SOME 20,000 Scots who have paid off outstanding court debts are still being penalised with a credit rating black marks because the authorities are not being informed they are in the clear.
The Registry Trust the non-profit organisation created by the Lord's Chancellor's Department that holds a public register of Scottish decrees has given the estimate of those affected while admitting changes were needed to the Scottish system, which unlike in England and Wales relies on the Scots consumer to inform them of cleared debts. Citizens Advice Scotland said there should be a review of the arrangements north of the border.
In England and Wales amendments are made to the register of county court judgments on receipt of written instructions from the relevant county court.
But in Scotland it is down to the consumer to notify the Registry Trust and the organisation admits Scots need help in clearing their name as many do not bother.
The Registry Trust, maintains a public register of all decrees and judgments over failure to manage debt across the UK, but unlike England and Wales, there is no arrangement through the courts to add those debts that are satisfied to its records which are relied upon by credit reference agencies such as Equifax and Experian.
While a Scottish decree and a county court judgement in England and Wales, will remain on credit files for six years from the original judgment date, whether the balance has been paid or not, the Registry Trust admits that Scots who do not have their cleared debts shown as satisified in their records will suffer repurcussions when trying to borrow money from lenders.
Registry Trust figures show that in Scotland just 3.82 per cent of debt decrees were marked as satisfied, far lower than the 11.98 per cent of satisfied debt judgments in England and Wales, where satisfaction rates are accepted to be higher.
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 said: "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 onto 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.
"Unfortunately human fraility means people don't bother doing what they should do.
"We want to ecnouragte lenders to tell us when a debt is satisified and not just leave it to the consumer."
“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.
Chris Pond, chairman of the Lending Standards Board, welcomed the Registry Trust moves saying: “The Registry Trust should get a good hearing for promoting consumers interests.”
The warning cames as the the amount of decrees over consumer debt is on the rise.
Between July and September this year, the total value of debt decrees in Scottish courts went up by two per cent over the year to £15,127,874 while the average value of such cases rose three percent to £2,836.
The number of debt decrees flatlined, dipping one per cent to at 5,334.
The number, total value and average value of small claims and summary cause decrees in Scotland were also close to Q3 2016’s figures, with less than a one percent change.
But the average value of an ordinary cause decree rose by 20 percent to £16,816 compared with a year ago.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article