Defaults ~ Disputes and More

[Kidson]

My daughter took out a loan with a Finance Company to cover a Motor Insurance policy.

 

Initial premium quoted was £361.27 and policy commenced in April '06.

 

Payments were scheduled for Initial 36.10 in April ’06 followed by further 9 monthly at 36.13, concluding Jan’07.

 

April and May payments were made on schedule ~ June was delayed by 18days ~ for which she received a Default Notice ~ June payment made was for £41.13 presumably additional interest.

 

July payment was not made till 3rd August when a sum of £141.13 was paid ~ followed by a further payment of £111.78 on the 9th August, the sum total being £366.27.~ [£5 in excess of the quoted premium] ~ She received another Default Notice.

 

The finance company are attempting to charge “Fees Recharged to Client” of £20 per time x 5 = £100.00 for the late direct debit defaults in June and July respectively.

 

We have refused on the following grounds:-

 

1 My daughter instructed me to act on her behalf and authorized the finance company to speak with me in respect of their agreement. Following discussions between the finance company and myself, I raised a cheque drawn in their favour in the sum of £111.78, which was sent to them on the 7th August in full and final settlement, well before the last due date of Jan'07. The banking and clearance of the cheque is evidence they accepted the offer of settlement. (Hirachand Punamchand v Temple [1911])

 

2. I have argued the charges they have applied represent a penalty for a breach of contract and are thus unenforceable under English Law. To amount to a lawful liquidated damages clause they would have to show that the fee they have taken represents a genuine pre-estimate of their losses (per Lord Dunedin Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC ~ no response other than rambling on about absorbing costs for this and that [including charges imposed by their bankers!!] ~ but no figures to substantiate.

 

3. Under the terms of the Consumer Credit Act 1974 Section 61 relating to the Signing of an Agreement, my daughter never signed the agreement, which the finance company acknowledges.

 

4. Under the Originator’s Guide and Rules of the Direct Debit scheme they failed to comply with the scheme rules on several counts – [very lengthy to list here]

 

Bankfodder has advised that my best interests are served by them taking my daughter to court - not the other way round. Clearly however they don’t wish to proceed down this road because they realise they will loose.

 

However they continue to pester my daughter with letters asking for payment of the balance which they calculate as being £99.63.

 

Their latest letter states unless my daughter pays the next monthly payment which they assert falls due on the 11 November for £36.13 they will issue a further Default Notice and make yet a further charge of £20.00. ~ We have already paid in full well ahead of schedule ~ in fact overpaid by £5!!

 

Now for my questions ~ how do I put a stop to their letter writing? And how do I go about getting the default notices removed and prevent any further defaults notices being issued?

 

I feel it requires a strongly worded response! Help please

[Tinkerbelle]

Write to them setting out your arguments above. Tell them that unless they refund the sums due and remove the default, you will take them to court.

 

Give them 14 days.

[Kidson]

We have already paid the quoted premium plus an additional £5.

 

We have declined to pay “Fees Recharged to Client” of £20 per time x 5 = £100.00 They are seeking a further payment of £99.63 over and above the total we have already paid of £366.27

 

I would be happy if they would take my daughter to court ~ they would have no realistic chance of success for all the reasons I have set out.

 

We need to stop the letters, prevent further defaults and if possible get rid of the two defaults already issued.

[gizmo111]

Are these defaults actually on her credit file?

[Kidson]

Are these defaults actually on her credit file?

 

Yes they are

[gizmo111]

Wel lfor a start a default can only be registered once for one debt. I would write them a strong letter with a kind of chronology and not just to their customer services get the name of some one higher up - copy in the data controller as well and take it from there. Use Surly's template as well.

[Kidson]

Wel lfor a start a default can only be registered once for one debt. I would write them a strong letter with a kind of chronology and not just to their customer services get the name of some one higher up - copy in the data controller as well and take it from there. Use Surly's template as well.

If one defaults on the same debt twice - or for that matter three times - they can't raise two or three default notices?

 

I am in correspondence with their Deputy Head of Lending ~ OK not the highest ~ but in a relatively high position.

 

Since no agreement was signed ~ under the Data Protection Act they do not have my daughters permission to pass on any personal data ~ default notices to any credit agencies ~ can anyone confirm that as fact please?

[Tinkerbelle]

Would they be covered by the Distance Selling Regulations though?

[gizmo111]

It would be the same principle as the phone companies and utilities I would have thought where acceptance of the product implies you take their T&C

[gizmo111]

And if a debt is defaulted then surely it is terminated so you can't default on it again. if you comply with the default notice thne it is not valid. One debt = one default.

[Tinkerbelle]

Quite.... Have a good read of this document

 

http://www.experian.co.uk/downloads/compliance/dataprotection_guidanceondefaults.pdf

 

It does not refer to the 1998 act, but a lot of the principles still apply, and gives you an idea where the ICO are coming from.

[Kidson]

Are these defaults actually on her credit file?

Having rechecked and contrary to my earlier statement ~ no the defaults are not on her Credit File. I take it therefore the Default notices they have raised are for their own internal process and to inform my daughter of the default and thereby raise revenue by charging her another £20 each time they issue a default notice?

 

As no agreement was actually signed with the Finance Company I take it they do not have her permission to pass any personal data on the the Credit Agencies and would be in breach of the Data Protection Act if they did?

[Tinkerbelle]

Not necessarily, if they read T&C to her over the phone they could well use that as consent.

[onlymepault]

I though that you had to be late paying 3 times before they could place default

[Kidson]

Tinkerbelle ~ no T&C's read over the phone and in any event the finance company has already acknowledged there is no signed agreement and under the terms of the CCA 1974 section 61 [a] applies.

[Tinkerbelle]

I though that you had to be late paying 3 times before they could place default

 

That's what the guidelines say, but as we all know these organsiations are a law unto themsleves

[Tinkerbelle]

Tinkerbelle ~ no T&C's read over the phone and in any event the finance company has already acknowledged there is no signed agreement and under the terms of the CCA 1974 section 61 [a] applies.

 

Well clearly if there is no signed agreement, and no consent given and they have admitted this, then they should not be processing.

[Kidson]

That's what the guidelines say, but as we all know these organsiations are a law unto themsleves

 

Could you please direct me to that particular guide line which requires one has to be late three times before they issue a default ~ many thanks

[Tinkerbelle]

Read Post #11 above

[Kidson]

Well clearly if there is no signed agreement, and no consent given and they have admitted this, then they should not be processing.

In addition as I understand matters to be, if the account is in dispute by the finance company ~ not by my daughter as she and I believe it is concluded ~ they are not allowed to add additional charges and issue further defaults are they?

[Kidson]

Read Post #11 above

 

Thanks very much had a read many times last night ~ obviously missed the 3 times ~ will read again and try to find.

 

Thanks very much for that info which most useful.

[Tinkerbelle]

In addition as I understand matters to be, if the account is in dispute by the finance company ~ not by my daughter as she and I believe it is concluded ~ they are not allowed to add additional charges and issue further defaults are they?

 

No they are not

[Tinkerbelle]

Thanks very much had a read many times last night ~ obviously missed the 3 times ~ will read again and try to find.

 

Thanks very much for that info which most useful.

 

Section 11.

[Kidson]

Thanks yet again Tinkerbelle

[Kidson]

Originally Posted by Kidson

 

"In addition as I understand matters to be, if the account is in dispute by the finance company ~ not by my daughter as she and I believe it is concluded ~ they are not allowed to add additional charges and issue further defaults are they?"

Originally Posted by Tinkerbelle

"No they are not"

 

Can you please direct me to the relevant legislation as in spite of my last letter in which I wrote:

 

"I do not acknowledge any balance due to you. The debt has been paid and discharged in full. This matter as previously advised is analagous to Hirachand et al and your presentation of payment by my father amounted to your acceptance in full and final settlement. I have no additional obligation to you. I owe nothing more and any further demands for payment will be treated as harassment.

 

Default notices to which you attribute a punitive and disproportionate £20 penalty charge are unlawful and legally irrecoverable at common law and are not intended to represent or relate to any alleged actual loss, but is a means to duly enrich your company with a view to excess profit. Your continued persistence to act in such a manner is your prerogative and not my concern."

 

They have sent my daughter a further Default Notice yesterday under Section 87(1) of the Consumer Credit act and debited her with a further administration fee of £20.00.

 

They are threatening in event of non payment that her motor insurance may be at risk.

 

Does my daughter just ignore all of this and wait for them to sue her ~ and then defend when and if she has to go to court?

 

Can we get them to withdraw the default notice issued yesterday and stop subsequent default notices being issued each with an additional administration charge of £20.00?

 

Can my daughter sue them for anything in order to put a stop to this whole debacle?

 

Advice and suggestions most welcome please