My thoughts:

Shop Direct is not required to be able to demonstrate that a customer has provided explicit agreement to its data protection policy in relation to recording information with credit referencing agencies. The act of purchasing goods on credit, which you have done, in itself sufficient for Shop Direct to be legally bound to provide information on how an account is managed. Shop Direct is, however, required to provide its customers with written copies of its data protection procedures.

How do you determine how an account is ‘managed’ if there is no agreement as to payment amounts and dates? If you check SDFCs data protection policy it states they only share data with CRAs after you “have entered a credit agreement”.

Even where a firm may fail to provide a customer with a copy of its data protection policy, or be able to produce a copy of the signed credit agreement, this would not in itself prevent that firm from being legally required to relay information on how a customer managed an account to credit reference agencies. This is because other credit providers are entitled to see information in order to be able to assess the risk of lending to an individual.

See above re: ‘managed’.

Likewise, whether a contract is enforceable or not does not negate the legal requirement to record accurate information with credit referencing agencies where a credit based relationship exists. Shop Direct is required to record information in relation to the management of any credit based accounts it operates. Although Shop Direct has not yet produced a copy of your signed consumer credit agreement, I am satisfied it has provided documentation that demonstrates that a credit based relationship exists between you an it.

Again where no agreement exists as to repayments, how can the information be regarded as ‘accurate’.

I am also satisfied that Shop Direct has provided documentation that demonstrates that a credit based relationship exists between you and it and that the details shared with credit referencing agencies are in accordance with Shop Direct’s obligations and as outlined in its data protection policy contained within documentation issued to you. As you do not appear to have maintained minimum payments required in accordance with your contractual obligations, Shop Direct is required to report this to credit referencing agencies.

Point is, with no agreement, there are no ‘contractual obligations’.

Shop Direct notes that when you applied for the account, you provided information to it for the purpose of opening a credit account, and purchasing goods via this account. In doing so, you signified your consent to Shop Direct processing your information. This is also explained in the data protection policy pages at the back of Shop Direct’s catalogue. The data protection policy pages clarify that information regarding the performance of an account will be exchanged with the CRAs on a regular basis.

Wrong, if your case is similar to mine, you never did apply for the account, or more specifically a ‘credit account’. The policy only applies where a credit agreement is entered into.

Once it has satisfied itself that the debtor has been correctly identified and that the amount owing is also correct, a firm is not prevented from taking normal administrative actions such as debiting the account with payments authorised by the debtor, charging interest on the outstanding balance, seeking repayment of a debt from a borrower or registering information, such as a default, with a credit referencing agency. A firm would also be permitted to refer a debt to a third party, such as a debt collection agency or a solicitors firm.

How do identify the amount owing is correct. There is no contract specifying either interest, charges or repayment.

Conclusion:

I am satisfied that a credit based relationship exists between you and Shop Direct. Documentation indicates that the account defaulted and as such this information is legally required to be provided to credit referencing agencies.

I would expect a default notice to usually refer to contractual obligations such as repayment schedules. No agreement = no contractual repayment schedule, i.e. default is invalid as it refers to non-existent terms.

I have had this argument with the ICO but I feel much better now I have stopped banging my head against a brick wall!!!

I received a letter from the Financial Ombudsman. It doesn't make favourable reading, but please advise what I should do or how I should respond:

The Financial Ombudsman Service is required by the Financial Services and Markets Act to determine complaints by reference to what we consider to be fair and reasonable. We generally take the view that where a person has taken out credit and received the benefit of it, they are liable to repay the debt, including contractual interest. You do not dispute the debt is yours as you have told us within your complaint form that you did make the purchases.

As payments were not maintained in accordance with the minimum payments requested on your account statements, the account followed Shop Direct’s normal debt recovery process, which includes the application of administration charges.

Shop Direct is not required to be able to demonstrate that a customer has provided explicit agreement to its data protection policy in relation to recording information with credit referencing agencies. The act of purchasing goods on credit, which you have done, in itself sufficient for Shop Direct to be legally bound to provide information on how an account is managed. Shop Direct is, however, required to provide its customers with written copies of its data protection procedures.

Even where a firm may fail to provide a customer with a copy of its data protection policy, or be able to produce a copy of the signed credit agreement, this would not in itself prevent that firm from being legally required to relay information on how a customer managed an account to credit reference agencies. This is because other credit providers are entitled to see information in order to be able to assess the risk of lending to an individual.

Likewise, whether a contract is enforceable or not does not negate the legal requirement to record accurate information with credit referencing agencies where a credit based relationship exists. Shop Direct is required to record information in relation to the management of any credit based accounts it operates. Although Shop Direct has not yet produced a copy of your signed consumer credit agreement, I am satisfied it has provided documentation that demonstrates that a credit based relationship exists between you an it.

I am also satisfied that Shop Direct has provided documentation that demonstrates that a credit based relationship exists between you and it and that the details shared with credit referencing agencies are in accordance with Shop Direct’s obligations and as outlined in its data protection policy contained within documentation issued to you. As you do not appear to have maintained minimum payments required in accordance with your contractual obligations, Shop Direct is required to report this to credit referencing agencies.

Shop Direct notes that when you applied for the account, you provided information to it for the purpose of opening a credit account, and purchasing goods via this account. In doing so, you signified your consent to Shop Direct processing your information. This is also explained in the data protection policy pages at the back of Shop Direct’s catalogue. The data protection policy pages clarify that information regarding the performance of an account will be exchanged with the CRAs on a regular basis.

I note that you have used the phrase ‘in dispute’ and that you appear to believe that this means that collection activities should be ceased until such a time that you consider the debt to have been established to your satisfaction, however, this is not the process that a debt considered ‘in dispute’ is required to comply with. When a debt is disputed by a perceived debtor, there is onus on the firm pursuing repayment of the debt to satisfy itself that the correct individual is being pursued for repayment of that debt. Once a firm is satisfied that it is correct, the account is no longer considered to be ‘in dispute’ simply because a pursued debtor maintains that it is.

Once it has satisfied itself that the debtor has been correctly identified and that the amount owing is also correct, a firm is not prevented from taking normal administrative actions such as debiting the account with payments authorised by the debtor, charging interest on the outstanding balance, seeking repayment of a debt from a borrower or registering information, such as a default, with a credit referencing agency. A firm would also be permitted to refer a debt to a third party, such as a debt collection agency or a solicitors firm.

With regards to whether or not a consumer credit agreement is enforceable, the Financial Ombudsman Service does not make recommendations in respect of this. This is because enforceability of a consumer credit agreement are best dealt with by a court of law.

Conclusion:

I am satisfied that a credit based relationship exists between you and Shop Direct. Documentation indicates that the account defaulted and as such this information is legally required to be provided to credit referencing agencies.

Mr_Jailer & Basa

Since my last post, i received yesterday from Shop Direct Finance (LIttlewoods) with a heading Empire Stores:-

As a reponsible retailer we are guided by legislation to ensure you are kept fully informed of the status of your credit agreement with us. Below you will find details of all relevant transactions that have taken place on this credit agreement in the statement period. We will provide you with a statement on each anniversary until the agreement is completed. These letters are for information only and require no action from you.

There are four credits listed, not from me i might add.

Then underneath there is;-

How interest is calculated

Paying less than the agreed sum

Settling your your Credit Agreement Early.

Then on the back it says:-

Dispute Resolution

If you have a problem with your agreement, please try to resolve it with us in the first instance. If you are not happy with the way in which we handled your complaint or the result, you may be able to complain to the Financial Ombudsman Services. If you do not take up your problem with us first you will not be entitled to complain to the Ombudsman. We can provide details of how to contact the Ombudsman.

So, what do you make of all this, when the first paragraph says 'Requires no action from you'.

Does it mean i will get a yearly statement on the (what they call) anniversary.

As for my credit file, i don't personally care. I don't intend to ask for credit or cards in the future from anyone.

Jenlo: I got another Late Payment marker on my credit file for September and a statement asking for payment from 'Very' - the new company name.

I've reported this to the FOS last week with all the proofs of exchanges in letters etc and am awaiting some feedback.

Basso: Unfortunatley having late payment markers on the credit file in today's climate is as bad as having a default.

Jenlo:

.................. but i don't know how to stop NDR continuing sending the monthly statements.

Why bother, thay are simply wasting money on postage. There is not a thing they can do.

Have you checked your credit file. In my experience there will be a few late payments and then no information.

I am in heated argument with ICO at the moment trying to convince them that with no agreement whatsoever there is no righ to process data and such datat is inaccurate, unwarranted and unlawful.

Mr_Jailer

In August i also had the same letter from Littlewoods, but i still have NDR sending me statements and demanding payment.

"With reference to your letter dated xxx i can confirm that we will not be pursuing the above account for the outstanding balance of £xxx .
As this debt remians unsatisfied this will be noted on our internal file for future ref.
This information will also form part of your records at the credit ref agencies for 6 years."

I know for a fact i have never signed an agreement with Littlewoods.

They bought out Empire Stores which were a fantastic company.

I lost my job contacted Littlewoods via CCCS and offered them a lower monthly payment, they didn't want to know.

I was only in arrears for £123, they constantly kept hassleing me, so i thought i would go down the route of asking for a CCA. I knew they didn't have one, but neither did Empire as i had been with them over 20 years and applied via a magazine advert.

Hence the reply from Littlewoods, but i don't know how to stop NDR continuing sending the monthly statements.

I got email from Experian today saying:

"Further to our recent correspondence, we have been contacted by Shop Direct who state they will contact you direct to discuss the query raised by yourself.

Unfortunately, Experian is unable to amend this information without the authorisation of the company in question."

I wander what they will say...

Looks like I'll have to report Shop Direct to the FOS.

The quote you refer to is guidance, unfortunately not rules and definitely not law. Whilst I appreciate the spirit of the guidance it is all too often stretched if not ignored.

It is their petty way of 'getting their own back'.

Bassa,

Note the Challenge to CRA's as per Information Commissioners Default Guidance - Version 3:

"Credit reference agencies potentially have a defence against action through the courts by individuals who successfully challenge the accuracy of data received from a lender. However, this defence is only available if the agency takes reasonable steps to make sure the data is accurate and, as soon as they become aware of the challenge, takes steps to mark the file accordingly. Records where the accuracy is challenged can be marked as ‘under query’. This marker alone is unlikely to be sufficient to provide protection against claims, including those for compensation.

Agencies should therefore ask the lender to substantiate the disputed information within a reasonable time frame, for example, 28 days, and, if the lender is unable to substantiate the disputed information in that time, should suppress the information from the file."

I have challenged Experian to ask whether the information I have presented is correct - re: No Valid CCA, acknowledge they breached the Data Protection Act 1998 by sharing my information without my permission and confirm to the CRA they are no longer chasing the debt.

If the creditor does not reply within 28 days, the CRA's will automatically remove the disputed data entered in my Credit file - or so I've read.

SW, it does make for an interesting read. Littlewoods Direct was naughty. I was never in debt, always kept up payment, til LD caused me to go into debt through their errors and what I believe is breaches in their own terms and conditions. I have presented the evidence to the FOS as LD weren't interested in arriving at just solution.

While waiting for the FOS to come to a decision, i researched and found the CCA Act 1974 route which certainly has got the ball rolling. I still intend to notify the FOS regards CCA business - just waiting for the CRA to get a response from Creditor.

"I requested a CCA from Littlewoods Direct after I got into debt due to mistakes on their part."

It seems he didn't read the entire post before ranting, as per usual.

There is a couple of problems here Skywalker.

The OP did say he got into debt because of mistakes by the lender – take that for what you may, but the fact remains that many credit companies, for reasons best known to themselves, have declined to follow the lead of the government and not only failed to reduce interest rates but actually increased them and not by small amounts.

This has a dual effect of not only making it more difficult for people to meet or reduce their indebtedness but also removes cash from the market place for people to spend and boost the economy.

Again the banks are looking purely inward to refill their own coffers and to make amends for their own greed and irresponsible actions of the past. We and our children are going to be paying for their greed for years to come.

For decades the government and business through the media machine have pushed people to spend, spend (and are still pushing) with promises of no more boom and bust. Now they are surprised when a minority whose circumstance has changed (probably down to government or banks actions) are unable to meet their commitments and for shame are looking to play the banks own games.

We believed them but they lied and are still lying. In their efforts to throw money at us they failed to ensure they had proper contracts in place. Do you think for one nano second the banks wouldn’t use every trick in the book to weasel out of a poorly drafted contract or dump a CCJ on anyone or repossess someone’s home without losing a seconds sleep?

"The urgency for me is that I was declined a mortgage due to the late payment markers. I think the banks decline mortgages if there is one late payment marker on the file within the last 6 months. At least as a first time home buyer, this delay has given me a bit more time to save for a deposit."

I am fascinated by this. You ran up a debt, you then decided that you could get out of this debt by using a loophole, and now you are frustrated because (understandably) this debt is now on record - despite the fact that Littlewoods cannot legally enforce collection.

The mortgage company can see that you have a history.

Experian's reply is exactly what I would have expected. They are in bed with the CCCs and record whatever they say - for right or wrong.

It will be very difficult to get them to remove the markers as the CCCs say they are accurate (and in a way there are). The only way I know to get them removed is either through the courts or the ICO and even getting the ICO to concur is an uphill struggle as they seem inclined the same way as the CRAs. I am awaiting a reply from them right now, but don't expect anything for a while.

Hi Bassa,

Experian had contacted Shop Direct around May before Shop Direct breached s.78(6) CCA 1974 (when they could not produce a valid CCA upon request), and there reply was that the information was correct.

Since then, I have contacted Experian again advising them that they are holding 'non-credit compliant' information on my credit file. At first Experian did not want to ask them again and said:

"Please note, that if a company cannot provide you with any actual evidence of your initial consent, this does not necessarily mean that they have to remove the data from your credit report.

For example, if a company can demonstrate that an account was being paid on time for a number of months/years prior to falling into arrears, this is often seen as evidence that the individual concerned must have consented to the terms and conditions of the contract.

Furthermore, a company will only open an account if the applicant agrees to their terms and conditions so, unless the account was opened fraudulently, the account holder must have agreed to the standard terms and conditions for that type of account.

Therefore, as long as the company terms and conditions specify that they reserve the right to pass account information to a credit reference agency, a period of meeting contractual obligations, or simply opening the account, will often be deemed as evidence of consent to those terms and conditions.

I would recommend that you either approach the company directly or lodge a formal complaint with a recognised regulatory body should you wish to take this matter further."

I advised them that the creditor requires my permission to share data which is given through written consent via a valid CCA in accordance with the Data Protection Act 1998.

They agreed to contact Shop Direct again, in light of this new development.

Previously, Experian got a response from Shop Direct that the information is correct within a couple of days, but with this request so far has been 6 days and still waiting.

If the creditor does not reply within 28 days, the file would need to be removed from my Credit File.

Creditors, have a history of selling on debt for a few pennies in the pound. While Shop Direct may no longer chase me for the debt, they may sell it on, and I have read reports that people have been surprised a few years down the road that DCA's have been chasing up for the original debt.

I want to ensure this does not happen with me.

I have also complained to the FOS regards the conduct of Littlewoods Direct, but the FOS is really busy and may take a few months. I also need to update them that Shop Direct do not have a valid CCA and they had been marking my credit file.

The urgency for me is that I was declined a mortgage due to the late payment markers. I think the banks decline mortgages if there is one late payment marker on the file within the last 6 months. At least as a first time home buyer, this delay has given me a bit more time to save for a deposit.

I've got the same experience with Littlewoods !

Basically you are under an illusion that there is no debt just because Littlewoods are not legally capable of pursuing it. You have received goods under the account, it is just now they cannot force you to pay for them.

Now, with that out of the way, lets look at the credit reference agencies thing. I'm not sure why you think the late payment markers will be removed by Experian just because Shop Direct cannot enforce? Oh, and what's the 28 days thing??

In my case I have written to the ICO to ask them to remove the markers (and in my case a DN). My argument is if they have no signed agreement there is no permission to process any data nor is there an agreement of when and how much to pay so how can I be late or in default - of what??

The only other way is to argue to the courts that SDFC are in breach of s.78(6) CCA 1974.

Personally until the default appears on my files I'll not be bothering with the courts. I also want to see what the ICO say (they referred my case to their Specialist Casework & Advice teams - sounds posh!).

I'm not at all sure as to what the 2 months or 7 years refers??