Declined current account - odd reason!

Financially_Backwards

Hi,

I've been declined opening a current account with First Direct. Having spoken to them, they disagree that I earn £2000/month, as their "system" says I have zero income. I challenged them on the phone and they say they cannot do anything to help me, and that I have to wait 6 months before re-applying. They say there is no appeals process.

Where do I stand, what are my rights? There's a clear issue in the system somewhere, and this effects:

a) my savings strategy
b) my chances of a mortgage with First Direct in a years' time

molerat

You have no "right" to open an account with them. You do though have the right that they hold correct information about you. They use credit reference agencies for this information so it may be worth you asking where they got this information from and go from there.

eskbanker

Is it possible you miskeyed something on the application form or are they definitely saying that you stated £2K/month and they disagree? Have you made other applications for accounts or other credit products specifying significantly different earnings? What do your credit files look like?

In terms of your rights, very little, they can choose not to do business with you if they wish, although if they make this decision based on flawed information then I can see why you might be concerned.

You could do a Subject Access Request under the Data Protection Act if you want to find out more about the data on which they made their decision but even if it's wrong, they're not under any obligation to let you open an account with them so you may need to reconsider your plans....

Financially_Backwards

Is it possible you miskeyed something on the application form or are they definitely saying that you stated £2K/month and they disagree?

All the details I gave were correct when they read them back to me. They disagree, they say I earn zero,

Have you made other applications for accounts or other credit products specifying significantly different earnings?

This is the only product I've applied for in the last 6 months.

What do your credit files look like?

Equifax gives me "fair", 390ish. I can't remember Experians score, but it's not worse than fair.

My main point is, how do I tackle them on where they got their incorrect data, do they have to share their sources (they say no, its HSBC commercial software that is confidential), and do I have the right to challenge them to obtain correct data?

GingerBob_3

"Their system" doesn't know your income, other than what you tell them, or have told previous institutions. CRAs haven't yet been able to persuade the regulators that they should hold salary data on their files about you. It seems a bit of an odd assertion on the part of FD.

Norscbu

Sounds to me like they were fobbing you off, there's a good chance that the person you spoke to simply didnt know the actual reason you didnt qualify.

Perhaps your history simply isnt good enough for their criteria for whatever reason, so make sure everything is in order and perhaps think about applying without an overdraft, this will make things a lot easier initially.

Financially_Backwards

Norscbu wrote: »

Sounds to me like they were fobbing you off, there's a good chance that the person you spoke to simply didnt know the actual reason you didnt qualify.

Perhaps your history simply isnt good enough for their criteria for whatever reason, so make sure everything is in order and perhaps think about applying without an overdraft, this will make things a lot easier initially.

There's an idea, obviously the credit check is aimed towards the overdraft, I assume that they try to match your current overdraft when doing a current account switch? I've never touched it so why not. But I have to wait 6 months now... so I'm hoping there's a way to fight back before then.

eskbanker

Financially_Backwards wrote: »

My main point is, how do I tackle them on where they got their incorrect data, do they have to share their sources (they say no, its HSBC commercial software that is confidential), and do I have the right to challenge them to obtain correct data?

As per my previous post, file a SAR asking for all data they hold about you and how they obtained it. Under DPA (fourth principle), any data they hold must be accurate so if what they have isn't accurate then you should ask them to correct it.

Financially_Backwards wrote: »

There's an idea, obviously the credit check is aimed towards the overdraft, I assume that they try to match your current overdraft when doing a current account switch? I've never touched it so why not. But I have to wait 6 months now... so I'm hoping there's a way to fight back before then.

No, there isn't any overdraft matching, they'll just offer you what they consider appropriate according to their policies, regardless of what you currently have. Even if you apply for the account but without an overdraft they'll still credit-check you....

Marchitiello

Have you been on benefits recently? I know someone that was made redundant and after the first 6 months searching for jobs she finally run out of money and had to ask for some sort of benefits ( not sure which one) but she mentioned to me once that she wished she could have avoided as it was reported to the credit agency and she end up having issues with credit applications. Apologies as this is purely hearsay and never questioned the details, but I believe to be accurate

meer53

The income they hold is only what you will have given them, either online or over the phone, call them again and ask the question again, it sounds as though you misunderstood what they said. It's unusual for a bank to be so specific about why they declined you.

colsten

Financially_Backwards wrote: »

this effects:

a) my savings strategy
b) my chances of a mortgage with First Direct in a years' time

If your savings strategy hinges on First Direct, you should probably review your savings strategy.

The only worthwhile account they have for savers is their 5% regular saver which is limited to £300/mth. Any money you hold in the pre-req current account earns nothing. If you need any withdrawal before maturity, the interest rate plummets to something 0.x%.

If you go to Nationwide instead, you get a 5% regular saver account which takes £500 a month, a current account paying 5% for a year on up to £2,500, and you can make withdrawals from the regular saver if you need to without losing the interest rate. The interest rate on the regular saver is variable though, so there is a small risk they may drop the rate during the year. You'd still have your 5% guaranteed on the current account though. Plus you can make up to £1,000 from referral offers at Nationwide.

That's just one example of a way better savings vehicle than First Direct offers. Other banks are available.

As to a mortgage in a year's time: why would you decide today who you want a mortgage with in a year's time? Why do you assume that you have better chances to get a mortgage if you have a current and a savings account?

If I were you, I'd go for the best possible savings rate(s) now, and then for the best possible mortgage in a year's time.