L&G Home Ins - Accidently Can'd DD - default notice after ONE missed Payment

[andrew1]

Just a quick question on something I should, but don't off the top of my head know...

 

I cancelled a few Direct debits from my account I no longer use and inadvertantly cancelled the home insurance policy.

 

1 payment only affected and I received a section 87(1) default notice...

.. because I was in breach of the terms of the credit agreement as I failed to maintain the DD Instruction

- is this for real?

 

Don't they have to wait for at least 2 payments before a Default Notice is issued.

..I didn't even know I'd done it, no letter nothing (or, there was a letter in the same envelope stating:

 

"It's a requirement of the Consumer Credit Act that we issue you with this formal letter because you've missed your DD payment"

 

Its a running account Credit Agreement they tell me.

 

Should these 2 documents, the official notice AND the Default Notice be in the same envelope after only 1 missed payment?

- I'll pay it as it's a pittance, but.....

 

Thanks

 

A1

[dx100uk]

who is it

not premium credit is it?

 

 

dx

[andrew1]

Legal & General....

[andrew1]

Is there a prescribed term for the time a creditor waits before sending out a DN anyone or is it okay to send it out the very day of the very first and only late payment?

 

Been reading around and it seems normal advice that creditors would not send out a DN until minimum 2 payments and as many as 6 late payments....I got mine 2 dated the same day as the DD was not paid, but received 2 days later..thoughts anyone?

 

A1

[SabreSheep]

I thought a default notice had to give you a time frame to rectify the error, maybe Im wrong

[Peterbard]

is considered best practice to not send the section 87 notice until after the section 86 notice, which is due after two missed payments, however it is not requirement, seems like a bit of overkill as the amount to remedy would only be one payment and the remedy date would probably take you into the next payment period.

 

Yes the Dn should contain the OFT information notice(86(a)), this should be contained together with both an 86 and 87 notice.

[dx100uk]

it appears that several insurance companies

or their financiers like Premium credit

 

 

are carrying out this practice of immediately issuing a default notice.

 

 

though the premium credit DN's mention nothing about registering a default on CRA files

nor

even mentioning CRA files.

 

 

appears there has their been a general 'change' in how they operate?

 

 

not seen this practice before.

[theoldrouge]

in addition, many insurers now insist that you give permission to soft search CRA,s

 

in orderto obtain motor ins at all

[caro]

in addition, many insurers now insist that you give permission to soft search CRA,s

 

in orderto obtain motor ins at all

 

Correct. Even if paying in full!!

 

I've a feeling Swinton sent me a DN as soon as I missed a payment too, although they're underwritten by L&G.

[andrew1]

Well it's a sharp practice as far as I can see and is likely to send people's CRA files into a spin if they are not too familiar with this.

 

 

The remedy is there, but lest we not forget, it is a 'condition' of the uptake of the policy to pay by direct debit, not a choice,

in other words "it's up to us when we get payment, not you the consumer" -

 

 

I can understand the desire to run their systems by Direct Debits and it makes the whole collection cycle easier and cleaner

- having run a business for 30 yrs I can see the benefits, but I wouldn't have lasted 5 minutes

if I told clients the only way we'll do business is if we control your Purchase Legder, not you!

 

I might fly off a note to the FCA anyway as it seems somewhat unfair and a sharp practice.

CRA's are bad enough, but knowing what damage they can do and how hard it is to get anything changed their end,

this kind of practice needs nipping in the bud.

 

Caro, they did give a time frame, they have given until the 30th December which,

when the DN was issued on the 10th and received on the 12th is within the 14 days.

 

 

I'll pay it on Monday (tomorrow) as there's no cash flow issue,

just a mistake in taking off one too many old Direct debits on my internet banking bank account,

but it just P'd me off having not even known I'd made the mistake until this turned up 2 days after it was due to go out.

 

All your thoughts above greatly appreciated, thanks folks.

 

A1

[Peterbard]

Yes just to help with your complaint.

A section 87 notice is an information notice, in other words it informs the debtor that the account is in default and gives him the opportunity to remedy.

 

So this means that the account was in default when the notice was sent(according to Goode), the ICO guidelines/information states that an account is considered in default when the relationship between the parties has irretrievably broken down, can this be after one missed payment ?

 

Usually the breakdown of a contract comes after a repudiatory breach, one missed payment would be considered to be a contractual breach in contract law and not a repudiatory breach of contract and not cause for termination.

 

The ICO guidance, (now instruction since earlier this year) states that there must be a 30 day warning before a default is recorded on the file, this is a separate requirement to the section 87 request although it is often contained on the same advice letter,

[dx100uk]

this is what they send

[andrew1]

Thanks for the comments and this letter dx, I'll try and blank out mine and post it up so people can see it tomorrow.....bit late tonight for techi stuff!

 

Nite folks

A1