Case Notes
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Joint credit card debt - collection action - default listing - bankruptcy of one debtor - failure to notify other debtor before listing
Mr B was very concerned when his application for a personal loan was declined because of a default listing on his credit card. A credit check had shown a listing of an unpaid credit card debt owed to another bank. Mr B could not remember even having a relationship with that bank.
It turned out that Mr B and his former wife had jointly applied for a credit card account many years previously. The application had been accepted and a card issued to his former wife, but he had never had a card on the account. After they separated, his former wife continued to use the card and made all repayments until she ran into financial difficulties in 2006. At that point the debt began to mount up, and she was eventually declared bankrupt. The debt was then listed as a default against both her and Mr B.
Mr B did not find out about the debt until more than a year after his former wife’s bankruptcy.
Mr B understood the legal position and was prepared to repay the debt. However, he was very concerned that it had not been brought to his attention earlier so that he could make payment arrangements and avoid a default listing. Although he was the only person of his name in the telephone directory for the area in which he had always lived and therefore was easily traceable, it seems that neither the bank nor the collection agency had made any attempt to contact him.
Mr B was told by his bank’s complaint officer that where there was a joint account the bank only needed to contact one of the card holders and that, as his former wife was bankrupt, the debt was his.
My investigator contacted the bank, and after some discussion it was agreed that the bank would:
• recall the debt from the collection agency
• remove the default listing
• write off the collection charges
• reduce the debt by about 12%.
For his part, Mr B would repay the reminder of the debt by instalments.
The complaint was settled on that basis.