Credit Card Companies Removing Defaults

[Mustard]

I've been reading with interest the points that if you have had a default registered against you through a penalty charge it must be removed by the offending bank/CC company.

 

With this in mind where do I stand....

 

I have fallen behind on my Credit Card payments. Obviously they have then charged me late payment/over limit fees etc. A few of the CC companies have registered defaults against me for this BUT as I was already in arrears am I basically stuck with the defaults or as the charges were 'illegal' will they then have to remove them for me.

 

Sorry if it doesnt seem very clear what im trying to say??!!

 

For example

 

I owe CC company £10k at a minumim monthly payement of £200pcm. I run out of money to continue to make the minimum payments. Obviously the CC company then starts charging for late payments etc etc. After a couple of months the CC company says right Mr Mustard we are now registering your account in default blah blah blah.

 

Is this default therefore illegal????

 

Thanks in advance.

[alanfromderby]

The difficulty is that this has not yet been tested legally. However, it could certainly be claimed that unlawful charges applied to the account prior to the default were a contributing factor, at the very least - and in some cases the only factor.

 

I would guess that the legal question would be about what percentage of the defaulted sum being unlawful charges would make it incorrect. However, this is for greater legal minds than mine - hopefully one will be along shortly.

[alanfromderby]

I have just found this response posted by bankfodder elsewhere:

 

However it seems to me that you have to take an overall view of the fairness of the default notice.

 

So if you have been defaulted for £600 on which £30 was an unlawful penalty then I would say that the default notice is unfortunately broadly correct. This is because, as far as I know, default notices don't record the sum in default. If I am wrong on this then let me know because then it becomes a completely different matter.

 

On the other hand if the default was for £600 of which £570 was unlawful penalty charges then I would say that the default notice is incorrect. If you agree with these two positions then you have to agree that somewhere in between is a line between fair and unfair. You might say that it is at 50% but I would say that it would be weighted rather more in favour of the consumer. maybe 65/35 but who knows.

 

Then you have to look at the circumstances of the default. If only 20% of the sum is comprised of penalties, it might be that the default is not incorrect. On the other hand you might want to argue that if it had not been for the burden of the unlawful penalties that you might have been able to control the debt and that it would never have gotten out of hand in the first place. If this is the case and you can argue it then you could say that the default is unfair.

 

Once again, this is only a view.

[Mustard]

Okay thats what I thought (and feared!) has anyone any ideas of how to proceed with getting defaults removed, as they are going to be right an obstacle in my plans for the next year or so (moving house etc)

[jonni2bad]

There is a paragraph in the Letter Before Action (LBA) that includes the request to remove a default issued because of charges.

 

I will be going down this route myself, but others may have decided to claim refunds seperately and resolve the defaults later...

 

More recently, some LBAs have suggested to the bank that removing the default before court action may prevent a further case of a claim for defamation of character.

 

All of the above really depend upon your own set of circumstances (especially in relation to the amount of charges v default amount arguement above).

 

For me it seems more straightforward - Charges amounted to £1292 and the default was around £700. If at all possible, I'm going for the hat-trick of refund, default removal and damages.

[Mustard]

Do you think that just baffling them with requests may work - for example...?

 

"Please refund me £xxxxx and whilst your at it remove the illegal defaults you entered with regard to this account"

 

:confused:

[jonni2bad]

All the wording you need is in the LBA letter in the Templates section - best to stick to the script!

[Mustard]

This topic was closed on 2019-03-08.

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