Using bank charges to remove default.

[bwelsher]

Hi all,

I had an account with First Direct about 3 years ago in which I went over my overdraft limit and recieved several letters from the bank threatening to close my account, report me to CRAs etc... Being an irresponsible student I moved house and forget all about it until last year when a debt recovery agency managed to get in touch with me and I subsequently paid off the debt. First Direct, I've recently discovered, did put a default against my account which has made it impossible to get any form of credit since. As First Direct had levied excessive charges against the account for going over my limit could I use this as the basis for getting the default removed? I'm not concerned about getting back any money just about clearing my credit record.

 

Any advice appreciated!

[Jimbo44]

Just a thought, but one way of 'killing two birds' is to claim back your charges and make the removal of the Default a condition of your acceptance of their offer.

 

Have a good look around this site and you'll see numerous threads concerning the removal of these Defaults to help you along. Among these is an extremely good one from SurlyBonds.

[bwelsher]

Cheers mate, I will have a dig around for those threads.

[Glenn UK]

If you want to use the unlawful charges route for the removal of your default then it needs to be reasonably clear that it was the charges alone that resulted in the default.

 

Then it needs to be part of your claim, ideally from the start and must be entered on your claim form when you submit the claim to court. Edit this precludes you from using MCOL which mho is no bad thing anyway since this is only for moeny claims

 

I would suggest that in this case you actually want to force the claim to court because the banks are resisting claims for the removal of defaults very strongly in most cases.

 

I would recommend that you refuse any partial offers of settlement because this weakens you should your claim come to court IMHO.

 

For example if you accept the repayment of the money part of the claim when it gets to court the only thing to discuss is the default.

 

One site member has already fallen foul of this issue and in his case the judge wouldn't allow arguments about the lawfulness of the charges. Whilst we might disagree with that judges view it may happen to you.

 

So if you don't accept anything then the bank has to go to court on all issues not just the ones they choose. The risk to them if the claim is well prepared is far higher than just going on the removal of a default.

 

JMHO

 

Glenn

[bwelsher]

So I would claim that the excessive charges for exceeding my overdraft left me unable to bring the account back within it's limit which resulted in the default?

[Glenn UK]

IMHO it needs to be very obvious say for example that you were defaulted for £500 but the charges applied to your account amounted to £500 or more,some if which you had paid, then it would be clear cut and more likley to succeed.

 

if on the other hand you were defaulted for £500 but the charges applied were only £100 of that balance then imho you have no chance.

 

What you have to do is try to think of an argument that would convince the court that the default was only due to the impostion of unlawful charges, if there is any doubt in the mind of somoene else who isnt involved then how do you thik the courts would react?

 

HTH

 

Glenn

[bwelsher]

I was defaulted for £575 ish and the £75 was from charges so based on what you are saying I wouldn't have a case

Otoh the overdraft was interest free so wouldn't have required me to pay any of it back (at least in the short term) but the application of excessive charges to the account required immediate payment into the account of money which perhaps I could argue I didn't have?