MBNA Loan/ getting default removed!!

j2010oe

Hello all,

I am looking for some advice please on a defaulted MBNA loan that I had.

Here is the story (I'll try and keep it brief!)

In March 2011 I went to Benfield Ford to change my car and they applied for credit through Santander. The credit application was rejected which was very surprising as I though I had a pretty good credit history.

I went home, got an Equifax credit report which said that I had defaulted on a loan through MBNA which was news to be as I was unaware that I had a loan though them.

What had happened was March 2008 I paid off the loan with £3300 which I thought was the settlement figure but I discovered in March 2011 that I paid it short by £452 as the figure was actually £3752. The loan amount (£120) per month was paid out of the £3300 until it ran out in June 2010 and I defaulted on the loan as I had canceled the direct debit in 2008 and since moved address etc so Mbna where unable to contact me.

To be honest, I have no idea why I paid it short, but it seems like a pretty odd thing for me to do! - Maybe I was given the wrong settlement figure?? (who knows!)

On the same day in March 2011 when I found this out, I paid the £680.43 balance in full and subsequently Santander reversed there decison and I got the new loan for the car.

Anyway, over the course of 2011 I had a number of telephone conversations with MBNA about the loan and how it had screwed my credit rating but didn't get anywhere and forgot about it.

Next year my wife and I are looking to buy a house, and I want to give getting the default removed a proper go as it will affect our chances of getting a mortgage.

So the question is how do I approach it? A letter seems the best course of action. Either a/ Begging to have the default removed as an honest mistake, or b/ starting with getting all the loan information they have on me and going from there?

Something else to add is that called MBNA last week to get my account details (and speaking to 4 different people in different departments) and they couldn't find a record of me or my loan. And yes, I was deffo speaking to the right company!!!

I know I may have no hope but it's worth a crack right!!

Thanks in advance for your help.

Joe

[Deleted User]

I think no hope is probably the right assessment. It's a factual record of you defaulting and as such, you have very little chance of its removal, particularly after so long.

Clive_Woody

Sorry to be blunt, but you defaulted and that's what your record shows. Not sure you have much chance of getting MNBA to change your record.

_Andy_

It won't be removed.

The whole point of a credit file is that it accurately reflects what happened - ie that you had a default.

There would be no point in credit files if one could just ring up and say "can you remove that please"

happy_bunny_2

The only way would be if they sent you the wrong settlement figure.

I guess you don't have the letter?

Only shot in the dark would be a Subject Access Request and hope something comes to light to help you out.

JuicyJesus

What had happened was March 2008 I paid off the loan with £3300 which I thought was the settlement figure but I discovered in March 2011 that I paid it short by £452 as the figure was actually £3752.

That's your fault. Not MBNA's.

Next year my wife and I are looking to buy a house, and I want to give getting the default removed a proper go as it will affect our chances of getting a mortgage.

So the question is how do I approach it? A letter seems the best course of action. Either a/ Begging to have the default removed as an honest mistake, or b/ starting with getting all the loan information they have on me and going from there?

You can beg if you want, but they are well within their rights to say no. They've done nothing wrong, and whether it goes against you or not, or whether it was a genuine mistake or not, doesn't change the fact that you defaulted due to your own assumption that the settlement figure was a certain amount when it was actually almost £500 higher.

Doing a subject access request as stated above wouldn't help you in any way since you already know everything you need to know (i.e. you assumed a settlement figure; you didn't check whether that figure was correct; they marked it in default when you ran up arrears on the loan). There's nothing underhand or hidden about what MBNA did. You would be paying a tenner for them to tell you you'd screwed up.

Personally I would not waste my time on it.

jamesd

From the description it reads as though you may have paid the correct early settlement figure and then they instead treated it as an advance payment.

If you don't have records of how you said the money was to be used a subject access request to get their copies may be useful, prior to making a complaint that you might then be able to take to the Financial Ombudsman Service seeking a refund of the extra charge that you paid as a result of the failure to treat it as early settlement.

The Consumer Credit (Early Settlment) Regulations 2004 put a cap on the amount of early settlement charge that there can be, to roughly two months worth of interest. That seems wrong for the shortfall here unless the loan interest rate was 82%. So I have difficulty in accepting that the figures given are accurate and wonder if MBNA got them wrong somehow.

JuicyJesus

jamesd wrote: »

From the description it reads as though you may have paid the correct early settlement figure and then they instead treated it as an advance payment.

From the way I read it, they assumed that the early settlement figure would be £3300 and paid that instead of the actual figure.

What had happened was March 2008 I paid off the loan with £3300 which I thought was the settlement figure but I discovered in March 2011 that I paid it short by £452 as the figure was actually £3752.

jamesd

Entirely possible that it was the loan balance rather than the settlement figure that was paid. But maybe not. "Maybe I was given the wrong settlement figure?"

There's also the issue of partial settlement. Such a large amount was clearly intended to be settlement of some sort, not just advance payment. But MBNA seems to have treated it as advance payment, "The loan amount (£120) per month was paid out of the £3300".

Either of those seems like potential grounds for a complaint, depending on the exact facts.

That won't necessarily get the default removed but could well reduce its value and be helpful in that way.

More fact finding needed to know how to proceed. SAR time. If a wrong settlement figure was given that's something that should result in complete removal of the default because MBNA is responsible for it happening.

Daedalus

JuicyJesus wrote: »

From the way I read it, they assumed that the early settlement figure would be £3300 and paid that instead of the actual figure.

But people don't really do that do they. People ring up, ask how much to settle early, given a figure, pay that figure, and assume it is all done, no contact for months reinforces this.

To me, it is more likely that MBNA has screwed up.

John1993_2

Daedalus wrote: »

But people don't really do that do they. People ring up, ask how much to settle early, given a figure, pay that figure, and assume it is all done, no contact for months reinforces this.

Well no, a statement showing that the account is settled would reinforce it. No contact suggests the exact opposite, that it's not settled.