Default applied with no warning - help needed!!

Sparrowlegs

Hi,

I stumbled across the forum whilst trying to find out a bit more about an extremely stressful situation that quite literally landed on my doorstep (in the form of a debt collection letter) just before Xmas. Apologies in advance for the essay, and sorry if this has been posted to the wrong section.......

The debt apparently relates to an outstanding balance of £479.29 on a Santander account that I had actually requested to be closed in October 2011. It was a joint account held my myself and my ex partner with the then Alliance and Leicester, and when we split in Sept 2011, I cancelled all DDs, cut up our debit cards and requested that the zero balance account be closed. I then moved back to my parents house in my home town in October 2011, and it's where I've been ever since. It being over 3 years ago, I don't recall whether I left a forwarding address.

This first I heard about any debt was when I received a letter from Santander on 20/11/14, telling me that as of 15/10/14, my debt had been sold to Hoist Portfolio Holding 2 Limited, and that I was to deal with Robinson Way Limited to arrange immediate repayment. Obviously this came as a huge shock to say the very least. I called Robinson Way immediately on receipt of the letter to explain the situation, and that I wanted to dispute the claim until I knew exactly what it related to. They advised me that a hold would be placed on the debt until full details of the charges had been obtained from Hoist. This was on 24/11/14, and I'm still yet to receive any information (despite a further 3 phone calls since then).

To try and speed things up a bit I called Santander to speak to somebody in their Collections dept to see if they could tell me what the transactions relate to.....apparently there were no transactions or debits on the account carried out by either of us (yeah, because neither of us were using it as we thought it was closed like we had asked it to be, duh!!) but that we'd been charged a £5 'Underfunding Fee' in April 2012, which had taken the account into overdraft, and because of this, they had then added a £45 'Unarranged Order Fee' on top, and continued to apply both of these charges, monthly, until December 2012.

Apparently, the bank had arranged for a company to try and trace me, which they supposedly did in February 2013, but I received no letters or telephone calls from them or any company whatsoever about the debt. I checked my credit report through Experian at the weekend, and it has pretty well been decimated by the default slapped on there by Hoist. I haven't applied for any credit or a mortgage in the past 3 years, have one credit card with a very low balance which I pay off regularly and have an otherwise spotless credit history, therefore hadn't had any reason to check my report during this time. After worrying myself silly about it all weekend I decided that I'd call and pay it off this morning, in the hope that I could continue to contest the charges and lodge a formal complaint, whilst in the background, the default would disappear from my credit report once Hoist update their records in 1-2 months time. However, after looking around on here other financial forums about the default staying on there for 6 years regardless of whether the debt is settled or not, I'm finding it all even more upsetting as I'm now out of pocket and it looks like my credit rating is in tatters regardless.

I sent letters to Santander, Hoist and Robinson Way today asking for a full list of transactions on the account from Jan 11, along with all related correspondence sent to me since that date. Once I've got this info, I plan to lodge a formal complaint and potentially escalate it to the Financial Ombudsman.

I'm looking for some advice or guidance from anybody out there who's had something similar happen to them. Do I have a leg to stand on with regards to disputing this? Have I shot myself in the foot by paying it, when the default will sit on my credit report for 4 1/2 more years regardless? Have Hoist done something illegal by applying the default with no prior warning or notification? Under what circumstances could the default be removed, and how can I go about it? The bank’s unfair and unjust actions in my opinion, have ruined my credit rating and without wanting to sound melodramatic, have ruined my future plans – and will probably bar me from getting a mortgage for a further 6 years.

It seems so unfair that I now have to suffer the consequences of an error made by A&L that could potentially have a detrimental impact on my financial future. All for a sum made up entirely of bank charges that I've had no notification of or chance to respond to. Hugely worried and stressed by it all to say the least.

Thanks in advance for any help.

forgotmyname

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Quimoi

Treating bank imposed charges as unauthorised borrowing and 'charges on charges' is unfair under BCOBS.

Do you have any proof that you requested the account be closed?

I'd suggest writing a letter of formal complaint to Santander pointing out their non-compliance with BCOBS and ICO guidance with respect to filing defaults.

You should be able to get the default and adverse data removed, the main question is how long and difficult it will be...

Sparrowlegs

Unfortunately I don't have any proof - I requested it to be closed in branch and don't have a receipt (normally I'm quite OCD about keeping receipts and paperwork but in this instance, I naively assumed the cashier would just have done their job).

I fired off a SAR letter to Santander yesterday requesting a list of all transactions on the account since Sept 11, the paper trail leading up to the placing of the default and any other correspondence relating to this supposed debt.

Thought I'd be better off finding out exactly what the balance was on the dormant account before they started applying the charges, and what the total of the 'Underfunding' and 'Unarranged Order' charges come to, THEN send in the formal complaint letter - I want to be able to substantiate my claim which I don't feel I can confidently do without statements to back me up (will also refer to BCOBS non-compliance and ICO unfair practices with regards to the charges and default notice).

Basically I want to make sure I have the weight of evidence behind me before I go steaming in.

Think my angle of attack will have to be unfair charges and lack of default notice, as it'll be my word vs theirs re closure of the account.

Spoke to the FOS who've lodged a complaint to Santander on my behalf - I called for advice and they offered, and I figured it couldn't do any harm (it can't, can it?)

Also reported it to Experian who'll investigate the default with Hoist, and in the meantime add a dispute statement pending a response. So feel like I've achieved one tiny positive.

Quimoi

Sounds like you are going the right way about it

Not the end of the world if you can't prove the account closure request but you may find something to that effect in the SAR response (maybe request a copy of the account diary from their system if not already included).

Even if there is no evidence of the closure they are still in breach of BCOBS so you will have a good argument if the statements support what you think and all/most of the overdraft is charges.

Sparrowlegs

That's comforting to know. And thank you for the advice, it is very much appreciated