Can somebody please settle an argument for me - if somebody has had defaults/CCJs registered on their credit file and they've now gone, do they still need to declared when applying for credit or a mortgage? My mate (who's an over eager estate agent who knows everything!) reckons that once they've been cleared, either by full settlement or they've gone because they're over 6 years old, then they no longer need to be declared because there is no way anybody would ever know they existed because they've been wiped off a persons credit file. My estate agent friend (who also does mortgage brokering) reckons he's done 100s of mortgage applications where somebody has had a default or CCJs, but because they are cleared from the applicants file, they just ticked the "No previous adverse credit" box on the applications forms. He's never had an application refused where something's been found. I said he was committing fraud - he just laughed. Surely the search performed by the solicitors would uncover something.
Declaring cleared credit defaults
Jan 16, 2005
2 Replies
It would seem simple really - he is ticking to say "NO PREVIOUS ADVERSE CREDIT". If he (or, more to the point, the customer applying for finance) know that to be false, then they are obtaining services by deception.
It is indeed a fraud, and hence a criminal offence. Your friend is therefore, at the very least, assisting but from what you say he is complicit in the commitment of these offences .
The ultimate result - possible results would be lenders defaulting on the finance already agreed once they learnt of the deception - which could include immediate repayment of full amount owed. The current default status would ensure no other lender would touch them with a bargepole with consequent result of eviction. How grateful would those clients be to your friend in that scenario?
If however, the lenders only require information on defaults and judgements within the last six years, then that is a different issue entirely!
I would suggest that if your friend wants to keep his licence to broker, he review his working practices. MCOB is up and running now - and the FSA are trying to shut down 'cowboy outfits' such as your buddy's. I personally know many brokers who have already been shut down for dubious practices such as this.......he sounds like a nob.
MC
But lenders have no way of finding these defaults after the 6 year period, or do they???
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