Unexpected Default

[SljHall]

I had a nasty surprise 2 weeks ago when I checked my credit score to see it had been hugely impacted by a default that Virgin have placed on my credit file, which is now impacting my remortgage! 

For context I have had nothing but issues since joining Virgin in 2021 - terrible customer service, internet not reaching further then 1 room, internet constantly dropping out, being lied to and given false promises.

Then end of August 2022 I received an email advising me my contract is up mid September and will be increasing by £20+ - they gave me 21 days notice but expected me to give 30 days notice. I complained that they did not give me enough notice and I was not happy with the bill increase so I would be leaving - after an extremely tedious conversation where if I am honest I left pretty confused but was assured I would be owed money. 

My normal direct debit did go out in September and my contract ended 29/09. I returned my equipment (which they made another headache!) and now they are telling me I owe the £17 for additional days service and that’s why they have put a default on my account.

I was never notified a payment was due nor was I notified that a payment had been missed or attempted and any warning regarding a default. As far as I was concerned we were all settled up even my Virgin Media account when I sign in now says all payments have been made and nothing is outstanding in September & October - then there is a £17 payment showing as due under November! 

I’ve raised a complaint .. another terrible process & appalling customer service .. from them ignoring every question I’ve asked, calling me the wrong name and filing the complaint as regarding poor customer service - I’ve clearly advised the complaint is regarding no notice and the default. I requested the default be removed but I am getting the same poorly written response and telling me to call in - which I do not want to do as I’ve been lied to before and the advisors are not clear because they never seem to know what’s going on!! The emails have implied but not been clear that they would remove the default but when asked them to confirm they didn’t and they also at one point wrote the amount was written off but in the same email said it was valid and payment was due!! 

I’ve asked for a letter of deadlock 3 times as they haven’t answered my questions and I still don’t know why the payment is due they keep just advising me to pay it. I am at my wits end .. any advice? 

(I’ve also raised a SAR and written to the credit team but heard nothing yet) 

[japitts]

I could be mis-reading this lengthy post, but the root of the issue seems to be a popular misconception on your part..

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@SljHall wrote:

Then end of August 2022 I received an email advising me my contract is up mid September and will be increasing by £20+ - they gave me 21 days notice but expected me to give 30 days notice. I complained that they did not give me enough notice and I was not happy with the bill increase so I would be leaving

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VM's contracts are not fixed-term ones that end on a particular date, they are rolling contracts that have minimum terms but then continue regardless. Many customers have time-limited discounts that tally with those minimum terms, but that does not mean the contract ends. The discounted price & standard prices are shown on both your contract and every monthly bill, so technically you've had 18months notice of the price increase.

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@SljHall wrote:

My normal direct debit did go out in September and my contract ended 29/09. I returned my equipment (which they made another headache!) and now they are telling me I owe the £17 for additional days service and that’s why they have put a default on my account.

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Did you wait for your final bill after disconnection before cancelling the regular payment? If not, and you've not settled that valid final bill, then that default sounds potentially valid.

The process to request removal of an alleged inaccurate credit file entry is to email all the details, with supporting evidence, to creditfileamendments@virginmedia.co.uk who should respond within 28or so days - and if they agree the entry is incorrect, should then arrange removal. It doesn't sound like you've done this yet.

If all else fails with your unresolved complaint, and it's been more than 8weeks since you raised it, then you don't need a deadlock letter to escalate to CISAS. Check the second bullet point under https://www.cedr.com/consumer/cisas/complainnow/ 

If, however, this complaint & credit entry all relates to the disputed payments at the end of your minimum term - then it would be worthwhile making sure of the dates & amounts involved.

[cje85]

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@japitts wrote:

If all else fails with your unresolved complaint, and it's been more than 8weeks since you raised it, then you don't need a deadlock letter to escalate to CISAS. Check the second bullet point under https://www.cedr.com/consumer/cisas/complainnow/ 

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VM aren't using CISAS anymore, They switched to Ombudsman Services on 1st January:

https://www.ombudsman-services.org/providers/virgin-media

[japitts]

Good point, I thought that was Jan 31st for some reason.

Whilst true (and thanks for pointing it out), it doesn't alter the 8week rule that Ombudsman Services also abide by.

The third bullet point on their website confirms the same.

[SljHall]

I understand regarding the minimum term and discounted rate which your correct mine was 18 months. I just thought they would give me 30 days notices of the term ending/price increase and when I called them they told me they had emailed me on the 14/08 to give me that notice but they didn’t send the email until 24/08. 

I’m not sure when the direct debit was cancelled and my bank was unable to tell me either, they did advise that VM could have set up a new mandate if payment was owed. I didn’t receive a final bill or any other communication from VM other than about returning equipment.

When I logged on the account it says the final bill was paid - I know now it wasn’t but it showed on my account it was paid & no outstanding bill and since I never heard from them until I contacted them about the default, I thought everything was settled. 

[SljHall]

Also just to confirm I did email the credit adjustments team about 10 days ago. 

[japitts]

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@SljHall wrote:

I understand regarding the minimum term and discounted rate which your correct mine was 18 months. I just thought they would give me 30 days notices of the term ending/price increase

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As I mentioned previously, your contract lists the standard price and all your discounts with the expiry dates. The same info is on every monthly bill. The out-of-contract notifications you mention are an Ofcom requirement that's come in the past few years, but the pricing info has always been available with VM as long as I can remember.

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@SljHall wrote:

I’m not sure when the direct debit was cancelled and my bank was unable to tell me either, they did advise that VM could have set up a new mandate if payment was owed.

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No company can set up a DD without you specifically authorising it. They certainly can't do it off their own back - you're the account holder and payments on the account are ultimately your responsibility.

[Andrew-G]

SljHall, you're right to worry about a default on your credit history.  That'll remain visible for six years (ie until the end of 2028) to potential lenders, mortgage providers or landlords, service providers (electricity, gas, water, telecoms), car finance providers, contract mobile phone sellers, even large employers routinely check the credit history of prospective employees.  Doesn't mean you will be refused credit, but some things will be tricky, and you may find that the best deals are not offered to you.  You could just pay the amount off and it then at least shows as a default you've settled, and you can add a Notice of Correction to the credit file to explain it, but I think that approach should be a last resort if the ideas below don't work for you.

Let's park the question of valid notice of a price increase for the time being.  The important facts seem to be that (1) you cancelled your contract, and VM processed that cancellation, but (2) a final payment that VM believe to be owed was not taken, and (3) as a result a default has been notified to the credit reference agencies.

What now counts is WHY the final payment was not taken.  A direct debit instruction cannot be cancelled by the company - they can choose to delete the details from their systems, and intentionally or unintentionally not make a request for payment against it, but they cannot cancel an instruction given by you to your bank.  You gave your bank a continuous payment authority, and if you did not cancel the DD, then it still exists because a DD stays in place until either the account holder revokes the instruction, or until the bank cancels it because it has not been used - typically after 13 months without any payment being requested. 

If you did not actively cancel the DD, the authority still exists and in this case, the default has occurred because (i) VM did not process the final payment using the DD authority they had, and (ii) they did not notify the account holder of any outstanding debt requiring manual payment.  If this is the situation, then VM owe you compensation for the nuisance and distress, and need to remove the default from your credit history.  Ombudsman Services should be able to resolve this for you.

If you cancelled the DD yourself by an instruction to your bank (by phone, internet banking or other means), then unfortunately you have in part caused the problem, and the route forward is complex, and much will depend on what information was provided by whom and when.  If you cancelled the DD having been informed that you would be owed money, and seeing two months of statements that showed nothing to pay, then I think that liability still sits with VM to pay compensation, to suck up that final payment, and to clear the default from your credit history.  However, in this case we are straying into matters of consumer credit law that are beyond my knowledge.  You could try Citizens Advice, which is free.  Sometimes CA are very, very good, but I still suspect there's potentially legal details around the nature of enforceability of debt and requirements for information that may be beyond their advisors. 

If you cancelled your DD, you think CA are not able to give you sufficiently detailed legal advice and you want to take this matter further, you could consult a lawyer, but that becomes very expensive very quickly.  An alternative I'd recommend you consider would be taking out a year's subscription to Which Legal Services.  For £99 you'll have access to a lawyer at the end of the phone, who will deal with the majority of legal issues a private individual might need other than divorce and family law. They won't represent you and won't normally write letters on your behalf, but they will explain your rights, tell you the exact language to use, and how to take a matter to court if you need to.  In my experience, as soon as I start using the correct language and refer to relevant law, most companies sober up and cave in.  They helped me get a £40k settlement during an employment dispute, so I'm a big fan and have been a subscriber for years - the peace of mind is very useful even if I don't use it.  There is a more expensive option of paying a small joining fee and a monthly rate, perhaps try that if £99 is a big deal.  

[SljHall]

Thank you for your advice it has been insightful.

I must have cancelled the direct debit at some point but I can’t remember when exactly as it’s been 4 months nearly since the contract ended. The bank couldn’t tell me the exact date just that it was cancelled and the date the last payment was taken by VM. 

I thought we were settled as that’s what my VM account showed and I had no reason to make any other contact with them & I heard nothing from them either ..  next thing the default appears. 

I understand they don’t fall under the consumer credit act (?) but is there not a process they should be following if a payment is due, a payment were missed or they were planning to place a default? 

it seems bizarre that they place a default on someone’s credit file without making them away a payment is due/missed etc. if they had contacted me I’d have paid so I don’t get what they’re gaining out of this process as id still be non the wiser if I wasn’t remortgaging !!!

[Ilyas_Y]

Hey @SljHall, thanks for the update on the Virgin Media forums.

I can see you have stated that you have emailed the credit file amendment team.
May I ask if you've received an update from them?

Let us know.

Kind regards,
Ilyas.