What are the new rules for default notices?

The Government has announced that new rules have been proposed by the Treasury for Default Notices required under section 87 Consumer Credit Act 1974 (CCA).

When do you get a default notice on a credit card?

If you can’t pay the missed payments in this time your account will default. A default notice is normally sent when you’ve missed, or paid less than the full amount for 3 to 6 months. Default notices only apply to debts which are regulated by the Consumer Credit Act, such as credit and store cards, payday loans, personal loans and hire purchase.

What are the provisions of the Consumer Credit Act?

89 Compliance with default notice. If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88 (1) (b) or (c) the breach shall be treated as not having occurred. The Whole Act you have selected contains over 200 provisions and might take some time to download.

Can a debt collector pursue a default notice?

Can debt collectors pursue a default? Once a default notice has been issued, the debt can be passed or sold to a debt collector. You may then start receiving letters and phone calls from the debt collector to chase up on the debt, and payments would need to be made to the debt collector rather than the original creditor.

When do you get a default notice from a creditor?

A default notice ( sometimes referred to as a default letter or Notice of Default) is a formal letter sent to you by a creditor as a result of payments missed on a credit agreement between yourself and a credit provider.

What are the new default judgment rules for consumer credit?

The new default judgment rules apply to consumer credit transactions involving revolving or open-end credit extended by a financial institution to an individual primarily for personal, family or household purposes, with terms that include periodic payment provisions, late charges and interest accrual.

When does an organisation get a default notice?

The decision to default an account lies solely with the organisation the account is with. A default notice can only be issued if the debt is regulated by the Consumer Credit Act 1974.

Can a default notice be served on a previous address?

‘Default notice served under section 87(1) Consumer Credit Act 1974’. There is no requirement for the creditor to prove you have received the notice, so it is possible that you may have received the notice to a previous address. You could also obtain a credit report to check to see if you have received one.