Scots still penalised after paying off court debts
SOME 20,000 Scots who have paid off outstanding court debts are still being penalised with a credit-rating black mark because the authorities are not being informed they are in the clear.
The names of many people from north of the Border who thought they had put their financial problems behind them are still being tarnished years later, affecting their ability to secure mortgages.
The Registry Trust – a non-profit making organisation set up by the Lord Chancellor’s office – said people in Scotland are frequently unaware of the importance of letting it know court debts have been settled.
It means their “black mark” is still on their files and credit reference agencies – such as Equifax and Experian – add it to their records which are then used by building societies when mortgage applications are assessed.
A different system operates for people owing debts in England and Wales, where amendments are made to the register of county court judgments on receipt of written instructions from a county court.
Citizens Advice Scotland (CAS) and the Registry Trust are now calling for a shake up of the system north of the Border.
Susan McPhee, head of policy at CAS, says: “If it is the case that the system is failing consumers who have legitimately paid off their debts then clearly that needs to be reviewed.”
Malcolm Hurlston, chairman of Registry Trust said that the debt pursuer, like a lender, or landlord should take on more responsibility for informing the authorities over the cleared debt. He added: “Many Scottish consumers are not getting the credit they deserve because they are not informing Registry Trust that a settlement has been made.
“It is up to the punter to tell us at the moment. That’s the system that everybody has always had. It seems to me it would be a good idea if the consumer had some additional help to do that.
“Quite a lot of people forget about [informing us] then they want to take out a mortgage and they say you have a debt you haven’t paid off, and yet they have and didn’t tell anybody.
“When the information goes on to the register, everybody receives a letter that is agreed with the Information Commissioner which says if you pay off the debt, tell the Registry Trust and it will be marked on your file.”
He added that “human fraility” means many people don’t bother to register the change in their status.
“Now we are working closely with concerned lenders to ensure that they notify us directly when a debt has been satisfied, and the onus does not lie only with the consumer,” he said.
The Registry Trust maintains a public register of all decrees and judgments over failure to manage debt across the UK, but unlike south of the Border, there is no arrangement through the courts to add those debts that are satisfied to its records.
In Scotland, 3.82 per cent of debt decrees were “satisfied”, compared to 11.98 per cent in England and Wales.
Chris Pond, chairman of the Lending Standards Board, said: “The Registry Trust should get a good hearing for promoting consumers interests.”
Many Scottish consumers are not getting the credit they deserve