Default for £60 CC Overspend without warning

MattMattMattUK

Marleyuk said:

It’s £60... it’s linked to one payment. 

It’s an exceptionally easy oversight to have made, with the consequences significantly outweighing the crime.

Is it an exceptionally easy oversight to have made? I do not really think so, as most people do not make it. You have also mentioned you are in the middle of a mortgage application, a period when you are specifically advised to avoid using credit cards and to monitor everything incredibly tightly to avoid risk of making any mistakes, one should certainly not be getting anywhere near to the limits on credit cards during the application process.

Marleyuk said:

With no notification or grace period, the banks duty of care to their customer is questionable.

If you believe that then you are misunderstanding duty of care.

Marleyuk said:

I guess we’ll see how the FOS perceives it.

You can go down that route, it will take a lot of time and effort (although it is free). If you ask Virgin nicely and if it is a one off then they will almost certainly waive the fee. The FOC will probably not care about that either way, the FOC will however agree with and uphold the default marker as it is factual rather than a matter of opinion, they are there to deal with subjective matters, but your wife did default, that is not subjective. 

Speak to your broker, take their advice. It might be that you have to wait a few months on the mortgage application for things to settle down, it might be that you can proceed without issue, it might be that you can proceed but will have to accept a higher rate of interest. The mistake is your wife's, mistakes generally have consequences, I understand that she did not intend to make the mistake, that she will be feeling bad for the issue she has caused and you may be feeling angry and are attempting to divert that anger from being directed towards your wife by redirecting your own anger at Virgin, none of those however will correct the mistake, which is now in the past. Take the rational approach, deal with the situation as it now is and learn from it. 

D3xt3r5L4b

You'll be waiting weeks if not months for a response from the FOS.

Also why is the balance so high whilst going through a mortgage application?

ldhme

D3xt3r5L4b said:

You'll be waiting weeks if not months for a response from the FOS.

Also why is the balance so high whilst going through a mortgage application?

This is true, they're advising 4 months to even being assigned a case handler.

TadleyBaggie

The transaction could very well have been an offline transaction, and as such there might have been no ability to decline at the time.

bradders1983

TadleyBaggie said:

The transaction could very well have been an offline transaction, and as such there might have been no ability to decline at the time.

Good point. Maybe the OP can tell us the nature of the transaction that pushed it over the top.

Yahoo_Mail

Marleyuk said:

Hi,

My wife received a letter today confirming a notice (default charge) was being applied to her account because she made a transaction that put her credit card £60 over her credit limit.

The balance of the card is paid in full every month, no notifications had been received suggesting she was approaching the limit, and outside of this letter, nothing to confirm she had gone over the limit.

She called Virgin to offer to pay the balance off early this month and request the notice be removed but the staff member abruptly refused and said there was nothing that could be done.

A default feels like an extreme reaction to a £60 overspend given if she had been aware, she would have resolved it immediately.

Outside of a complaint, is there anything else she can do to remove?

They have not defaulted her, nor is this a default notice.  She has gone over her limit and that will be recorded on her credit file as it is an accurate account of what happened.  An over limit is a fairly minor blip on her credit file, although it's definitely not good if you're in the process of applying for a mortgage.  That's on her though, unfortunately.

Likewise, they have given her notification she has gone over her limit, this letter is her notification as required by law.

Going to the FOS is a complete waste of time, and it certainly won't be dealt with in time to save your mortgage, if this blip is enough to derail your application.  Besides, you need to make an official complaint and wait potentially 8 weeks for Virgin's response before you can approach the FOS.

The best thing to do is stop wasting your time with Virgin for upholding their end of the bargain and acting entirely according to the law and instead speak to your broker so you can get on top of this and hopefully salvage your mortgage application.

PixelPound

Yahoo_Mail said:

Marleyuk said:

Hi,

My wife received a letter today confirming a notice (default charge) was being applied to her account because she made a transaction that put her credit card £60 over her credit limit.

The balance of the card is paid in full every month, no notifications had been received suggesting she was approaching the limit, and outside of this letter, nothing to confirm she had gone over the limit.

She called Virgin to offer to pay the balance off early this month and request the notice be removed but the staff member abruptly refused and said there was nothing that could be done.

A default feels like an extreme reaction to a £60 overspend given if she had been aware, she would have resolved it immediately.

Outside of a complaint, is there anything else she can do to remove?

They have not defaulted her, nor is this a default notice.  She has gone over her limit and that will be recorded on her credit file as it is an accurate account of what happened.  An over limit is a fairly minor blip on her credit file, although it's definitely not good if you're in the process of applying for a mortgage.  That's on her though, unfortunately.

Likewise, they have given her notification she has gone over her limit, this letter is her notification as required by law.

Going to the FOS is a complete waste of time, and it certainly won't be dealt with in time to save your mortgage, if this blip is enough to derail your application.  Besides, you need to make an official complaint and wait potentially 8 weeks for Virgin's response before you can approach the FOS.

The best thing to do is stop wasting your time with Virgin for upholding their end of the bargain and acting entirely according to the law and instead speak to your broker so you can get on top of this and hopefully salvage your mortgage application.

People see "default" and misunderstand what that means. It is not a defaulted account, but a notice that she was in default of the agreement to stay within her limit (as she agreed in the contract). Virgin will report overlimit to the CRA and if it's being cleared then a blip. As you say it's the notice they are required to give by law, and if it had remained unpaid after the 28 days could well have then "defaulted".

Any discussion about whether they should have let the transaction go through or whether it was an offline transaction, is all a moot point. It is the card holder's responsibility to keep within limit. Why when going through a mortgage application the balance is anywhere near the limit that in itself could hamper getting one approved.

I agree, now that it's been paid, best to simply contact their broker for advice on how to rescue their application, rather than trying a complaint (unless they are doing that in the hope of getting the £9 back)

A_Lert

Beware that if you had any sort of promotional offer, such as a 0% balance transfer, on the card then the terms probably allow Virgin to remove that offer.

The only strong way I think you could justify not being penalised for going over limit is if one of the transactions responsible was erroneous or fraudulent.

molerat

Can't believe op is trying to shift the blame away from the one place it should be squarely placed.

xlnc99

A few points

1 - There is no such 'law' in place that requires Virgin to put in such data to the CRA agencies. Its an obligation but fact is - its their discretion to change the information. All depends on if you catch them on a good mood.
2 - As others have pointed out, its not a default and this should really not effect your mortgage application. Its not a late payment or anything and will not be marked as a Late Payment.
3 - (I am not 100 percent certain of this/ maybe someone can confirm) It depends on the balance of the statement as the over limit may not even be recorded on your credit file. It all depends what day the report to the CRA agencies. You should have cleared the over limit at least when you found out, more chance of them not reporting it.

All in all - you are fine.