Defective Default notice ?

[CMH2212]

Hi,

Not sure if this is the correct section but need some advice regarding what makes  Default Notice defective and what constitutes the termination of a loan agreement ?

 

Default Notice received from Payday Loan Company on Tuesday 22nd October 2019, stating I had 14 days from the date of the letter (18th October 2019) to remedy by way of paying the FULL BALANCE. Account was just that day, 3 months in arrears with another 9 months of the agreement still left to run. 

 

I requested a "correct" settlement figure from them being as they had quoted the full amount including all interest, as if the loan had gone to term. Received an email from them advising the early settlement figure on Saturday November 2nd 2019, also advising the Default notice had already been applied and was in the process of being registered with the CRA. 

 

Complaint is already with the FOS regarding the unaffordability of the loan which the Payday Loan company didn't uphold, surprise surprise.

 

I complained to the Loan Company regarding the Default Notice (did not bring to light the wording of the days allowed to remedy, just made a formal complaint regarding it being issued and stating they had not provided me with a correct settlement figure.

 

Email received yesterday not upholding this complaint either, stating they had followed all related rules ?

 

They also state i was told in October (after DN was issued) that paying only the arrears would stop the DN,

 

  I never received any communication of the kind and do not speak to them on the phone so I think they are trying to back track a little here. Have kept all correspondence and not one email refers to paying the arrears i order to prevent the default notice. However, surely it is the wording on the actual DN itself, rather than something they may have said (but didn't) later ?

 

Can anyone with in depth  Default Notice knowledge advise me on what my options are ?

 

Does demanding the full balance in the Default Notice effectively terminate the agreement ?

In addition, is demanding the full amount instead of allowing me to remedy by paying only the arrears, effectively an unfair relationship ?

At what point is the agreement deemed to have been broken and in effect, terminated ?

As I said, on the day the default notice was issued, the account went 3 months in arrears, But the agreement still had 9 months to run.

 

 

Have seen similar threads from a few years ago but wanted some up to date and accurate advice if anyone can help ?

Thanks in advance

 

I am loath to broach the subject of a repayment plan until such time as I know what they are actually entitled to claim and what my rights are regarding the defective DN, but am wary of the situation escalating. However, I don't have the money to pay off the full amount

 

[AndyOrch]

Hi and Welcome to CAG

 

Have you referred to the terms and conditions of the agreement with regards to arrears and termination ? 

 

http://www.legislation.gov.uk/ukpga/1974/39/section/87

 

Andy

[CMH2212]

Many thanks for your response.

 

I hadn't as was lead to believe their own Terms and Conditions were over ruled by the FCA rules, is that not the case ?

Will dig out the terms and conditions and have a read through,

but do believe I have read on here somewhere that FCA takes precedence over a Company's terms & conditions.  

[AndyOrch]

Over ruled by the Credit Consumer Act 1974.

 

Did you not receive a Notice of Sums in Arrears ?

 

http://www.legislation.gov.uk/ukpga/1974/39/part/VI/crossheading/sums-in-arrears-and-default-sums

[CMH2212]

Hi,

One Notification of Sums in Arrears received 17th September.(first payment was due August)  Several arrears emails, but only the one Notification of Sums in Arrears. Is there any significance to this ? Had told them I would await the outcome of my complaint to them before making any offers to pay. The same day they emailed their final response they issued the DN letter.

Am just confused as to what constitutes an unfair relationship and also what is construed as the termination of the agreement. 

Edited December 3, 2019 by CMH2212

[AndyOrch]

I think 3 months in arrears is enough to warrant any default notice providing you was aware and had received notification NOSIA.Fixed Sum loans can be terminated on the breach and the issuance of the DN ....once the statuary 14 days had elapsed.

 

Again  I would refer you to the T&Cs of the agreement that you agreed to at the inception of this agreement.

[CMH2212]

Thanks.

 

But the 14 clear days  had not elapsed as they didn't allow for them.

DN was sent out dated 18th October, emailed dated 2nd November stated default had already been applied, so they have applied it too early on the back of a defective DN

 

I am not disputing their right to send out a DN, but it should allow 14 clear days and, if I understand correctly (which is why I am asking because I am not sure I do) they are supposed to give the debtor a chance to remedy the situation by bringing the account into good standing (FCA ? ) ....they did not allow me to do this.

 

I am still asking the question, what to do about the defective DN and is the agreement in effect terminated by demanding the full balance.

 

 

Have read through the credit agreement and I cannot find anything which states they are entitled to demand full payment if the account falls into arrears.

 

Does this have any impact at all ?

[dx100uk]

no but the DN is defective still 

doesn't give 14 clear days.

[AndyOrch]

Some fixed term loans allow for termination of the agreement on breach...subject to the amount of arrears and whether the account appears to have become unsustainable.

 

However the CCA 1974 section 87 (1 ) states...

 

 Need for default notice.

 

(1)Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

 

(a)to terminate the agreement, or

(b)to demand earlier payment of any sum, or

 

I suspect the default notice could be deemed invalid because you state that the DN states....

 

Quote

 I had 14 days from the date of the letter (18th October 2019) 

 

The DN should state the actual date that payment is required to rectify the breach...not 14 days from the date of this letter but an actual date required by.....the date of the letter is irrelevant unless its received on that day dated.Rectify being an important part of the legislation...to rectify is to pay the arrears and put the account back in good standing as if the default had not occured. You cant rectify by paying the full amount outstanding otherwise the agreement will not have gone its full term.

 

Perhaps scan redact and upload a copy of the DN lets take a look.

 

Andy

[CMH2212]

Thank you Andy. Will upload DN minus personal info in due course. Appreciate your help. 

[CMH2212]

Both pages as requested. Thoughts on how to deal with defective default would be appreciated 

Default_Notice_Oct.pdf

[dx100uk]

it says date which is 14 days from date of this notice

well thats incorrect

 

it should be atleast 14 days and should be expressed as a date not 14 days. 

 

so failed to allow postage time [at least 2 days even by 1st class]

 

did not specify a date in the format dd/mm/yyyy by which the breach they state must be rectified by else:....xxxxx

 

its not compliant with the correct format with how a DN should be laid out 

regardless to this date issue.

 

invalid Default notice.

[CMH2212]

Thank you for clarifying.

 

Does demanding the full balance effectively terminate the agreement ?

 

They placed the default on Credit File dated 2nd Nov, but with a different figure to that quoted on the DN.

Wary of tipping them off to the Invalid Default notice if they are still entitled to just issue another.

 

My thoughts were that as they have actually registered the Default Notice on file, they can't now issue a proper valid one ?.....

but struggling to understand at what point an agreement is deemed to have been terminated thereby preventing the issuing of another DN.

 

 If you could add any clarity I would be most grateful.

[dx100uk]

ofcourse they can issue another compliant default notice

but anything they have done as a result of the 1st one is void.

 

don't confuse the calendar markers with a default...ignore the calendar totally.

 

the defaulted date is clearly stated in the summary of the debt.

for that to be there a compliant and valid DN must be issued.

 

 

[CMH2212]

So is demanding the full balance (loan still had 9 months to run) considered a breach of the agreement being as they did so without first issuing a valid default notice ?  Credit File clearly states Account defaulted 2/11/19 so i'm guessing they shouldn't have placed that on file either ?

[dx100uk]

it doesn't matter what is stated on the DN in terms of a breach as to why it was issued...., the DN is invalid...…..

 

if they could/couldn't demand the full balance at that time is totally immaterial...its not the reason the DN is invalid.

[CMH2212]

Sorry, I find it all so confusing.

 

What I am trying to clarify is at what point I can treat the agreement as having been breached by the Creditor ? 

I know that they can only issue another DN if the agreement has not been terminated.

 

To my mind, if they demand the full balance (and have not issued a valid default notice prior to doing so) then the agreement has been broken ?

 

I now know why the DN is invalid (thank you)  

what I am trying to establish is at what point would they be UNABLE to issue another DN ?

If they pass debt to DCA ?

Commence Court Proceedings ?

Demand Full Balance though not yet due ? 

 

Do any of their actions to date,

ie Invalid DN,

Demanding full balance,

placing Default on my credit file etc,

constitute termination/breach of agreement,

if not,

what does ? 

 

[dx100uk]

the issuance of a dn is not needed for 99% of what you list above.

 

original creditors don't do court

 

the agreement can't be terminated..the DN was invalid.

[CMH2212]

So, if I don't tell them about the DN being invalid, and they don't rectify it, what action can they take against me ?

[dx100uk]

you say you already have an IRL complaint in with the FOS?

[CMH2212]

Hi, yes I do.

Still waiting on outcome of it.

 

I also complained to the PD loan company regarding the DN but they didn't uphold it, saying they did nothing wrong and followed relevant procedures. 

 

Wondering what action they can take in the mean time (they being the PD loan company) 

[dx100uk]

Not alot bar selling it on i expect

 

 

[CMH2212]

Would that then terminate my agreement with them ?

[dx100uk]

they would have to default you properly 1st.

[CMH2212]

Thank you for all your replies, appreciate it.