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Sainsburys Bank global error reactivating old debt file accounts and ruing credit rating

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I applied for a mortgage this morning and when my credit check was ran my application was refused. When I searched my Experian account an old Sainsburys bank credit card was showing that I had missed over three months payments in 2018 and was flagging me £60 in arrears.

I has closed this card account with no debt in 2012!!!

An hour later in the phone and Sainsbury's bank finally confirmed this is a known widespread error caused when in June they had changed their computer systems over to a new system and had reactivated old accounts in error. The accounts affected are those ones that had previously been held in some form of debt plan (I was severely ill and had to finish work but paid off all my credit via stepwise). This must be going to affect hundreds/thousands of people?

They apologised and said they were sending a note to my credit file to correct it and had reclosed the account removing the amount "owed".



However


1) I've had my mortgage refused.
2) my builder is now saying he will have to take different clients.
3) Why on earth do they still have my records on file for a card that was fully paid up in 2012 particularly in a system that seemingly was capable of reactivating those records in error? Surely this contravenes GDPR regulations?
4) If they knew about this why hadn't they been proactive in correcting this and informing me? I have had no correspondence from at all.
5) How many other people are aware of this and will be affected? Or worse not aware and are being affected (this was June so peoples credit records will only just be going into 3 + months arrears now.
6)mud sticks and I'm worried my credit file is permanently affected.

This is DEFINITELY an issue Martin and his team need to be made aware of.
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Comments

  • fwor
    fwor Posts: 6,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I agree that a mistake has obviously been made, and you're right to have a go at them (and IMO to expect some form of goodwill payment from them for the inconvenience and temporary harm to your credit history) but...
    kj35 wrote: »
    Surely this contravenes GDPR regulations?

    Other than the error in their system (obviously no legislation or regulation can realistically mandate that mistakes must never happen), I don't think this is a GDPR issue, for the following reasons:
    1. They had good reason to be storing that data (obviously you would have given them consent to store it during the course of your use of the account, and they needed the data to manage your account),
    2. They can easily argue that they should still have data from as far back as 2012 (for audit purposes, or if there was a need to investigate alleged fraud)
    3. Your data was not disclosed to anyone other than you.
    Having said that, I hope that the bank quickly correct any errors that have propagated to third parties, and that they make a goodwill offer that at least makes you feel a bit better about the mistake.
  • To answer your points

    1. Once your file is updated apply again

    2. Find another builder

    3. Nothing to do with GDPR. Financial records are expempt to a degree

    4. They obviously didn’t know who it was and wasn’t affecting

    5. People will find out when they check their credit files

    6. Your credit file will be fixed when the account is removed again
  • kj35
    kj35 Posts: 19 Forumite
    This is an atrocious mismanagement of consumer data. And it has been covered up by a large financial institution. Thank you both for you help with GDPR though.
  • It’s not atrocious.

    Admin/IT mistakes happen from time to time
  • kj35
    kj35 Posts: 19 Forumite
    when you have a mortgage refused because a bank has knowingly reinstated not just yours but lots of customers archived and fully paid off accounts. Then without any correspondence at all ensure your credit record is flagged and then - even though they know they've done it leave it to those consumers to find out for themselves - I consider that atrocious mismanagement. I think I'm the first to find this - there will be hundreds in the next few months.
  • OP - did the mortgage company actually tell you that the Sainsbury's account was the reason why you were refused and have you got this in writing?

    Whilst it seems highly likely, it might have been refused for another reason.

    Have you spoken to the mortgage company to see if they'll reconsider their decision in the light of your discoveries? Presumably Sainsburys are sending you something in writing to confirm that it's a complete error from their end?
  • kj35
    kj35 Posts: 19 Forumite
    yes they said that is exactly the only reason. My credit has been clear now for a long time and yes the bank said this card flagging is the only reason. They are reconsidering. Have asked Sainsburys to send me a letter explaining the situation as it will take 30 - 90 days for my credit file to correct. My concern is that people who perhaps had bad credit once will suddenly find themselves in the same position again and not know why.
  • Did the mortgage lender specifically quote “Sainsbury’s Bank“ to you?

    If so that’s impossible as they cannot see the name of lenders when they run a credit check against you.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    kj35 wrote: »
    yes they said that is exactly the only reason.

    Lenders normally only refer back to your credit files, not make specific comment.
  • kj35
    kj35 Posts: 19 Forumite
    edited 1 November 2018 at 1:39PM
    they have accidentally reopened ALL OLD SETTLED ACCOUNTS that had previously been in a debt plan. they have admitted their error but I am still not able to get a mortgage as my credit file now shows six months arrears. This is going to be (currently silently) affecting hundreds of people.
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