Incorrectly Added Default?

Hi - hoping for some advice! Sorry in advance for the long post - wanted to add as much details as possible.

In August 2016 I got a new job (which I got paid on the last day of the month as opposed to the 25th with my previous company) and also moved property - I updated my details and direct debits with Nationwide in store. I am at fault as I didn't regularly check my bank account so did not notice that they hadn't updated my loan payment date (also with Nationwide) and they were still trying to take payment on my old salary date. In April and May there was not enough funds in the account. I had had this loan since the beginning of 2014 and had never missed a payment previously and had a perfect credit score. Unfortunately they had not only failed to update the payment date but also my address details (for the loan only - all other products I have with Nationwide were updated) so I did not receive any communications regarding their attempts.
After 2 months in arrears Nationwide registered a default on my account. I was only notified of this when 2 months worth of loan payments was taken from my savings account and I called up to ask why this had happened. I was advised that a default was put on my account and they arranged a new payment plan for me (which was identical to the previous regular payments).
I made a complaint to both Nationwide who said they were not at fault and then onto the Financial Ombudsman (FOS) about the fact I was not notified (by phone or letter) when I had updated the contact details - both Nationwide and the FOS said this was my fault due to the fact I only updated with Nationwide Current Account not Nationwide loan team (I just assumed Nationwide was Nationwide and the cashier never told me otherwise).
I continued with my regular payments and paid the loan in full as per the original agreements in March 2018.
Upon attempting to remortgage in the last few weeks I have struggled to get any reasonable rates on my mortgage deal because of the default they applied and upon speaking to a Mortgage and financial adviser (as they have reviewed my credit report) they have said the default looks to be unfairly recorded and extremely harsh considering firstly it was only 2 months in arrears and defaults are applied between 3-6 months – (according to the ICO “As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are a total of 6 months in arrears.“ I was only in arrears for 2 months in total), and secondly because of my previous relationship with Nationwide – no previous missed payments and the loan being up to date, being a current account customer since I was 15 – plus that as soon as I was made aware of the issue personally, I paid what I owed and continued all regular payments which is also falls under “Reasons why default should not be filed: If jointly with the lender an agreement is reached for an arrangement and you keep to the terms of that arrangement”.

I have gone back to Nationwide to say I would like to discuss why it was even added and they have advised they will not consider any complaints and I need to refer to the FOS. I spoke to the FOS and they said they have already investigated this (although this was related to why I was not contacted not why it was put on there at all) and that if I was unhappy I should have raised that within 21 days - however I was under the impression that if a bank were to add such a detrimental and serious thing to an account that they would have done it correctly...

I feel really stuck and unsure of what to do next or how I can get this removed - all the literature I have read online indicates this has been added incorrectly but neither Nationwide or the FOS are willing to review. Also my mortgage deal is considerably higher and I have 0% credit cards which have ended and now have really high interest rates but because of the default I cannot get another balance transfer or even a loan to consolidate so I'm now struggling with the repayments which is frustrating because I genuinely feel I do not deserve this considering all of the attempts I made.
Has anyone had experience of removing a default, or is there any reason why it's not incorrectly applied or any recommendations for next steps? I've been into Nationwide, sent a complaint letter, phoned up and spoken to the FOS - I fear my only next alternative is legal action?


  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K Posts
    Tenth Anniversary Combo Breaker
    Hi EPB and welcome to MSE,

    Unfortunately, if you have already raised the complaint and taken it to the Ombudsman, your options will be more limited. You can try and speak to the Information Commissioner's Office to see if there is anything else they can recommend but ultimately, only incorrect data can be removed from your credit file and I am not sure this will be classed as incorrect (because the payments were in arrears).

    If there is no other complaint route available (through the ICO) then I am afraid legal action would be your only other option, however, you need to consider this very carefully. This would likely cost you money and if you are unsuccessful you could incur legal costs of the other side as well.

    Remember that the default will come off after 6 years, and the older the information is on your credit file the less impact it should have. If you are struggling with your debts, you could post a SOA in the DFW board for more advice.

    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • [Deleted User][Deleted User] Forumite
    0 Posts
    Updating your current account with Nationwide (o any other bank for that matter) doesn't also mean you update things like loans, credit cards, mortgages etc.
    They are separate, albeit from the same lender.

    1 default won't stop you getting "decent" rates - speak to a mortgage broker.

    And ignore the fictional score/rating you see on the CRA websites
  • edited 31 July 2018 at 12:34PM
    SystemSystem Forumite, Community Admin
    177.9K Posts
    10,000 Posts Name Dropper
    Community Admin
    edited 31 July 2018 at 12:34PM
    I can't understand how not updating the loan payment date because of the new pay date would have any effect. The money would still be there and you shouldn't be living so hand to mouth or keeping so little in the account that a loan repayment coming out out of sync with pay day makes a difference and at best it would mean just one missed payment because the money that hadn't been taken would be there from the first missed payment to pay subsequent ones out of sync. The only way it would lead to more than one month's missed payments is if you spent the money.

    That suggests to me that one of the reasons you're not getting a mortgage is actually due to the hand to mouth state of your finances or you're just leaving enough to cover monthly bills in that account which is madness because it leads to problems like this.

    Nationwide are correct, it wasn't their fault. If your finances aren't on the knife edge or you maintain the account balance at a reasonable level then a payment going out out of sync with pay dates doesn't cause any issue because there's enough of a balance to cover it.
  • EPBEPB Forumite
    2 Posts
    Thanks for all your comments so far.
    Just to re-iterate, prior to this I had a perfect credit score. I move the majority of my money into savings accounts after all my bills have come out to avoid frivolous spending - appreciate this might not be what everyone does but it helps me. I get paid varied amounts each month so it wasn't a case that I had a glaringly obvious payment missing and I had the funds to pay as soon as I realised this was the case. My question isn't about my spending habits and I'm certainly not living on a knife edge.
    My research is mostly from a website which is referred to on the ICO website ( Principles for the reporting of arrears, arrangements and defaults at credit reference agencies.)
    Under point 4 as it was only 2 months not 3 and I received no notification and who my next point of contact should be to get this resolved.
    Thanks again for anyone taking the time to read! :)
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