DD came out from a closed account and caused a default

Electra12

Hi everyone

I'm very new to this so please be nice

basically my partner had a Barclays current account which was overdrawn. He decided to settle the overdraft and asked the bank (over the phone) to close it. As far as he was aware this bank account was now settled and no longer of any concern to him.

Anyway, fast forward on and he received a letter from barclays to say that a direct debit had come out of this account for £26 which meant that he had defaulted. He then accrued £101 in charges on top.

My question is this... would we have any grounds to appeal this default on the account? It was 21 months ago since it was settled but it is causing us so many problems. We have been saving for a deposit on a property for along time and now that we have finally reached the 10% that is required, no mortgage companies will lend to us due to this default!

Im literally at my whits end and need some advice. I don't earn enough to put the mortgage in my name alone and we don't have the savings for an 85% LTV, which is what we have been advised to strive for. Another 5% means 10,000 more deposit for a modest flat in London!

Please help!!!

thanks

[Deleted User]

If you can prove that the DD should not have been taken, then you would have a case.

Do you have evidence of you cancelling the DD with the company concerned?

Electra12

Im not sure
the trouble is, its so long ago that it happened, he has thrown away any relating correspondence.
Surely though, the bank should have advised him of the direct debit before they closed the account?

[Deleted User]

They wouldn't have known it was still live. DDs are 'pulled' by the other company, whereas standing orders are 'pushed' by your bank.

Electra12

ok so it would have been his responsibility?

The default is actually from barclays themselves which confuses me more. I guess the first step would be to request historic statements? I just don't know if there is anything that we can do to rectify this.

Or would mortgage companies be more likely to lend to us once the defaulted account has passed a 24 month period?

[Deleted User]

Surely, if the account was still open, it would've resulted in either an unauthorised overdraft, or a returned DD, rather than a Default :huh:

Thrugelmir

Closing an account fully would have required written authorisation to action.

antrobus

kimmyb1986 wrote: »

....

basically my partner had a Barclays current account which was overdrawn. He decided to settle the overdraft and asked the bank (over the phone) to close it. As far as he was aware this bank account was now settled and no longer of any concern to him.

Anyway, fast forward on and he received a letter from barclays to say that a direct debit had come out of this account for £26 which meant that he had defaulted. He then accrued £101 in charges on top.

My question is this... would we have any grounds to appeal this default on the account? It was 21 months ago since it was settled but it is causing us so many problems. ...

If the account was closed 21 months ago, then I can't see how a direct debit could trigger a default. DD instructions go dormant after 13 months, and need to be reconfirmed.

http://www.directdebit.co.uk/SiteCollectionDocuments/DD_guarantee_leaflet.pdf

Electra12

sorry, I didnt explain is very well. The default was satisfied 21 months ago.

redcard

kimmyb1986 wrote: »

sorry, I didnt explain is very well. The default was satisfied 21 months ago.

You didn't explain how an unauthorised overdraft turned into a default.

chrisni1986

im kinda in the same boat as you, paid unauth od charges and was told the account was up to date, partly my own fault i wasnt checking statements afterwards as i wasnt using the account, next thing i know a default for more charges which were still outstanding.. i tried to appeal but to no joy and because of this im stuck with mine until sept 2015, hope you get it sorted but prepare yourself for the fact that it may be with you for a while