PPI defaults impacting credit score

bmullard

Hi all, I wonder if anyone can advise me?

As a student in the 2000's I banked with Lloyds who hammered me for all kinds of massive unauthorised overdraft fees, thinking that I've probably missed the boat on those but that's an aside...

Partly as a consequence of the above fees, I left uni with a large overdraft. When I started working, someone at Lloyds convinced me that rather than have an overdraft, I should take out a loan to clear the balance of the overdraft. Even though this was clearly a stupid thing to do, they presented it as my only choice as I was above my overdraft limit.

So, I took out a loan for around £2000 with PPI insurance (which they obviously advised me I should take out). I subsequently managed to lose my job after only paying back around £200 of the loan (I no longer have the paperwork).

On losing my job, my bank balance was in credit, not much, but in credit, yet I still owed most of the balance of the loan. I phoned to try to invoke the PPI, only to be told that as I lost my job due to misconduct (Timekeeping and attendance), the PPI was invalid.

The bank then proceeded to keep taking payments from the loan into an unauthorised overdraft, incurring further fees. They did this up to a balance of around £1750 DR and then evidently sold the debt to Lowell, plus the total of the original loan (Around £2200 apparently).

Lowell are now chasing me for both of the above sums. I have explained the situation to them, they tell me they have asked Lloyds who have told them that as the sum relates to a bank account, PPI transgressions aren't relevant.

Both of these items are on my credit file which I am currently trying to improve.

Can anyone please advise me on the best course of action?

Thanks in advance.

[Deleted User]

I'd try to settle the debt as quickly as possible. A settled default will look better on your file than an unsettled one.

The_Boss

Yeah - your debt is on your current account, not from the loan.

I don't know anything about PPI so no idea if it's worth or even if you can pursue Lloyds. Surely if you lost your job after a month you called have called and cancelled it?

The impact on your credit score is zero. This is because you do not have a credit score as credit scores do not exist.

happy_bunny_2

Post on the PPI reclaim board about that point.

Lloyds should not have kept taking the payment for the loan like that and putting you in an unauthorised OD.

Complain, in writing, stating that they were abusing the fact that both accounts with them to maximise profit from unauthorised OD charges.

If they refuse, refer to FOS.

Do Lowell own the accounts? If so, send the complaint to them.

When was the last time you acknowledged the debt in writing or laud? Could it be statute barred?

If not, I would be getting a CCA request in for that loan.

What are the default dates? Are they recent or are dated within 6 months of things happening.

The_Boss

happy_bunny wrote: »

Post on the PPI reclaim board about that point.

Lloyds should not have kept taking the payment for the loan like that and putting you in an unauthorised OD.

Complain, in writing, stating that they were abusing the fact that both accounts with them to maximise profit from unauthorised OD charges.

If they refuse, refer to FOS.

Not sure there's an issue with Lloyds taking the money for the loan that they were owed, is there? It seems that the OP could have defaulted on the loan rather than tread water and rely on the overdraft picking it up instead.

happy_bunny_2

It was an unauthorised overdraft of Lloyds that Lloyds let run up.

I doubt any other bank would have let that payment go out for so long like that.

RBS tried to tell my OH that she couldn't cancel the RBS loan DD on her current account with them. They lost that one...

AppleDap

My understanding is that Lloyds can't offset on an account taking it from I credit into an unauthorised overdraft. Complaint letters need to be sent and if no joy, then go to the Fos.