Current Account switch went wrong

MattHerbison

As the title suggests, I have recently switched current accounts to take advantage of a switching incentive and the process has gone ‘wrong’. 

I have a personal loan for which a standing order was set up 3 years ago (I banked with the same bank which lent the money, so they set it up automatically). Since then, the same standing order has been paying the loan off monthly without ever missing a payment. I even moved current accounts once before and the standing order moved and carried on paying without my involvement. 

This time however, when switching, the standing order moved over but the first payment was scheduled a month too late. Therefore neither bank paid the standing order and the loan payment was missed. The lender now wants to record this as a late payment, even though I paid as soon as they sent me a letter and won’t remove the late payment marker as it wasn’t their fault. 

Where do I stand? 

[Deleted User]

You stand with a late payment mark.

However, it will fade with time.

The_Fat_Controller

One late payment will not affect you unduly.
However, as it was a regular payment which you knew about, how did you miss the fact the money had not gone out on time and intervened yourself ?
Factually, the lender is correct and entitled to record a late payment.

kaMelo

MattHerbison said:

As the title suggests, I have recently switched current accounts to take advantage of a switching incentive and the process has gone ‘wrong’. 

I have a personal loan for which a standing order was set up 3 years ago (I banked with the same bank which lent the money, so they set it up automatically). Since then, the same standing order has been paying the loan off monthly without ever missing a payment. I even moved current accounts once before and the standing order moved and carried on paying without my involvement. 

This time however, when switching, the standing order moved over but the first payment was scheduled a month too late. Therefore neither bank paid the standing order and the loan payment was missed. The lender now wants to record this as a late payment, even though I paid as soon as they sent me a letter and won’t remove the late payment marker as it wasn’t their fault. 

Where do I stand? 

Assuming you switched using CASS then take it up with your new bank. 

pjread

I'd imagine the new bank will apologise and probably offer a small ex gratia payment, but I doubt you'll get the late payment removed at the CRA.

You could ask the CRA to add a note saying a current account switch messed up rather than you just didn't/couldn't pay, but I'm not sure if that'd really help TBH.

phillw

When the bank you are switching to asks you what date you want to switch, it's worthwhile picking a date after any standing orders and direct debits go out (I've found it's best to cluster them at the start of the month to make this possible). Then you ought to keep a close eye to make sure that they do actually go out.

However that doesn't help you now, so I'd complain to your new bank first and get them to apologize, then raise a complain with the lender and use the evidence of the bank apologizing that it wasn't your fault. You may have to go to the financial ombudsman.

It may not work, but you might get some money and at the end of the day it's only one late marker. I'd be more worried about any late fee/additional interest.