First Direct - Credit Report

premierfella

You are absolutely right to raise it for the attention on here given that you mention that other banks do not apply the same harsh interpretation of what is an "overdue" payment. And don't get me wrong, I am not seeking to justify one way or the other what First Direct are reporting to the CRAs.

However, have I got this right? A customer at XYZ Bank (i.e not First Direct) can bounce direct debits regularly over many months and would still have a credit record that shows a nice green line of "0"s. This seems extraordinarily generous to me and would surely mean that your credit report was not a true reflection of your real credit risk to lenders?

I think I understand your point on same day credits to cover the direct debit (i.e. similarity to making a payment on your credit card within a day or two having bounced the monthly direct debit payment to it), but am unsure about how that would work in practice on your current account - a direct debit is either bounced or paid - any payment made after a direct debit is bounced doesn't change the fact that it was bounced in the first place? (no doubt I am missing some point here that someone will put me straight on).

jon_boy75

jjhamil wrote: »

Only Paddy, FD told me they can place a marker on anything even if it is not paid to them.
I thought exactly the same as you but the bounced payments were for a DD to my gym, nothing to do with FD!!

it's taken me a while to find someone else, but yes, this has now happened to me too....I will PM you, but im interested to know how far you got with your complaint to first direct?

J

Mikhail

jjhamil wrote: »

Just wondering if anyone else has experienced this?

I've just found out that if you have a bounced direct debit from a First Direct current account - even if you pay it the same day - they sent that to the credit reference agencies as a late payment, which flags up as a '1 / Warning' on your credit record.

The customer services woman has just cheerfully told me they are the only bank that do it and that their regime is 'harsher' than other banks.

Other banks don't do it unless the payment is a month late but FD do it even if you pay the bounced payment within the hour! Astonishing and a total rip off.

It must have hit tens of thousands of people ...

I only found out as they have placed SIX 'Late Payments' on my credit file, even though I have never not made a payment.

I am very angry and want to warn others.

Thank you for your comment, now I can explain my experience with HSBC they btw do the same thing. My first bank account was with them and I didn't even have an overdraft facility, I have failed to pay a direct debit only once and indeed they have reported that as a late payment, I've noticed it years later and was able to correct it via Experian. Now it makes sense, it was not a mistake as I thought.

stclair

You will get a late payment marker on your credit file if:

• Your overdraft balance has been greater than your overdraft limit for one to
two months.
• Cheques, direct debits and standing orders may have been bounced to keep
the account in order.

As detailed on page 14:

http://www.experian.co.uk/downloads/consumer/YCREJul08.pdf

I do think its abit harsh they report there information very quickly.

xavisxavis

Yes - I do agree with the OP. First Direct are very strict with everything, even security!

izools

However First Direct and HSBC give you the facility to view direct debits pending to leave the account the following working day along with BACS transfers due to credit the account the following working day.

This gives the account holder the opportunity to cancel any DDs they can't afford before they cause charges to be incurred / adverse information to be reported.

Whilst I feel FD's interpretation of Experian's rules is on the harsh and strict side, I agree with premierfella in so much as the other banks are very generous to allow so many customers to bounce DDs and SOs whilst still reporting positive information to the CRAs.

I, personally, have had no trouble with HSBC, but then I don't set up DDs or SOs that I can't afford to pay.

A_Flock_Of_Sheep

First Direct are loved on here but I think they are craaaaap. I went with them for the £100 and found them hopeless so got the other £100 for leaving.

I have had bounced items with the Cumberland Building Society and it has never even show as an amber dot on my file. In fact they have waived the admin charges when I ask. They must be more generous to their local members.

KingElvis

Just pay your direct debits on time and there wouldn't be an issue, I say good on them for reporting the truth to the CRAs

A_Flock_Of_Sheep

KingElvis wrote: »

Just pay your direct debits on time and there wouldn't be an issue, I say good on them for reporting the truth to the CRAs

Perhaps everyone should do it. Council Tax, Electric, Gas, Water TV Licence I am sure there would be some pretty wrecked credit files for even those who think they are credit worthy.

izools

Thing is, the only reason anyone should be stricken with bounced direct debits or standing orders is lack of foresight.

Even when going through bankruptcy I didn't ever incur a penny in charges on my current account nor did I bounce any cheques, direct debits, or standing orders. I was up to my eyeballs in debt and relatively speaking, poverty stricken. However I cancelled any standing orders and / or direct debits that I couldn't afford and dealt with those lenders under separate cover.

All that needs to happen is account holders cancel upcoming regular payments that they haven't got the readies for and pay the companies concerned when they do.

Anyone unable to do this, IMHO, doesn't know how to use a current account properly, ergo their credit report should absolutely reflect their (in)ability to use an account within the terms they agreed to.