowledgment of the debt you just feel it would be simpler to pay £250 to get the default removed then get involved in a lengthy court case, which you are confident you would win.

 

IF the default will not create any issues for you then yes wait for it to drop off your file. Trouble is some of these slimy toads keep putting new information on your file

[sophieq]

Hi guys,

 

Thanks for all the brilliant advice.

 

@3tea I moved house after neglecting this overdraft and so I didn't recieve any letters of termination, defaults etc. is this important? The actual default on my credit history is from Aktiv and not HSBC

 

@Deb T - as above, I didn't recieve any correspondence regarding this at all, as I'd moved house.

 

 

@hungrybear - one thing I'm not really clear on is stuff about Aktiv not having the authority to process my data. Does this mean that the aren't allowed to default me? I'm not sure how I could mention this in the letter below, any advice would be gratefully recieved!

 

Can I just run my reply to Aktiv past you guys, based on your comments?

 

 

 

Re: Account no: xxxxxxxx

Dear Sir,

I am writing in response to your letter dated xx/xx/xx regarding the above account.

I am willing to settle this account with the sum of £250 mentioned in your correspondence on the following conditions.

i) That this is a full and final settlement of this account

ii) That the default registered by yourselves with Experian and Equifax in March 07 is removed from both agencie's records

This offer is in no way an admission or acknowledgement of liability for this debt but merely an attempt to resolve this situation as quickly as possible.

Yours etc.

 

 

Many thanks for any more help guys.

 

Sophie.

[hungrybear]

Hi guys,

 

Thanks for all the brilliant advice.

 

@3tea I moved house after neglecting this overdraft and so I didn't recieve any letters of termination, defaults etc. is this important? The actual default on my credit history is from Aktiv and not HSBC

 

@Deb T - as above, I didn't recieve any correspondence regarding this at all, as I'd moved house.

 

 

@hungrybear - one thing I'm not really clear on is stuff about Aktiv not having the authority to process my data. Does this mean that the aren't allowed to default me? I'm not sure how I could mention this in the letter below, any advice would be gratefully recieved! This would get complicated better to offer the remove the deafult bait at this stage.

 

Can I just run my reply to Aktiv past you guys, based on your comments?

 

 

 

Re: Account no: xxxxxxxx

 

I do not acknowledege any debt to Aktive Kapita of any company they claim to represent(, whether or not said company can spell or not, innit)

Dear Sir,

 

I am writing in response to your letter dated xx/xx/xx regarding the above account.

 

I am willing to offer a sum of £250 mentioned in your correspondence subject to the following conditions.

 

i) That this is a full and final settlement of this account

ii) That the default registered by yourselves with Experian and Equifax in March 07 is removed from both agencie's records. Note that this MUST be a complete removal and not just an amendment of the entry

 

This offer is in no way an admission or acknowledgement of liability for this debt but merely an attempt to resolve this situation as quickly as possible.

 

Yours etc.

 

 

Many thanks for any more help guys.

 

Sophie.

 

The bit with must in is crucial the rest is a suggestion the bit in green should be removed (obviously). You have to think like a toad when writing such a conditional offer:D.

[Deb T]

Also, you could always mark the letter at the top

 

Without Prejudice

 

Which will disallow them from producing the letter in the event of any court appearance.

[ncf355]

Add

 

iii) that you agree to make no attempt to pass the account to a third party or return it to the original creditor

[hungrybear]

good points by deb and ncf

[sophieq]

Great advice again, cheers all.

 

One question about the "Without Prejudice" thing though, I came across this link, How to use 'without prejudice' to protect your interests - Andrew Jackson Law Firm, which seems to suggest that using that phrase only protects you once a dispute is already under way. Anyone have any experience of this?

 

Many thanks again guys,

 

Sophie.

[hungrybear]

Great advice again, cheers all.

 

One question about the "Without Prejudice" thing though, I came across this link, How to use 'without prejudice' to protect your interests - Andrew Jackson Law Firm, which seems to suggest that using that phrase only protects you once a dispute is already under way. Anyone have any experience of this?

 

Many thanks again guys,

 

Sophie.

 

they have asked you for money and you dispute paying it?

 

I'm never sure how much protection it gives, I think a judge can overule it if material to a case but I'm sure the big words with the correct spelling will at least have them scrambling through their 'collins illustrated dictionary'

[sophieq]

Hi guys,

 

this took another turn today, I recieved the following two letters in the post.

 

First from "Meritforce"

 

========================

 

Reference: xxxx

Client Ref: xxxx

Pursuers: Aktiv Kapital

Original Creditor: HSBC Bank plc

Principal Sum: £998.25

AUTHORISED COLLECTOR VISIT

Due to nonpayment of the above amount we have been instructed by Mackenzie Hall Limited to collect this debt on their behalf.

An authorised collector will make a visit to your property within the next 10 days.

Should our collector inform us that no positive commitment towards clearing the debt has taken place, your account will be returned to this office and formal proceedings may be considered.

If you do not want our collector to call and would rather arrange settlement, you must contact our Clients Mackenzie Hall Limited on 015363 556 548 asking for Robert Taylor before the

10th December 2009

Should you fail to make a payment and action is taken, additional costs may be added to your debt.

We look forward to hearing from you. No more reminders will be sent.

Important: If you are not the named person above please contact our alternative number 0800 012 6179 to stop any further communication.

Yours Sincerely

[scribble]

Doorstep Collections Manager

Meritforce Ltd.

======================

 

and the second from "Mackenzie Hall", same page layout and font as the first letter, even the logos are the same

 

======================

 

Dear Miss Sophie xxx,

Our Ref: xxxx Client Ref: xxxx

We are attempting to contact the above named person regarding a personal matter. We have been provided your address as being the possible residential details for our subject.

Therefore if you are the person named above, then please contact our office on 015363 556 548 quoting reference number xxxx, whereupon further detailed information can be provided.

If however you are not the person named above and/or have any information regarding the persons possible whereabouts, then please contact our investigation team in confidence on the the alternative telephone number or email address below.

Telephone: 0800 012 6179

Email: [email protected] (Subject: Not Known/Goneaway)

We look forward to hearing from you as soon as possible.

Yours Sincerely

[scribble]

Alison Mackenzie

Mackenzie Hall Ltd.

=========================

I'm not sure what to do now, do I stick with plan 'A', or do I need to deal with these Mackenzie/Meritforce people now?

 

As always, any help gratefully recieved!

 

Sophie.

[hungrybear]

the first one does not make send they need to decide if aktiv or MH are there client. The second one provides no reason for you to contact, hence it can be ignored.

 

do any of the refs on the 2nd one match the first?

 

Most importantly these two companies are generally quite clueless.

 

Options I would suggest

1) tell merit it's in dispute with aktiv and tag on the doorstep bog off letter and ignore the second one

2)tell merit its indisput with aktive and they need to decide who they are approching you on behalf of and tag on the doorstep bog off letter and ignore the second one.

3)ignore both and wait for a reply from aktiv

 

personally I would go with option 2.

[sophieq]

Many thanks for the swift reply!

 

Yes, the references all match up, they do seem pretty clueless though, sending them both on the same day. They've even got the same office address in the header.

 

So you think I should still go ahead with the letter to Aktiv and deal with this bunch separately?

 

Sophie.

[sophieq]

Hi again guys.

 

I asked for some advice about this on another forum and the opinion there seems to be that I should first do a SAR on HSBC to ascertain the level of penalty charges on the original account, and to inform Aktiv Kapital of this to put the account 'in dispute'

 

My two concerns with that route are that

 

1) I'm admitting that I'm the person they're looking for

2) That bank charges won't really affect anything after the recent court case (or it'll take an age to sort anything out this way)

 

Any thoughts on this over here, help gratefully recieved as always.

 

Sophie.

[hungrybear]

did you send the settlement offer yet or not?

 

The fact is that involving MH and merit suggests they dont think they have much of a chance of getting the cash, you're at the bottom of the pile now!

 

SAR would be a WOT in my view. I would personally ignore MH and merit - both are mostly hot air and bluster companies BUT it's up to you

[sophieq]

No, I've got it ready to send, but had held off while discussing this a bit more on the other forum.

 

I'm inclined to agree with you that I should just send the letter that we drafted.

 

Have you got any idea what the chances of success are with these sorts of attempts? I'm guessing not great, but hopefully the fact they've almost written me off means they might be glad to get something.

[hungrybear]

No, I've got it ready to send, but had held off while discussing this a bit more on the other forum.

 

I'm inclined to agree with you that I should just send the letter that we drafted.

 

Have you got any idea what the chances of success are with these sorts of attempts? I'm guessing not great, but hopefully the fact they've almost written me off means they might be glad to get something.

 

It all depends on the phase of the moon and ......

 

It's worth a try is all I can say. You want the default off without much fuss and they need some money. It may well be that Aktiv have just sold it to MH who are a total bunch of wimbledon bankers and would see an offer of £250 as an invite to try and bully £500 out of you.

 

I would send the letter and see what happens.

[Deb T]

Hi again guys.

 

I asked for some advice about this on another forum and the opinion there seems to be that I should first do a SAR on HSBC to ascertain the level of penalty charges on the original account, and to inform Aktiv Kapital of this to put the account 'in dispute'

 

My two concerns with that route are that

 

1) I'm admitting that I'm the person they're looking for

2) That bank charges won't really affect anything after the recent court case (or it'll take an age to sort anything out this way)

 

Any thoughts on this over here, help gratefully recieved as always.

 

Sophie.

 

As far as I am aware a CCA request that is not adhered to i.e supplied , is enough to put an account innto dispute under the provisions laid out in the consumer credit act, however, I do not think there is any such provision under a the same act for a SARS request.

 

I'd send the letter and stick to your guns and keep sticking to them no matter what scare tactics they may try against you.

[Deb T]

Also, a sars request to HSBC is not directly admitting that you owe a debt but simply that you're requesting any information that the lender may have on you on an alleged account. Aktiv Capital and Mackenzie Hall will most likely not even be aware of your request, OC's tend not to communicate with appointed DCA's that well and certainly do not share as much information with them as what a DCA would probably like.

[sophieq]

Thanks for the input guys.

 

I think I'll send the letter we've drafted above to AK and also make a SARS request to HSBC at the same time, as fallback if plan A fails.

 

I'll let you kow how I get on.

 

Sophie.

[hungrybear]

have you figured out the point of the sars? I only ask because I'm struggling to see what it will achieve at this point. Not saying its wrong just saying there's no point sending it for the sake of it

[sophieq]

The person on the other forum I spoke to thinks I'm being too hasty jumping in with this letter and thinks I should do a SARS first and then look at options.

 

I think that I could end up waiting longer than the default has left to run if I take that route?