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RBS won't remove CRA default made solely of THEIR PENALTY charges **WON UNDER BCOBS**

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Hi all,

 

My wife and I are about to apply for a mortgage so we thought it prudent to get copies of all our credit files to see exactly what might be there,

as we've had financial difficulties in the past.

 

The reports are all good, apart from a default from RBS for £268 for a current account my wife had at a previous address. Looking back at the paperwork we have, my wife used this account up until mid-2009 when she wrote to RBS asking them to close the account, at a time the account was inactive with a few pounds left in it.

 

We moved house shortly afterwards.

 

It appears they didn't close the account and the resulting current account maintenance charges mounted up at £20 a month until the account became overdrawn,

so they added charges for that too until they finally defaulted her for nearly 300 quid!

 

I'm up for a fight with RBS as we have copies of the letter we sent asking them to close the account and we wouldn't have received any mail from that old address as we only redirected mail sent in my wife's (by then) married name, the (as we understood it) now closed RBS account being the only one left in her maiden name.

 

Bearing in mind it's for a smallish amount and made up entirely of charges, do you think I have a reasonable chance of getting RBS to strike this off? My intention is to SRA them in the first instance, to see if they received our original letter. If so, then I will ask nicely and make a goodwill gesture towards the charges in the interests of reaching a satisfactory outcome. If I get no joy from that, I intend to hit them hard and make them present the paper trail of default notices etc.

 

Does anyone have any advice?

 

Cheers

 

BL

Edited by biglad1975

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Hi all,

 

Top line is my wife had an RBS current account up until 2010. She wrote to them asking for it to be closed after she stopped using it as by then we'd married and had moved to a joint account.

 

We moved house shortly afterwards and no mail (in her maiden name) was forwarded. We now discover a default on her file and it turns out RBS had not closed the account as requested,

had continued to charge her for it and eventually defaulted her for £392, an amount made up entirely of charges as the account had £2 in it when she asked them to close it.

 

We wrote to them pointing out that this was their mistake but in the interests of expediting a speedy outcome without resorting to the Information Commissioner etc., we would make a without prejudice gesture of £100 towards their costs if they would remove the default marker.

 

They have replied saying that as the default amount was made up of charges and penalties then they would waive the £392 and mark the account as 'partially settled', but that they did not receive any correspondence from us regarding closing the account and that they felt the default had been applied fairly and within the terms and conditions we had accepted.

 

If we wanted a 'settled' marker then we would have to pay £392!

 

I'm not going to let this drop.

 

We might not have proof of posting (it might be at my in-law's in a big file in the loft, we haven't been able to get in there yet) but this is their word against ours.

 

As a mortgage is at stake I'm willing to take them to court if needs be, as I guess then it would come down to a judge making a decision as to whether the letter was posted or not.

 

Any advice?

Edited by biglad1975

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Did these charges all happen after November 2009? If so have a read up about BCOBS....that may be a way forward for you to get all of the charges removed and the associated default if successful.


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If a default sum is made up entirely of charges without which the account would not have been defaulted then no default should be placed: (source ico guidance on defaults).

So formal omplaint to rbs data controller by recorded delivery, the default is unfair.


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The charges were all applied in 2010. I need to move quick on this though as we're trying to get a self build mortgage to build a house.

 

Could I just hit them with a 'letter before action' saying that I'm going to take them to court for improperly processing the data

'as there is a genuine, reasonable and unresolved dispute' between the lender and borrower'?

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The default is unfair so yes lba in order!


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I would suggest that you start off by trying to see what evidence you have.

Search for the copy of the letter. This is very important. Do you have the letter on your computer disk?

Send an SAR to the bank. You never know, there may be something there.

 

If you can find the letter then you are home dry - it will be fairly - although you will still have to force them.

 

If you can't find the letter, it will be much more difficult - but do-able.

 

Of course, you will have to say that you did write and close the account - but it will be your word against theirs'. Your main argument is that the charges are unfair. We would be happy to help you with this - but it won't be straightforward because the bank will fight tooth and nail to defeat you.

 

Start finding out what evidence you have and then go from there


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i would think the BCOBS threat might work very quickly here.

 

default is wrong - made of PENALTY charges.

 

the charges are wrong - under BCOBS.

 

they have admitted fault.

 

slam dunk

 

dx


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I don't think that they have admitted fault here. They have made a partial offer but that's all.

 

Like all of these people, they would rather do something very beastly to their own grandmothers rather than clear a credit file.

Getting the money back will be easy. Getting the credit file sorted will take more than a threat of BCOBS. However, I think that it is winnable - but will take effort


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Thanks guys.

 

The issue is that a default effectively closes us out of a couple of self build lenders altogether and will make the whole process more expensive

 

so it's definitely a fight worth winning, especially as it's all charges and penalties.

 

The plan is, I'll reply to their letter with another 'c'mon guys, be reasonable' letter,

reminding them of their obligations under BCOBS but this time underscore that I'm VERY serious about taking this all the way to the County Court if needs be,

via an SRA and an objection made to the Information Commissioner.

 

Interestingly according to my solicitor pal, legally speaking proof of posting isn't strictly speaking a problem in court,

as the Interpretation Act 1997 s7 makes it clear that a document sent by first-class post is deemed served.

 

I'll post up my letter later, cheers all.

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They have replied saying that as the default amount was made up of charges and penalties then they would waive the £392 and mark the account as 'partially settled',

but that they did not receive any correspondence from us regarding closing the account and that they felt the default had been applied fairly

and within the terms and conditions we had accepted.

 

I don't understand the banks position. You were £2 in credit so if no debits came in, the only thing that would put the account in the red would be the bank's own charges. As they have agreed to waive the charges, surely the account should be £2 in credit -where is the default?

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NO this is unfair reporting and needs to be taken to the ICO.


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Thanks guys. The issue is that a default effectively closes us out of a couple of self build lenders altogether and will make the whole process more expensive so it's definitely a fight worth winning, especially as it's all charges and penalties. The plan is, I'll reply to their letter with another 'c'mon guys, be reasonable' letter, reminding them of their obligations under BCOBS but this time underscore that I'm VERY serious about taking this all the way to the County Court if needs be, via an SRA and an objection made to the Information Commissioner. Interestingly according to my solicitor pal, legally speaking proof of posting isn't strictly speaking a problem in court, as the Interpretation Act 1997 s7 makes it clear that a document sent by first-class post is deemed served. I'll post up my letter later, cheers all.

 

 

They won't be interested in your "reasonable letter". They won't be fazed by your "very serious" statement.

 

They won't be at all bothered by your "all the way to the County Court" threat.

 

They will think that it is a great laugh that you might complain to the ICO.

 

The ICO will just think that you are another damned nuisance and will get round to sending you an acknowledgment in due course.

 

Your solicitor pal is talking about what happens between "legal gentlemen" and not between a bank and its troublesome customer

- even though the 1997 Act is of general application -

and even then, your solicitor pal may not have told you that for a first class post argument to work,

 

you will almost always need to have the copy letter in your hand to wave around in front of the judge

- which is why I told you -

to get the evidence and then we'll see the best way to proceed.

 

By all means write your letters to the bank but at the same time, send the SAR.

 

But don't hold your breath waiting for them to see reason.

They are incapable of it.

 

Show us the letter and if it is that important to you, get moving now.

 

Set the timescales.

 

Don't let them divert you. Keep control and assert yourself all the way.

We'll support you every step


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Ok guys here it is:

 

RBS

SOMEWHERE IN THE UK

 

Thank you for your letter dated XXXXX, where you state you are unable to agree with my complaint that the default was ‘applied incorrectly’ to my former account.

 

I am grateful for your acknowledgment that most of the outstanding balance was made up of charges and penalties

and that you have agreed to forgo recovery of the outstanding balance of £392.02 and mark the account as partially settled.

 

I am however gravely disappointed that you feel the default has been ‘correctly applied’ in accordance with the terms and conditions that I accepted when opening the account.

 

In fact, my original complaint was not that the default was ‘incorrectly applied’ at all,

as I well understand that under the terms and conditions of the account,

the entering of a default flag would be the final stage of the Bank’s debt management cycle for an overdrawn account.

 

My complaint was actually that the default was invalid and unfair when judged against the terms of guidance from both the BCOB and the Information Commissioner.

 

As far as I was concerned, the account was closed and our banking relationship was concluded.

The fact that you had not actioned my letter for reasons presently unknown is the cause for complaint, rather than specifically the default itself.

 

I believe that it is unfair, as you have a statutory duty to treat me fairly and have regard to my best interests over yours.

Accepting that the default amount was mostly charges and penalties is graciously acknowledged but the fact that the default remains,

to the detriment of my good standing in the eyes of other lenders is neither fair nor in my interests.

 

Additionally I believe that it is invalid as I remained within the terms and conditions of the account by requesting it to be closed at a point when the account was in credit and dormant.

 

I had no reason to believe that our relationship was still ongoing and as such there was no obligation on my part to notify the Bank of any subsequent changes of address or name.

 

Might I remind you of your obligations under the BCOB guidance, which is clear in its summary of unfair practices that are in evidence in this case:

 

• Levying charges on unpaid direct debits or cheques.

• Treating bank-imposed charges as unauthorised borrowing.

• Levying charges upon charges.

 

The Information Commissioner is equally unambiguous:

 

“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 creditworthiness of the customer”

 

I strongly believe that in this case there is sufficient mitigation for the default to be removed due to it being processed unfairly. Namely that:

 

• Correspondence was sent in XXXX to the RBS XXXXX Branch asking for the account to be closed, in accordance with the Bank’s own terms and conditions.

• The account was subsequently not closed and became overdrawn entirely with charges and penalties.

• The Bank levied charges upon charges.

• The Bank treated its own charges as unauthorised borrowing.

• A default was issued without my knowledge, with no method of recourse.

• With regard to the above, the Bank is in breach of the Data Protection Act 1998 in processing a default under such circumstances.

• You are in breach of your obligations to Treat Customers Fairly as required under the Banking Conduct Of Business (BCOBS) regulations 2009 which have been introduced by the FSA under the Financial Service and Markets Act 2000.

 

As I explained in my previous letter, the presence of a default on my credit file is proving to be highly problematic in my search for a self-build mortgage lender.

I am highly motivated to ensure a positive outcome from this, no matter which channels must be exhausted in the process.

 

Please remove the default marker from all three credit reference agencies or my next step will be a full Subject Access Request,

a complaint to the Financial Ombudsman and the Information Commissioner

and if necessary, action in the County Court to prevent you continuing to process my information incorrectly in this way.

 

I hope that such drastic measures will be unnecessary and common sense will prevail.

 

Please also note that my address has changed and is noted at the top of this letter.

 

Yours faithfully,

 

XXXXXXXXX

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If and when they respond to your DSAR request, check for when a Notice Served under Sections 76(1) and 98(1) of the Credit Consumer Act 1974 was issued (this is the Overdraft Termination/Default/Recall notice) was issued against the Account.

The date/ the amount/.....verify the date (old property address/new property address) does the date tie in with your CRA Default file?.

 

If it was never issued on the DSAR then they cannot place the default marker.If it was issued why to the wrong address ? You was denied the opportunity to rectify any breach.

 

Regards

 

Andy


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Quick update on this all - got a letter from RBS saying they apologised for the inconvenience and have written off all charges and will update the credit files to have any default notices, formal demands and written off debts removed. These changes will be reflected by the end of this month.

 

SUCCESS!

 

Thanks to all!

Edited by biglad1975

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Blimey. Well done.

 

This is about the third time I have seen the RBS cave in to BCOBS threats.

 

Very well done.


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Excellent result Biglad

 

Delighted its been resolved to your satisfaction.

 

Regards

 

Andy


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Quick update to this.

 

Despite having written confirmation that RBS would remove all default info and balances and adverse information by the end of February, it still hasn't been done.

 

I raised a dispute with Equifax over this and they now inform me that RBS haven't replied to their query within the required 21 days,

so it has been removed from my wife's file, pending further enquiries.

 

I have also sent them a copy of RBS's letter to us.

 

The moral of the story is DON'T TRUST THE BANKS TO DO WHAT THEY SAY THEY WILL DO. Even if you win, make sure that the CRA is your first port of call to get the files corrected!

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Complain to the Banks Data Controller!!


Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

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Complain to the Banks Data Controller!!

 

I may do. The main thing is it's off the file, effective immediately. If they can't be bothered to reply to Equifax then I doubt they'll do anything about it in the future, especially as Equifax have only done what RBS said they'd do.

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THE whole infrastructure of the RBS group is chaotic and the conduct should be reported to the ICO.


Any Letters I Draft are N0T approved by CAG and no personal liability is accepted.

Please Consider making a donation to keep this site running!

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Update to this - it's reappeared! So now despite a letter from RBS saying that they'd remove it with grovelling apologies, then them not responding to my dispute raised via Equifax and it being taken off due to this the [EDIT] have actually put it back on!

 

This is hard ball time now, with both Equifax and RBS!

Edited by dx100uk
behave - dx

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