Bank ruined wifes credit rating.

mick307

After some advice what to do with this.
Cutting a long story as short as i can, loan taken out with the bank in Jan 2009, been a customer for over 20 years and almost always had a loan with them. Payments made via DD so we thought and everything ok. In August this year no payment taken but various ammounts taken from 2 accounts, total did not match the loan payment and on calling them i was told theres never been a DD set up so the bank have taken the money each month as in their T&C's. This was news to me and following 2 1/2 months of long phone calls, getting money refunded when they took it and other issues i have finally reached a conclusion, been given a total of almost £1000 compensation, DD set up, everyone happy. Bank admitted its their mistake not ours.

Until i checked our credit records.

In a 21 month period we are showing 11 missed or late payments on my wifes record, loan is in her name.

Just recently we had to return a lease car as we could not get the finance to carry on with a new car, turned down for a mortgage to do some work on the house which is currently worth around £160k, mortgage of less than £80k and also turned down for a loan and credit card. We ended up taking a loan at a higher interest rate, longer term etc.

So, my questions, would we have been refused all of these based on the bad payment record on my wifes credit rating?
Has this had a lasting effect on our credit rating? bank have promised to put it right but we already have a new loan at higher rates.
Is it worth me persuing the bank, either direct or via FSO due to the detrimental effect their mistake has had on our credit rating and if succesful what could we expect the outcome to be?

Not happy to name the bank yet, dont trust them anymore and another account has been set up, although not the one i wanted so had to take a lower level which is not the equivalent of my account with this bank, is this also due to the credit rating do you think?

Thanks

Mick.

Mark_In_Hampshire

The problem is with the method of payment. The customer is obliged in contract to make payment on the dates stated/as due.

If the customer gives the payee permission to draw the money from their account automatically, and they fail to do so, the customer is the late payer and is the one in breach of contract. That is reflected in the late payments being recorded in the credit reference file.

The file is technically, and perhaps actually correct. Were the payments late? (later than were due?) That might well have been because the payee failed to collect them but unfortunately that is not strictly relevant.

Regardless of the method of payment, the customer must pay the sums due on time. If the customer chooses to delegate the payments to the payee, that is the customer's decision, but should they make a mistake the problem is not the payee's, it is the customer's.

In this instance however since you already have admission of liability, the next step is to try to get the bank to change the credit reference file. Write referring to the previous payout awarded and admission of the errors they made and request that the credit file be updated. Should that fail, try using the dispute resolution service of the CRA (Equifax, Experian etc)

With regard to claiming for your consequential losses, it is a tricky one to prove categorically since the bank who made the error may correctly claim that the reason for the decline may, or may not, have been due to the entries on file. The case against the bank (and why you were given compensation) is that the payee had a duty of care to exercise their duties with "reasonable skill and care" (I don't recall the precise wording) and by failing to collect the payments, they failed in that regard. So given this has already been compensated against (though I suspect the letter you got may have had a line like "without admission of liability" or "without prejudice") you have a means to pursue further compensation and a basis for such a claim.

mick307

Thanks very much for the reply, i understand what you are saying and it is helping me to decide whether or not to push further. The bank have agreed to change, if thats possible, the credit file and have acknowledged in writing liability for the error. I am waiting on another letter confirming everything which i am sure will contain the get out somewhere.
I think its worth a reply to their letter to point out the implications of their mistake, additional interest charges, searches on our credit filoes etc and see what they say.

Thanks again,

Mick