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Striking defaulted payments from my credit record

DaMint
DaMint Posts: 17 Forumite
Seventh Anniversary Combo Breaker
Hi,

Please forgive me if this is a bit of a silly question, I'm really trying to get 'moneywise' as it were, and reading all the forum posts etc but I was wondering if someone could please offer me some advice.

I used to bank with Lloyds TSB and took out a Career Development Loan in 2006. The repayments were suspended for 5 years in accordance with the terms of a loan, and were due to start being paid back in 2010.

In Sept 2008, I took a Further Education Loan from Natwest. As a condition of that loan, I had to open a current account with Natwest, which I did. As I was a student, and not working at the time, no wages were paid into the Lloyds account, and in November 2008 I received a letter from Lloyds TSB saying they were closing my account as I wasn't using it.

I had an overdraft of c.£2k on my Lloyds account. In order to close my account, they requested full and final payment of the overdraft. They then (without my knowledge or consent) took the full payment of the overdraft amount from my Natwest account (it had the full loan from Natwest paid in to it). I must stress, at no point was I notified that a) payment would be taken b) payment was due on a specific date c) I never gave my new bank details to Lloyds TSB.

Anyway, since they took the full overdraft amount (and remembering that I really am clueless about money) I assumed that as part of the closure of my account, they would transfer all direct debits, most importantly, the CDL from Lloyds to be paid starting 2010. Cut to Dec 2010, I receive a letter from Lloyds TSB saying that they have tried to take 2 payments, that I have been charged X in fees and interest, and the loan has now paid to Collections as I am in arrears. I called to pay off the arrears and have not missed a payment to date.

My question (after a somewhat long introduction) is, is there any way I can apply to Lloyds TSB to ask them to get rid of the default markers that are on my credit file? As it was a current account they maintained, and a loan that was issued by them, I really don't understand how/why they didnt transfer the direct debit mandate and how they closed the account with an active loan direct debit still attached? Has anyone else experienced this? If so, I'd be really grateful for any insight.

Thanks

Comments

  • If you feel they have acted incorrectly then you should raise a complaint to them and in the part where you state what resolution you want then say that you want the Credit Reference Agency updated.
  • DaMint
    DaMint Posts: 17 Forumite
    Seventh Anniversary Combo Breaker
    If you feel they have acted incorrectly then you should raise a complaint to them and in the part where you state what resolution you want then say that you want the Credit Reference Agency updated.

    Thanks for your reply, sorry to pester but can I please check, does it sound like they acted correctly? I've never closed a bank account before and I'm unsure if it is my responsibility to transfer direct debits or whether it is Lloyds, considering that they initiated the account closure?
  • I would say it is the responsibility of the customer - not the bank. You say you didn't give them your new account details, so how would they have know where to transfer them to?

    It is this statement that concerns me:

    "They then (without my knowledge or consent) took the full payment of the overdraft amount from my Natwest account (it had the full loan from Natwest paid in to it). I must stress, at no point was I notified that a) payment would be taken b) payment was due on a specific date c) I never gave my new bank details to Lloyds TSB."

    How did they know where to take the money from? Someone must have told them an authorised the payment - banks can't just reach into random accounts (especially not at other banks!!) and take money.
  • DaMint
    DaMint Posts: 17 Forumite
    Seventh Anniversary Combo Breaker
    How did they know where to take the money from? Someone must have told them an authorised the payment - banks can't just reach into random accounts (especially not at other banks!!) and take money.

    This is what puzzles me the most! I had assumed at the time that as I was sent a letter from Lloyds asking why I wasn't using my account (I was a student and not working so there were no regular payments being made to the account) Lloyds got notified that I had opened an account with Natwest. I think if I remember, there is a box that you can tick when you open a new account that states you want that new account to be your main account and for existing direct debits to be transferred (I've recently done this, so I think my understanding is sound).

    As Lloyds received the notification, they shut down the account, but first debited the full amount of the outstanding overdraft from the loan I took with Natwest. But there was no letter/phone call to say we will be taking £X from you on X date. I didnt want to shut down my Lloyds account (I'd opened it as a student) and I didnt want to pay the whole of the overdraft back in one go.

    I suppose I am just wondering if this is an unusual occurrence, given that it happened a couple of years ago, I'm unsure of the best way to proceed, although I am miffed that this has damaged my credit file due to a mistake that I am pretty sure I didnt make

    But thank you for your reply, its given me something to consider, especially when I write a letter to Lloyds.
  • Are you sure that you did not sign a transfer of account form at Nat West?
    IMO this is the only way that the 2 accounts could be linked.
  • DaMint
    DaMint Posts: 17 Forumite
    Seventh Anniversary Combo Breaker
    Are you sure that you did not sign a transfer of account form at Nat West?
    IMO this is the only way that the 2 accounts could be linked.

    This could have potentially happened, I know that its a tiny box that some people auto tick (the representative who did it for me a couple of months ago ticked the box without asking and I had to draw it to her attention), but even still, assuming I did tick the box (or it was ticked by accident and I never noticed), that would mean that the direct debit for the loan should have been transferred as well? I'm confident that I received a letter from Lloyds saying the account was being closed due to non-activity, but I could be mistaken (only human :))
  • DaMint
    DaMint Posts: 17 Forumite
    Seventh Anniversary Combo Breaker
    Also, thanks to everyone who has replied, I don't mean to go round and round in a neverending analysis of my situation, I am just curious to hear thoughts on whether it should be something that I try to pursue with Lloyds. I really appreciate everyone's insight
  • I'm presuming that you didn't have any other DDs on the account since it was being closed because of inactivity? If there were DDs, though, did they transfer them?

    I suspect what happened is that the account was closed BEFORE the DD for the CDL was processed for payment (i.e. it wasn't actually active at that point) so there would have been no apparent DDs to transfer....... and I'm afraid that DDs are the customer's responsibility ultimately.

    I also suspect that you did, indeed, tick that little box (or similar) because there is no way that LLoyds could have simply applied to NatWest for a random payment. How did you tell them you would be repaying the overdraft so that the account could be closed? You could ask LLoyds for a copy of the authorisation to take the money from your NatWest account - and ask NatWest for a copy of the request. I'll be really surprised if your signature isn't on it somewhere!

    Anyway......the upshot is that I'd not hold my breath that you can get the default markers off your account - you did miss two payments and, sorry, but they were your responsibility unless you could actually prove negligence by Lloyds and that doesn't look likely at this stage.
    ....Practically Perfect in Every Way......:grinheart
  • I agree. Give it up IMO
  • Macca83_2
    Macca83_2 Posts: 1,215 Forumite
    Sounds like an automated account transfer to me. You've asked Natwest to transfer all d/d's, standing orders, credits etc... Some companies will also close the old account and transfer a balance. In order to do so Lloyds have requested the balance to be paid and hey presto... Your New Natwest account is minus your New loan
    and i agree with Janie, at the time of processing, your cdl direct debit probably wasn't active.
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