The issue of Defaults on credit files is still very much a hot topic, as can be seen from the case of Grace v Blackhorse. The banking world is often too quick and eager to use a Default as a whipping stick to force debtors to pay more than they can afford or to stop debtors raising legitimate disputes.
Many will have been told “If you stop paying you will be defaulted” or words to the effect. However, there may well be circumstances where the consumer is fully entitled to cease payments, and the banks shoulnt use this whipping stick to bring its customers to heel.
However, the banks are now facing a challenge to their authority to do what they please, as under the Data Protection Act 1998 the banks must ensure that they comply with the principles of data protection and schedule 1 principle 4 of the Data Protection Act 1998 makes it clear that data must be accurate and where necessary up to date.
So, if the bank describes you as a defaulter when you aren’t, because there is a legitimate dispute over the debt, or the entry is provably wrong, then it may be possible to challenge the default and get it removed.
We have had some great successes in challenging defaults and securing their removal from credit files, cases like Grace v Blackhorse and Oliver Foster Burnell v Lloyds Bank show this, but these cases are not the only results, far from it in fact.