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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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I am trying to obtain a new mortgage but I have a default registered

Customer Question

I am trying to obtain a new mortgage but I have a default registered on my credit report.
I have been advised that in the current 'climate' this would be impossible.

The reason for the default was...

I had an account that I was no longer going to need, so I cleared the account and cancelled all direct debits. However, a direct debit was requested which incurred a charge, which in turn accumulated to £325 of charges.

Stupidly, I didn't bother opening any further letters from the bank as I assumed they were just statements showing my zero balance.

When I finally realised, I disputed the charges but the account went into default.
I have since paid the full amount to just resolve the matter.

My question is... are there any grounds for getting this default removed from my credit file in light of the outcome of the whole 'bank charges legaliity' cases. Or, is there any lender that will offer a mortgage while the default remains on my file??

Thanks.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
Alex Watts : Have you placed a notice of correction on your report? Do you accept the account did in face default?
JACUSTOMER-11ujtc3p- :

Hi, I have not placed a notice of correction. It has been marked as 'satisfied'.

Alex Watts : Do you accept the account went into default.
JACUSTOMER-11ujtc3p- :

I don't really accept the default because: 1. I had no overdraft on the account and they created the overdraft purely to add the charge, then defaulted it. And 2, I was in the process of disputing the bank charges at that time.

Alex Watts : If you paid the amount then that must mean the charges are correct? I assume the bank didn't refund them?
JACUSTOMER-11ujtc3p- :

I paid it purely to get the matter resolved as I thought the longer it was on my record the worse it would be. I always felt the charges were unfair and excessive. The entire amount of £325 was purely bank charges.

Alex Watts : You need to write and ask that the default be removed within 14 days or say you will go to court.
Alex Watts : If they refuse then you can make an application to the court under section 14 of the Data Protection Act in that an application the court can order they block, rectify or destroy wrong information.
Alex Watts : You would need to complete form N208 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n208-eng.pdf and take it to your local county county.
Alex Watts : Court.
Alex Watts : The court would then issue a claim and the bank would be given a limited opportunity to defend it, if not then they can be be added giving evdience.
Alex Watts : If the matter is defended then the court will list the matter for a hearing and decide whether or not to make an order that they remove or change the default.
Alex Watts : http://www.legislation.gov.uk/ukpga/1998/29/section/14
Alex Watts : This is what you can do to get the default removed, but if it turns out the default was correct then your applicTion would fail.
Alex Watts : Can I clarify anything for you about your question today? If not, can I invite you to rate my service which I hope has been excellent. If you need more help then please click reply. Thanks - Alex
JACUSTOMER-11ujtc3p- :

If they do not offer a defence will it automatically go in my favour?? If they did defend it, and I lost would I be liable for their costs?

Alex Watts : Yes and yes.
Alex Watts : It would not be a small claim as it is a part 8 claim.
JACUSTOMER-11ujtc3p- :

So their court costs could be very high? ie. 1000's rather than 100's of pound?

Alex Watts : If defended £5000 max
JACUSTOMER-11ujtc3p- :

Are they likely to defend? And can they offer a defence in writing?

JACUSTOMER-11ujtc3p- :

To elaborate further... the bank actually removed the default as they passed it to a debt collection agency. The agency refuse to remove it as they have been instructed by the bank that it is a fair reflection of the account. So, do I need to be taking the bank to court or the collection agency?

Alex Watts : I can't say whether or not they would, it is a matter for them. Their defence would be filed after you issue a claim but before any hearing
Alex Watts : Does that answer your question?
JACUSTOMER-11ujtc3p- :

To elaborate further... the bank actually removed the default as they passed it to a debt collection agency. The agency refuse to remove it as they have been instructed by the bank that it is a fair reflection of the account. So, do I need to be taking the bank to court or the collection agency?

Alex Watts : Whoever name is XXXXX XXXXX the default.
JACUSTOMER-11ujtc3p- :

The debt collection agency is the one showing the default but I never defaulted anything with them. They just copied what the bank had placed on there. I wrote to them to get it removed and they informed me they were only leaving it there because the bank told them to. I also wrote to the bank and they said they will not instruct the agency to remove it. So, whilst the default is showing under the 'Lowell' name, the bank seem to be the ones in control of whether it stays or not. So is it still 'Lowell' I should be taking to court?

Alex Watts : If Lowell have registered the default then yes it is them. Whoever is named on the credit report is the one.
Alex Watts :

If I could invite you to rate my service before you leave today, hopefully it has been excellent. If you do need more help or information please click reply. Thanks – Alex

Alex Watts : You have rated bad service despite having a long conversation, giving you the legal answer and even what papers to fill out.
Alex Watts : What else do you want to know? I want to make sure this is a good rating.
Alex Watts : Are you able to respond?

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