The cycle of overdraft charges

Carrie_bie

I'm asking for some advice on behalf of a friend, so I apologise in advance if I'm not able to give really detailed specfics.

I've been helping her organise her finances, but there is one thing I'm not sure how best to tackle. She has an impressive ability to bury her head in the sand about financial matters, and it very capable of not opening years and years worth of post.

Back in early 2014 when we started on this journey, she came to visit me with a couple of carrier bags full of letters.

She has an old Barclays account from when she was young that she stopped using about 18 months before, and has her ex-boyfriend's parent's address linked to the account. As far as we know, this is the only one of her financial accounts that is linked to this particular address. Her ex's parents used to give her the letters whilst they were still together, although she didn't open them (obviously:o), and since they broke up in 2014, she hasn't seen any letters.

The problem is that before she decided to stop using this bank account (around 2012), she became overdrawn by about £150 into an unauthorised overdraft. When we finally opened the old post in 2014, we found that this Barclays had charged her for going overdrawn unauthorised, and then had charged her again as the charge had made her even more overdrawn. After that, every month they had repeated this process taking the initial debt from about £150 up to around £1500 to the date of the last letter we had.

At the time we urged her to contact them and stop it growing, but I think it was too much for her at the time and she knew she would struggle to pay it off alongside everything else we were sorting out. She was insistant that if they don't hear from you for 8 years they will wipe the debt.

Now 3 years later, she's trying to sort out all her finances as she wants to be less stressed and "go legit", but still has this Barclays account hanging over her. She has a credit file which isn't bad, but she hasn't included her ex's parent's as a place that she is linked to. She was recently found by a ten year old mobile phone debt (~£800) after she financially linked herself with her mum's current address. Her mum is also terrible at dealing with financial matters, and also never opens her post.

My first thought is to contact Barclays and enquire, then see if they will reduce/remove the charges (which must be massssssive by now:eek:), but I don't want to advise this if actually ignoring it would be a better option. The last thing she wants is to have baliffs/CCJs appearing for this debt - though she probably wouldn't know as she never opens her post....

Any thoughts on our next steps are much appreciated....

DebtFreeDuo

I can't advise anything on whether it's best to ignore but I know you can claim unfair bank charges so it may be worth looking in to that and then contacting Barclays? I'm sure someone who will be a lot more help will be along shortly.

StopIt

DebtFreeDuo wrote: »

I can't advise anything on whether it's best to ignore but I know you can claim unfair bank charges so it may be worth looking in to that and then contacting Barclays? I'm sure someone who will be a lot more help will be along shortly.

Not true.


The banks won the unfair banking charges lawsuit and now will only suspend interest and charges upon cases of financial hardship.


Is the debt still with Barclays anyway? Tell your friend to check all 3 credit files (Clearscore, Noddle and the MSE Credit Club cover all 3 and are free) and make sure the debt hasn't been sold on.


If it hasn't and is still accruing charges, you can appeal for them to default the account, stop all interest and set up a payment plan.


What she says isn't 100% wrong. After 6 years of non payment or written admission of a debt, it becomes statute barred and cannot be successfully enforced at court AS LONG AS IT IS DEFENDED. You can still receive a CCJ for a statute barred debt, which would need to be set aside, so it is never a good idea to ignore debts if a DCA starts threatening litigation at any time.

DebtFreeDuo

I stand corrected, I wasn't aware that there had been a change just that I had some unfair charges refunded a little while back. Thank you for correcting me and providing more helpful advice.

sourcrates

Is your friend been actively chased for these debts ?

Do they have her current address ?

No one wipes debt just like that, the limitations act has no bearing on this as it’s not yet been 6 years.

As said above, check credit files first, see what’s going on there.

sourcrates

DebtFreeDuo wrote: »

I stand corrected, I wasn't aware that there had been a change just that I had some unfair charges refunded a little while back. Thank you for correcting me and providing more helpful advice.

Banks will, if asked, wipe charges accrued unintentionally, on at least one occasion per year, as a matter of goodwill.

So you are correct in that respect, it’s just the mainstream reclaiming of charges (unless your in financial hardship) has now ended due to them winning there case in the court of appeal.

That doesn’t mean to say that it’s not worth trying to get a refund, just be nice, polite, and sometimes it’s reciprocated.

Carrie_bie

Thanks everyone, I have sent her this convo so she has seen all your advice, and has duly noted that no one advised to continue ignoring it...

She's going to set up all three free credit file sites - she already has the MSE credit club. I will report back on what we find.

She pretty sure they don't have her current address, but I guess it's possible they could derive the link. She said she opened that account when she was under 18, and thinks she stopped using it around 2005, not in 2012 as I originally thought.

FTBuyerGlasgow

I 2nd what Sourcrates says, there's a few Credit Agencys you can get free access to your credit report and a monthly Report, all free of charge.

Not least of which is MSE's Credit Club, I'm signed up to that and Noddle, everything is laid bare, financial accounts, linked addresses etc.

Carrie_bie

sourcrates wrote: »

Is your friend been actively chased for these debts ?

Do they have her current address ?

No one wipes debt just like that, the limitations act has no bearing on this as it’s not yet been 6 years.

As said above, check credit files first, see what’s going on there.

So, we've checked the three free credit referencing agencies, and none of them reference the address that this account is linked to (her ex's parents' house). Her address history list on all three only goes back as far as 2010.

The dilema we have now is whether to add another old address, or whether to just leave it well alone.... could the connection be figured out another way and then suddenly these old addresses will appear on her report?

sourcrates

Carrie_bie wrote: »

So, we've checked the three free credit referencing agencies, and none of them reference the address that this account is linked to (her ex's parents' house). Her address history list on all three only goes back as far as 2010.

The dilema we have now is whether to add another old address, or whether to just leave it well alone.... could the connection be figured out another way and then suddenly these old addresses will appear on her report?

One more thing i would do, i am assuming that none of her credit files shows a CCJ for this, or any other debt ?

If that's the case, then i would check :

https://www.trustonline.org.uk/search-yourself

Just to see if one has been registered under her name at an old address she no longer lives at.

If she updates her old addresses on her credit files its more than likely to trigger a creditor reaction, at the moment it looks as though she is "off the grid" so to speak, its up to her now how to proceed with this.