Default removal due to circumstances

cmpxoxo

New to this forum but absolutely desperate for advice.

In 2018 I began suffering with mental health issues and long story short, as a result I was not in very good control of my finances. I had a current account with HSBC which became over drawn as my poor health also led to me losing my job. I was in touch with HSBCs specialist support team who were made aware of the issues I was having and attempted to set up a repayment plan. I know that what happened next is fully my fault but I just wasn't of sound mind at the time so I failed to keep up with the repayments. The account was defaulted in Feb 2019 with £357 outstanding. HSBC have since stated that they sent me a final demand letter prior to this which I do not recall receiving, however my head was all over the place at the time.

So... health wise I got the help I needed and am absolutely fine now. Back in full time employment, everything is good. My partner and I recently applied for a mortgage which was declined due to this default on my file. In all honesty I had completely forgot about it. So I got some financial advice, I was told that if I pay back the £357 and contact the specialist support team then due to the circumstances surrounding the default, it could be removed from my credit file.

HSBC disagree. I first contacted them in branch who gave me a number to call and said it could be removed after full payment - not settled - removed. I called the number, they passed me to someone else who said that they could change it to settled but they couldnt take it off my file as it is accurate data and it would be an unfair representation of how I manage my finances if it were to be removed. I argued that the lenders code states that issues regarding mental health should not hinder someones ability to receive credit in future as this may be a breach of the disability discrimination act. They then passed me to someone else who just straight up said they couldnt remove it anyway and it cant be done.

I then received an email from customer service reiterating this by stating 'the information recorded is an accurate reflection of your account conduct. To alter this would call into question our integrity'.

My argument is that I was not of sound mental capacity at this time and therefore it feels unjust to be being punished for something that happened at a time when I was mentally unwell.

I have appealed to the financial ombudsman but I know it could take weeks to hear back, I was wondering if there is anything I can do in the mean time to try and resolve this or if I ever have a leg to stand on.

My partner and I have seen a property we wish to make an offer on and santander have confirmed that they can go through with the application if this default is removed.

I'm absolutely desperate at this point!

D_M_E

Have you considered consulting a whole of market broker for your mortgage?

You never know, they could point you to a mortgage for people in your circumstances.

Thrugelmir

cmpxoxo said:

I then received an email from customer service reiterating this by stating 'the information recorded is an accurate reflection of your account conduct. To alter this would call into question our integrity'.

Not to do so would make the sharing of data between financial organisations totally worthless. Defeats the whole object of CRA's. By reducing bad debt it makes borrowing cheaper for everyone. 
Little point in complaining. As in the terms and conditions you agreed to when opening the account you agreed to your data being reported. 

sambaird

The simple answer is no, there is nothing further that you can do now that the case is in the hands of the Ombudsman - this is the final stage of the complaints process (bar starting a court action).

I presume that you have submitted independent documentary evidence of your mental health state from a doctor, treatment received etc? It’s simply not enough to simply say ‘I have mental health issues’ in cases such as these - it needs to be backed up with tangible evidence for any chance of success.

CMB93

Afraid I can’t help with getting the default removed, however I managed to get a mortgage in 2018 with 6 defaults on my account. 

All need to be settled as a minimum. So pay what your due and it will make a difference. 

I then went to a mortgage broker, which is free to use as they get payment from the lender on completion. 

The broker knows the market and what each lender would and wouldn’t accept. We were then given the option of two lenders who would accept based on my credit history. 

If you go straight to the lender yourself, it will take more time and their mortgage advisers are less forthcoming with information/don’t actually know! 

In summary - make sure it’s settled and seek advise from someone who knows the market. They’ll be able to tell you what your options are.