I was involved in a minor shunt while driving more than two years ago. It was my fault so I notified my insurer, NatWest, and was told it would settle with the other driver’s insurer.

Months later, I received a letter informing me a county court judgment (CCJ) had been made against me for an unpaid insurance claim of £10,000. This was the first I had heard about the debt or the court case.

A claims-handling firm contacted by NatWest said it had contested the claim for repairs from the third party. The other driver then filed for the judgment.

So much time has elapsed that the CCJ can no longer be removed from the register. NatWest held its hands up and sent me a £750 goodwill payment. However, thanks to the CCJ, I have been refused credit, an application for a bank account has been turned down, and my business expansion plans have been set back. NatWest considers the case closed. TS, London

The most frightening aspect of this case is the fact that a CCJ can be issued against someone without their knowledge. CCJs are meant to be a last resort for creditors wanting to recover a debt. If a court finds in their favour a charge can be put on the debtor’s home and the judgment remains on their credit file for six years, making it almost impossible to obtain a mortgage or even a phone contract. Defendants are notified of court action via an address supplied by the creditor and if they do not respond within 14 days the judgment is passed. This means that if the address is incorrect or out of date they lose their chance to argue their case.

Last year 740,000 CCJs – 85% of the total – were signed off by courts to recover alleged debts in the absence of the defendants, many of whom, like you, owed nothing to anyone.

NatWest, which took more than two months to respond to me about your saga, says an “avoidable internal misunderstanding” caused the third-party insurer to take the legal route. “Unfortunately, over the course of six months, the third party insurers issued no warning to us that they were considering legal action,” says a spokesperson. “The only communication was the legal summons, issued directly to the policyholder once legal proceedings had begun, which unfortunately was not received.”

Since you only have a year to get a contested CCJ removed from the court register, you have been deprived of the chance to clear your name, but NatWest says it has “worked hard” to get it hidden so it will no longer affect your credit rating. It will consider more compensation if you can prove that your business has been compromised.

If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.