It has been reported in ‘Scottish Financial News’ that Scots who pay off outstanding debts could continue to be penalised because the authorities are not being informed of payments, the Registry Trust says.
The warning comes from Malcolm Hurlston CBE, chairman of Registry Trust, the non-profit organisation which collects decree and judgement information from jurisdictions across the UK. “Many Scottish consumers are not getting the credit they deserve when they are not informing Registry Trust that a settlement has been made”, Mr Hurlston explained. “So 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.”
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.
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 shakeup 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.”
Hurlston 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. 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 frailty” 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.
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.
Stephen Cowan, Director, Yuill + Kyle