In March 2014 my credit score was 602 and the age of the credit file 16years. Just one month later April 2014 I had one default listed by a bank for $800.00 not in dispute. The score had fallen to 333 and the age of the credit file is now suddenly 19years. No other entries had been added or removed but the report layout had changed.
Today I now have three defaults listed. The last default was listed by a debt collection company for $6,000.00 a check of the score before and after showed a loss of only around 40 points.
Yes I do have several entries in short space of time which may have impacted the score more than normal.
Regarding paper work. A disputes tribunal referee can make an order against someone without any written contract having been in place between a consumer and a bank. A banking relationship is regarded as being contractual in nature. In my case because there were no terms and conditions that I had signed with the bank, I said yes to the question of do I have a credit card with the bank and I also agreed to an amount with the bank to pay. My verbal agreement was all that was required for me to end up with an order against me and with two weeks to pay the amount in full. It also meant that the Referee could dismiss entirely my counterclaim and a new “contract” was formed with the bank.
The standard terms and conditions that the bank issues from time to time do state that as soon as you use the card, you are deemed to have accepted their terms and conditions.
The important parts of a contract or terms and conditions, are the parts that state what happens to the outstanding debt when it is in default and who pays the cost of collecting the debt. How is it treated, for instance - do the banks just ask an agent to collect it on their behalf or do they actually onsell it. Those two things are very different legally and can have tremendous consequences to the outcome of a dispute.
Also look for clauses that state whether the bank or creditor can charge interest and collection costs and how much they are. My research has shown that debt collectors will add substantial costs to an existing debt that they would not be legally entitled to claim.
Unfortunately the collection industry is not regulated by government. There is no entry for anyone even becoming a debt collector. This is one reason why I believe people are being taken advantage of. There are no standards or rules that debt collectors need to abide by. There are loopholes with our laws that I believe are being exploited. The outcome of course is more debt against the consumer to pay.
An interesting side note, I was speaking to a bank and they were of the opinion that the reporting guidelines as outlined in the Anti Money Laundering Act Section 49(3) don’t actually apply to outstanding debt. I queried this with the banking association and they had no opinion on it.
Whatever documentation you get from the bank, keep it and guard it with your life. Forget the seven year rule, if you have outstanding debt. Keep all paperwork including receipts, statements etc for at least as long as the debt is owed. You’ll spit tacks if you find you tossed them out when the collectors come knocking. Paperwork has a magical way of disappearing.
Today with modern technology you can scan documents to a computer. Just make sure though that you do keep paperwork for anything that has a “wet ink” signature.