Halifax AP Marker & Ombudsman

9bobnote

Hi everyone, first post here, sorry I have no idea what I'm talking about but I'd really appreciate some advice! For background I am young man with mental health difficulties, and recently I was diagnosed on the autistic spectrum.

So - I have a Halifax bank account. Until recently I had a £400 overdraft that I was regularly stuck in and paying a small amount of interest on. 3 months ago, after a phone call with the bank's "priority customer" team, I was put on a plan whereby all the interest charges were frozen in exchange for my overdraft decreasing by £15/month.

I was very happy with this - until the next month when I noticed my account showing as "special arrangement" on ClearScore (nothing on MSE Credit Club or CreditKarma). After researching I believe this is an AP marker. If I'd have known this plan would impact my credit score in anyway I wouldn't have entered it. When I rang back up and told Halifax this, the person on the phone opened and closed a complaint for me and gave me £30. She said there was no way they could remove the marker.

Now the 3 months is over my options are to continue with the plan, or to let it end and lose my (now £355 and temporary) overdraft. I'm very confused as to which option will be better for me. I rang Halifax again and they couldn't tell me exactly how either option will affect my credit score. Could anyone here tell me? I'd prefer to reduce the overdraft gradually rather than have it disappear immediately, but not if this plan is going to continue having a negative impact. I've read it takes 6 years from account closure for an AP marker to fall off... but I have no plans to close my current account if that makes any difference.

In hindsight, never entering the plan at all and keeping my overdraft would have been my best option by far. As part of the complaint that was opened I've received a letter telling me I can write to the ombudsman. Do I have a real case or should I just accept the £30 and move on from my mistake?

Thank you in advance!

Yahoo_Mail

You say you would have been better keeping the overdraft open.  That is correct but from the sounds of it you were contacted by a collections or quasi-collections team and they wanted the overdraft paying back one way or another. Keeping it as is would not have been an option.

Your options are either pay the overdraft back in full, continue with a payment arrangement or let it lapse, which is untimely going to result in the account defaulting. If that happens you will need to find alternative banking arrangements as any money paid into the account will be used to repay the debt and even though they won't leave you with nothing, it will be a lot of messing around getting "permission" to go to a branch and withdraw money most likely.  Likewise, any direct debits and other payments will be bounced if they were to take you overdrawn or further into an unauthorised overdraft.

I don't think you have a valid complaint with the FOS.  The £30 they've already offered is more than sufficient. Even if they'd have told you about the AP markers, you didn't have a choice here.  If you couldn't afford to pay it back it was either AP markers from the arrangement or a default from the overdraft being removed, both of which are bad.

9bobnote

Hi, thank you very much for your response.

The agreement came about because I spoke to someone from the CAB. I was in my overdraft and paying interest, so they wrote to the bank for me asking if it could be frozen.

I don't think I explained myself correctly. I don't owe any money as I'm out of the overdraft now. The plan was only for 3 months, and has just finished. The options now are to set up another one and keep bringing the overdraft limit down gradually or go straight to having no overdraft at all. Again I'm not in the overdraft but I thought it was good to have just in case I needed it.  

My only point of contention is that I did ask if this would have an effect on my credit file and was told it wouldn't, nor would it affect my chances of getting another overdraft with them in the future. If I'd have known about the marker I would have chosen to carry on paying the interest rather than receive a marker I'm now stuck with for all these years. There was no question of defaulting and I've never missed a payment. I thought the plan was just there to help me get back to baseline a little quicker as I'm on a particularly low income. But it seems to have done me more harm than good.

Yahoo_Mail

If you don't need the overdraft, get rid of it.  Continuing the agreement may well continue the AP markers, even if your;e out of the overdraft.

I understand what you're saying but honestly, it sounds like you have a problem with CABs advice rather than Halifax. There has to be more to this story that you just contacting hem over a small overdraft debt, surely?  Otherwise, I'm not sure why they'd advise a repayment program for something you could clear in three months. Either way, they should have told you that getting an interest free overdraft repayment was going to have a price, although three months of AP markers will matter very little in a years time.

9bobnote

Hi, thanks again. I will get rid of the overdraft if that is the case.

Not much more to the story I'm afraid. The CAB advisor was seeing what help they could provide RE: mental health. We looked at grants, benefits, etc and then I mentioned the interest I was paying.

The CAB letter was written around 9 months ago and interest frozen. When halifax contacted me 3 months ago saying the interest would start again unless I called, I called and started this plan. My income was low enough that the interest was a problem, but not a big one. To make it worse I was practically out of the overdraft when the plan actually started. 

Clearly I just didn't understand what I was signing up for, and I feel Halifax misinformed me. I'm glad you say the markers won't matter much in the future as that is what I'm upset about.

adamp87

There is probably something in the bank account terms & conditions or overdraft that you agreed to beforehand they’ll point too.

I understand your frustration but it’s done now and there’s not I don’t believe any sort of law that states they should of outright communicated with you.

What it shows is you have agreed to make payment via a plan with the bank/creditor so it’s correct reporting. 

If CAB were acting on your behalf it’s possible they sent something to them, but you could argue to begin with Citizens Advice should have told you, but again some don’t know & others won’t have thought about it. 

At the time the plan was to help you relieve pressure on debt. 

As someone said above it’s done now and the longer it goes the better your report will be.

You could raise a formal complaint with the bank on the off chance they’ll recede citing the difficulties and mental health you were experiencing and thus a further negative effect now but honestly I’m not sure if it would be successful. 

Dr_Crypto

It reads to me more like the complaint is with the CAB rather than the bank. If you were comfortably servicing this small overdraft then why would you allow the CAB to get involved and make arrangements for it? 

sourcrates

Hi,

What you have to understand is that any arrangement you enter with a bank, will result in some kind of negative mark on your credit file, call centre staff are not always that well informed about such things.

With hindsight, what you should have done was repay the OD as and when you could, then reduced the OD by that amount each month yourself (you can do this from most banking apps), no one would have been any the wiser.

Your credit file will heal with time, unless you intend to apply for further borrowing in the near future, then it dosen`t really matter about a few AP markers.