Unauthorised credit check - legal position?

BoltonMinx

A well known company declined me for a card. I emailed to ask how I could go about appealing and the customer service recipient instead did a new application. According to experian, my credit file is private and lenders only have access with specific authorisation from me. AFAIK, you have to advise the person they are consenting to a credit check before you can go ahead and perform one.

What's my legal position on this? I didnt actually want to proceed but wanted to find out what information they would need IF I decided to.

Any thoughts? I've drafted the letter below as I can ill-afford a single extra credit check as Im attempting to do some 0% borrowing. Ive been told it's a little overboard though Also, if I do decide to pursue monetary compensation (not sure yet!) how much is reasonable?

Re: Unauthorised credit check

On the *removed*, I emailed customer services to request information about appealing a declined credit card application. I presumed I would receive details of how to proceed as I anticipated I would have to prove that my circumstances have changed.

Instead, I received a response on the *removed*, from *removed* (copy attached) which indicated that he had performed a credit check in order to re-try the application which had then come up as declined.

I was quite surprised to receive this response as I had made a request for information and not specifically asked for another application to be made. I am even more concerned about this as I was obviously not given the chance to demonstrate that my circumstances have changed.

I then called your customer service line on *removed* at *removed* and spoke to *removed*. He at first assured me that there was only one credit check on my account and only at my insistence did he investigate further and confirm that a credit check had been performed.

My complaint is now two-fold:
Firstly, the credit check you carried out was not authorised and breaches the confidentiality of my credit file and my rights to privacy. I believe this unauthorised credit search will impact negatively on any attempts to apply for credit and could be a significant factor resulting in my being turned down for credit elsewhere.

Secondly, your customer service personnel misinformed me which is at best incompetence and at worst deliberately deceitful.

As compensation for mistakes by your representatives, I am seeking an apology for the mistakes made so far, damages in the region of £???? and a notice of correction sent to the appropriate credit agencies. I anticipate a response in writing within 5 working days of receipt of this letter which has been sent recorded delivery. No written response will be taken as consent to these terms and may result in escalation of this matter to the financial ombudsmen and the information commission.

Yours faithfully

---lee---

Just a thought, but is the credit check of an unspecified type? If so, it will only be visisble to you on your credit file and not other lenders, therefore it would have no impact on your credit file.

It's similar for a quotation type, which would be visisble to other lenders, but they should not hold it against you.

Astaroth

What financial loss have you incured because of this? I think you have created an issue for yourself by getting uptight about it rather than one occuring in the first place.

If there is more than one check by the same company within a short period (normally 1 month) then other lenders will consider this to all be part of a single application and not multiple footprints on your records. Likewise as lee says not all items on credit files are visible to lenders.

Personally I would chuck the letter in the bin and decide if you want to appeal and if credit really is such a good thing.

BoltonMinx

---lee--- wrote:

Just a thought, but is the credit check of an unspecified type? If so, it will only be visisble to you on your credit file and not other lenders, therefore it would have no impact on your credit file.

It's similar for a quotation type, which would be visisble to other lenders, but they should not hold it against you.

No, its a credit check for a credit card, so not a quotation type

Astaroth wrote:

What financial loss have you incured because of this? I think you have created an issue for yourself by getting uptight about it rather than one occuring in the first place.

If there is more than one check by the same company within a short period (normally 1 month) then other lenders will consider this to all be part of a single application and not multiple footprints on your records. Likewise as lee says not all items on credit files are visible to lenders.

Personally I would chuck the letter in the bin and decide if you want to appeal and if credit really is such a good thing.

I could suffer financial loss as the extra footprints on my account may cause other lenders to decline me - I could for instance be paying 18% on a card and need a lower interest card. This additional footprint wouldnt help. This check isn't the 2nd in a short period, the initial application was over 3 months ago, in fact, thats why the did another credit check apparantly.

To be fair, they made an error and I beleive that its good to complain, even if all your seeking is an apology. Maybe my complaint will highlight a shortcoming in their business practices or lead to the person involved being re-trained and not making the same mistake again.

As for if credit is really such a good thing, I'm not sure why you've made that comment. If I was in a sticky debt situation, I'd post this in debt-free wannabe not here. I work hard to maintain my credit worthiness and obviously don't want things on my credit report (which I check regularly) that shouldnt be there. Its the principle of the thing And I really am looking for the legalities of the situation, though, you have a right to your personal opinion of course

lisyloo

My understanding is that the general legalities are as follows:

You have an obligation to try and minimise any losses, so you should ask for this problem to be corrected.
If you either deliberately increase your own losses or don't do something simple that could easily minimise them, then this would be looked on negatively by a court (not saying you are just stating the information that you asked for).

In this case it's quite clear that you should ask for the check to be removed in addition to any complaint you want to make about their processes.

Secondly to win compensation you would firstly have to incurr and loss AND be able to prove it.
Becuse credit scoring is in general private I suspect it would be very difficult for you to actually PROVE that you were turned down because of this check even if you strongly suspected it.
In general companies do not give you specific information as to why you are declined.
I understand that this can be very frustrating if you strongly suspect something (not least for the police) but I think it's quite correct that our legal system is based on PROOF.

Bets thing to do is ask them to remove it.
If you want to complain for other reasons (and I think they are good) then do that as well.

jonnyb

You can only make an official complaint to the Information Commissioner under the data protection act. They have the power to deal with the company in question.

http://www.ico.gov.uk/eventual.aspx

It could be argued that as you gave your permission for the company to perform a credit search when you applied, that permission could be used for subsequent searches in support of the intial credit application.

Compensation - no chance ! Goodwill gesture maybe, but it will be impossible to prove that another lender has turned you down solely on the basis of one extra credit search, sometime in the future.

Remember that footprints only show for 12 months, so if the intial application was over 3 months ago, then it's already someway to dropping off your file.

BoltonMinx

Thanks guys, I'll tweak my letter slightly for a more disappointed loyal customer tone and not request compensation, just hint that a goodwill gesture would be nice Hopefully, it will be removed soon-ish. The last 2 corrections (hmm, is it just me?!) went through in less than 6 weeks.

PBA

You did authorise them to search your credit file when you applied for the app. Then when you emailed them about an appeal 3 months later, they did another credit search (which you had already authorised them to do on your initial app) to see if an appeal was possible. Nothing was done without your request or consent, so I can't see any grounds for an apology being due.

Bossyboots

PBA wrote:

You did authorise them to search your credit file when you applied for the app. Then when you emailed them about an appeal 3 months later, they did another credit search (which you had already authorised them to do on your initial app) to see if an appeal was possible. Nothing was done without your request or consent, so I can't see any grounds for an apology being due.

Unless it stated in the original application this would happen on an appeal, I do think they could have told the OP that to deal with her enquiry would mean another credit check so she had the option of whether to proceed. That would have been the polite and courteous thing to do. It does not mean that what they have done was wrong or illegal, just not the best way they could have handled the situation.

lisyloo

I do think they could have told the OP that to deal with her enquiry would mean another credit check so she had the option of whether to proceed.

I agree with you, but a lot of companies try to keep costs down by emplying call center operatives who skills are simply in following a script and not actually understanding any of the issues.
This has become worse since many call centers have gone to India.

Unfrotunately this puts more onus on the customer to check out these things for themselves.

I thi the customer ALSO has a responsibility to make sure they are aware of what they signed up to (general statement, not getting at the OP).

M_Thomson

Boltonminx, I think your letter is taking things a little seriously. I don't understand why the appeal took over 3 months, but the lender does have a right to do another credit check if there has been that much time that has elapsed, regardless of wether a new application has been keyed or not. A lender can do a credit check on you even when you have had a card for years if they want to.

Unless you have had 20 credit searches on your file recently, an extra one won't make that much difference. Finally, the last bit of your letter states that you can go to the finanical ombudsman, it always makes me laugh when I hear people say that. The ombudsman will not even look at your complaint until you have exhausted all the complaints procedures with the financial institution and reached deadlock.