If your credit file reflects default

[sparklywatcher]

Some of you that are saying you never want credit again - are not clearly seeing the whole picture here, we are not talking credit cards... we are talking gas, electric, mobile phones, sky, broadband, landlines. This is a very serious issue not about getting loans or credit cards.. this will affect things we have taken for granted.... like swapping mobile providers because there is a cheaper deal... swapping utilities for a lower price.. with a trashed credit rating for up to 12 years are you really ready to stay with your current supplier come what may for that long ?

I am seriously concerned about the implications of this as I can see just how much will be affected for 12 years and that is a long long time ... For example if your mobile provider goes bust... which in this climate is possible... you may be unable to get anything other than a pay as you go..

Sorry for the long response.. but I do think this needs clarification as soon as possible. [?]

[kallis3]

What I find hard to believe is that this is the first time it has been mentioned on the forum.

Surely if this common practice we would have been inundated with enquiries about it, and we haven't been.

[LoneRanger]

I personnaly feel people are worrying to much.

[rayb]

Hi Jan,

I think everyone is starting to panic to much here. Please let's wait for some clarification from the powers that be and not worry about it for the time being.

[Max]

You have a good point(s) Sparkly but it looks as if Andy Davie is going to get the matter taken up at a more official level. hope he does then perhaps it will be clarified once and for all J

[Skippy]

I agree with Loneranger and Ray. The original post seems to have started a panic that may not be necessary.

I personally feel that if everyone had this problem with their credit files it would have been all over the forum by now.

[kallis3]

I agree that people are starting to panic unnecessarily. There is no hard evidence that this happens.

I think this thread should be left now.

[LoneRanger]

Completley agree Skippy. We would have heard of this long before now if this was the case.

A new member joining the forum may well worry for no reason.

[kallis3]

My thoughts exactly Steve.

[MelanieGiles]

Jan - this isn't the first time this has been raised on the forum. I remember a flurry of posts last year - perhaps before you became a member - which queried the same thing. At that time Storm was incredibly helpful and put people's mind at rest.

[kallis3]

I don't remember it Mel, so it could have been before I started.

I just think that we shouldn't start panicking posters if there is no need.

I hope Storm can come back on and do the same again.

[Ren]

I'm just looking into an IVA myself though haven't actually taken the plunge as yet and I must be honest this does worry me a little.
The only thing I would say is that with the amount of debt we have and the expendable income we have too, I'm pretty sure that it would take us 12 years to really get sorted it we tried to juggle and pay it offdirectly. Not to mention if we are late with even one payment on any of our accounts we could end up with default notices along the way and that can happen by just forgetting about it which is possible given the amount od creditors we have.
Would be interesting to know that given this information, how much difference is there between an IVA and bankruptcy for someone like myself who doesn't own their own home and has virtually no assets?

[kabby3]

I know I have had some input into his thread but until I actually checked my Credit File I didnt have a clue what if anything would be on there, I was quite scared to look and I really am not interested in gaining anymore credit currently, but in the future it would good when the supplier asks if its OK if we credit check you I dont get in a total tiz! I understand the worry about causing panic but its good to be able to make informed choices and to make a decision ref to IVA/Bankruptcy with good factual information. Maybe its not come up on the forum, because its not been a problem, but just in my case alone Lloyd's have registered a default on my CF in July 2006 my IVA is due to conclude May 2010 (2011 if equity cannot be raised)but due to THERE error my file will not be clear until 2012, I also have 4 other accounts with Lloyd's where they have listed default July 2005 again my IVA was agreeded in May 2005 so the information on the CF is not correct so I know I am going to need help how to sort this error out, to clean up my CF. Its good to know about these things, just like all of you helping me through my IVA together we are so much stronger !!

[admin]

Don't panic everyone.. we will look into this and get it sorted out.
Many of our members have successfully completed IVAs and we've not had anyone reporting any trouble with getting on with the rest of their debt-free life [:)]

[admin]

Storm has come to our rescue with the following statement [:)]

The lender has a duty to accurately report the status of an account - the ICO gave guidance that compelled lenders to default an IVA as near to the acceptance date as practical. Certain lenders do not crystalise the account immediately (it depends on how their funding lines work) but in any case you can ask the lender to report the default accurately.

Certain lenders and DCA's continue to report the status of the account throughout the lifetime of the IVA - each month updating the account in default.

The ICO states that the default will remain on the credit file for 6 years from the date it was originally defaulted and no longer. A defaulted account is removed from your report after 6 years whether or not you have paid the debt in full and even if the lender / DCA continues to update the account at the CRA.

I am however aware of two DCA's who have continued to report defaults beyond the 6 year term - court orders have been obtained to stop the consumers credit report reflecting the default state of the relevant accounts.

Very recent guideance has been issued by the ICO in relation to unenforceable credit agreements:

The Information Commissioner's view is:

"In view of the enactment of section 15 of the 2006 Consumer Credit Act, the ICO has given fresh consideration to the circumstances in which the credit reference agencies should be permitted to record details of unenforceable credit agreements. In doing so we have had particular regard not only to the clear legislative intent that the absence of a signature on a credit agreement should no longer be an absolute bar to enforcement, but also to the following factors;

• The question of whether a legal liability exists in relation to a credit agreement is quite separate from the question of whether such a liability may be enforced by the creditor.
• Where a liability does exist, creditors have a legitimate interest in sharing relevant information about that liability, including information about whether the amount due has been repaid. Such information may properly inform responsible lending decisions, regardless of whether the liability is enforceable.
• Responsible lending decisions are dependent upon lenders receiving accurate information about individuals’ ability (and/or inclination) to repay their debts.

Where a credit agreement clearly existed and credit has been provided to the debtor, but the debtor is not obliged to repay the loan due to the provisions of the Consumer Credit Acts, this does not mean that there was no agreement in the first place. It simply means that there was no enforceable regulated agreement."

Sorry that the latter part of the post is very technical - but hopefully this explains in the detail required that the default will remain on the file from the start of the IVA (or as near as possible) and that even if the lender / DCA continues to report the status of the account during the IVA at 6 years it will be removed at account level so that no further reference is made. If your credit file reflects the default at the end of the 6 years an application can be made to the court if the lender /DCA doesn't cease.

Many thanks Storm [:)]