Default Removal - Financial Ombudsman Service

JH1345

Hello all

I made a complaint to the FOS last year regarding the NatWest Group (5 cards across the group - 2 with NatWest, 2 with RBS and 1 with Ulster Bank). 

The cards were in default stage and with a third party but I was always confident they should’ve never been given as all were given within 6 weeks with a combined limit of £25k on top of existing debts.

Anyways, the FOS sided with myself. They asked NatWest to refund ALL interest and remove ALL adverse information. As it was with a third party, NatWest decided to buy the debts back to service it themselves (although this wasn’t demanded by the FOS).

Natwest are now advising that my old minimum payment amounts are due, where as I was paying £1 pm to the third party collections company, and are also advising that a default and late payments will again show on my credit file from post complaint stage with the FOS if these aren’t kept up to date - which I’m clearly not going to be able to do - as they’re over £400 and this was unaffordable, hence the original default and complaint, in the first place.

NatWest are claiming that an ombudsman they’ve spoken to at FOS has claimed the collection process reverts back to normal after the complaint and a default can be given again. I’m almost certain this is incorrect. I’ve went through this with Barclaycard before and they’ve not added anything adverse on my credit file post complaint and were very helpful.

My question would be, if the FOS have advised to remove all adverse info because it was not affordable, can they then start reporting it again after removing it? It seems crazy and ludicrous if this is the case but again I’m pretty sure it is incorrect.

Any help, advice or experience on something like this is much appreciated.

ThisnotThat

I'm surprised that the FOS sided with you, to be honest.  You could have always just not run up the debt.  Credit card limits are limits, not goals.

If  NatWest are claiming that then go and ask the Ombudsman.

adamp87

Did FOS agree they should never have been given? If that’s the case from what I’ve read they instruct/advice the accounts are shut down and written off.

I’d message the ombudsman back as a priority (re read what they actually stated as you might need to clarify it) and state what’s happening & what you understand should be happening.

It doesn’t seem likely the ombudsman would uphold your complaint for them to now apply a new default years later and start the whole thing again.

richardadc

@JH1345 what you've been told about them being able to start reporting negative information and a default seems to correct.  I questioned this with the adjudicator when I made a complaint to the FOS as it only mentioned past negative information would be removed.  The adjudicator said they could, so i took it to an ombudsman.  The ombudsman confirmed in the final decision that all previous negative information will be removed, but they have the right to report the status of the loan going forward including payment arrangements etc.  Once the loan is paid off, the entire entry should be removed though.

I really didn't think this was fair as I defaulted on the loan 3-4 years ago and it gave them the right to report a more recent default while I was paying off the remaining balance.  I spent hours on the phone and spoke to an adjudicator that basically agreed with me that it wasn't fair but after speaking to the ombudsman again just said that is the final decision.

Luckily the company i had the loan with hasn't updated my credit report so it still shows the original default date.  The only issue is that is shows the original debt too even though the debt got reduced by over half and since then I've paid off a large amount of it.  I'd rather have this though than a new default added to my report. 

Thrugelmir

richardadc said:

I really didn't think this was fair as I defaulted on the loan 3-4 years ago 

CRA information is for the benefit of other commercial users. If material facts aren't disclosed then the information becomes worthless in terms of pricing risk or deciding whether to undertake business. 
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richardadc

@jh1345 I've included the quote from the decision below:

"LOAN COMPANY has said that it will remove any adverse information about the lending from **** credit file but would continue to report information about the outstanding loans – that a repayment plan was in place or subsequent missed repayments as examples. LOAN COMPANY has an obligation to accurately report **** outstanding debt to the credit reference agencies. So, this part of the compensation isn’t unreasonable."

richardadc

Thrugelmir said:

richardadc said:

I really didn't think this was fair as I defaulted on the loan 3-4 years ago 

CRA information is for the benefit of other commercial users. If material facts aren't disclosed then the information becomes worthless in terms of pricing risk or deciding whether to undertake business. 
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I'm not sure if you're agreeing with me or not.  Information on your report should be accurate.  Saying I defaulted on a debt nearly 4 years later than i actually did isn't accurate and doesn't represent any facts.  I asked for the default to remain on my file with the original date but the ombudsman wouldn't agree to that either.  That would have at least kept the information accurate.

The problem is that there was also no way for me to avoid the default.  I missed the original agreement nearly 4 years ago.  The loan company wasn't willing to setup another way of making payments to avoid the default being placed on my file again.  So once again if I can't go back in time to make the original payments per the original agreement, the default should have remained as per the original default date.