Barclaycard - reduced credit limit

mixedupdebt

Hi all,

I know a few others have posted about this so I'll keep it short.

Got an email from Barclays saving my credit limit had been reduced (to just above what I owe them) as a result of information passed to them by a credit agency. I normally pay the min each month and have only missed 1 or 2 payments dates to date (but any late payments were paid up).

On opening a CC, I agreed to allow them to do a credit check (just the one thou!) to determine if they would give me a card/account. Every so often, they would up my limit (poss. based on their own internal data).

Questions:
1. How can they do a followup 'check' on my credit details without my consent? I presume this is what happened as opposed to the credit agencies just offering the data. Let me know if I'm wrong thou on this one.

2. Do the credit agencies actually pass details of your account back to the existing lenders? Surely what credit I have with another company is no business to another company once they have already agreed to give me an account as the decision to lend to me in the first place is based on the information obtained at the time of requesting to open it?

Thanks.

Mixedupdebt.

marksoton

If you look at your credit agreement you will see that they are able to continually monitor your account. Of course they have to keep a track. The information supplied at the outset of your agreement with them could now be completely different due to any number of circumstances. The late payments will not have helped your cause.

Neither the CRA's or Barclays have acted improperly.

System

Hi mixedupdebt

You're wrong on both counts I'm afraid.

1. Your consent is obtained when you sign the credit agreement (physically or digitally). The section containing the relevant details will probably be headed 'how we use your information' or something similar.

2. Barclaycard will pass your account conduct to the credit reference agencies monthly, this information will then be available for other lenders to see either through a monthly 'feed' or a full credit search. Any of your lenders may then make decisions based on the available information.

IMHO the reason you have had your limit lowered is because you make minimum payments and have missed payments. Barclaycard may think you are struggling and are seeking to reduce their exposure to risk.

As far as I can see Barclaycard have done nothing wrong.

Regards
UNDERGROUND

mixedupdebt

Thanks guys.

I'm sure they will always have something in the fine print to cover their own back sides.

Would you at least agree that it raises a few questions as to what information is passed around about you from lender to CRA and back? Most people assume that the information goes one way - from the lender to the CRA and that the CRA information only goes to new requests for information. Not as seems to be the case that all lenders have a live/monthly feed back of information.

mixedupdebt

If its built in to the T&Cs to allow the lender to get updates back from the CRAs, is this something for a wider debate to have everyone bunch together to lobby for a change in practice to stop the CRAs sharing all future updates with any existing lender? Again, my point on this one is that the lenders choice to lend to me should initially be based on the information given by the CRAs at time of application. Any additional lending / reductions should be based on internal lenders information only, based on how I acted with that lender.

I know its not a perfect world, but heres hoping!

Thanks.

marksoton

mixedupdebt wrote: »

Thanks guys.

I'm sure they will always have something in the fine print to cover their own back sides.

Would you at least agree that it raises a few questions as to what information is passed around about you from lender to CRA and back? Most people assume that the information goes one way - from the lender to the CRA and that the CRA information only goes to new requests for information. Not as seems to be the case that all lenders have a live/monthly feed back of information.

But the problem is they have to have a way of monitoring your account. It would be a pretty irresponsible lender who just assumes circumstances never change. People loose jobs, take paycuts etc all the time.

The flipside of course is that they record positive information as well, that can help you improve your credit status.

System

mixedupdebt

I don't agree with you on this.

I think it is only right that lenders should have a fuller picture of their customer's financial position so that they can make responsible lending decisions and reduce their own risk.

People's circumstances change (i.e. new credit lines, varying debt vs. income ratio, salary etc) and lenders quite rightly use CRA information to react to these changes.

Regards
UNDERGROUND

chattychappy

I have some sympathy for the OP.

In any other industry the "sharing" of information about customers would be seen as anti-competitive. Already the credit card companies are beginning to look like cartels complete with their concerted practices.

Of course this is all justified as being in the "public interest" and "responsible lending". But that's always been a justification for these practices.

marksoton

chattychappy wrote: »

I have some sympathy for the OP.

In any other industry the "sharing" of information about customers would be seen as anti-competitive. Already the credit card companies are beginning to look like cartels complete with their concerted practices.

Of course this is all justified as being in the "public interest" and "responsible lending". But that's always been a justification for these practices.

But the information is available to any company offering credit facilities so it's hardly a cartel !

Besides which the only thing these companies can base their lending decisions on is generally previous conduct of accounts with other parties.

I can't think of a viable alternative...

chattychappy

marksoton wrote: »

I can't think of a viable alternative...

It's the increased amount of data about your accounts that get passed on that concerns me in particular - not just whether you are behind with your payments, but whether you've taken a cash advance, whether you are you're on a special deal, whether you're paying more than just the minimum repayment. even how many searches you've done.

Meanwhile they they rarely bother these days to see proof of income, capital owned, outgoings etc, ie do real due diligence.

marksoton

chattychappy wrote: »

It's the increased amount of data about your accounts that get passed on that concerns me in particular - not just whether you are behind with your payments, but whether you've taken a cash advance, whether you are you're on a special deal, whether you're paying more than just the minimum repayment. even how many searches you've done.

Meanwhile they they rarely bother these days to see proof of income, capital owned, outgoings etc, ie do real due diligence.

But all of those things are proof of how one conducts their credit accounts !

As for your latter point,well most of that is questioned in the initial credit check. Any change in these circumstances would presumably be reflected in the very things you are saying should not be included.