Overdrawn current account default date

brera1

I’ve searched evrywhere for a definitive view on this without success, so here goes with my situation.

I recently applied for a mortgage and was declined due to, what I found to be, a default on my credit record relating to 2017. I had an old bank account with Nationwide, opened in 1990, that I had stopped using as my main account many years ago. I moved home in 2012 but did not notify the bank of my change of address. I had some payments going through but thought I’d stopped using it entirely in 2013 and it was in credit. Unfortunately an old legacy National Trust direct debit (from 1992) remained and kept charging the account until it went into overdraft in 2015. The account had a £1700 overdraft limit so there was no default. However in early 2015 the new occupants of my old address had returned my statements informing the Nationwide that I was not at this address and with no information on any new address. Nationwide then recorded me as a ‘no trace’ and stopped sending statements. They did however continue to allow the NT direct debits to draw from the account for 2 more years. Nationwide maintain they reviewed the limit on my overdraft every 6 months but saw no reason to reduce it - even though I was a ‘no trace’, and no funds had been deposited since 2013. Eventually in 2017 they arbitrarily decided, with an overdrawn balance of £280, to reduce the overdraft limit to £250 and call a default. Clearly they then tried to contact me at my old address without success. The default was registered at £280 in Oct 2017.

Only in 2021 did I discover the default on my credit record and it has left me unable to obtain a mortgage. My credit record is otherwise 100% fine. I was remiss in not reporting my changed address, but the consequences seem disproportionately massive for me and my credit record, and seem not to truly reflect the amount and default date. Surely there was some onus on Nationwide to reduce the overdraft earlier, at least when I was found as a ‘no trace’ and not being sent statements (and therefore implicitly not aware of the debits on the account). This would have led to an earlier default at a lower amount, with significantly better ramifications for me. Instead it appears that default was arbitrarily called in 2017. I argued my case with Nationwide but they have stated they ‘followed their process’. I have no idea what else to do here - it feels unjust, with surely some onus on the Nationwide to act with some duty of care? (Surely overdraft could have been proactively removed in 2015 on ‘no trace’ and the default called then?)

Sorry for the long winded story here. Any thoughts gratefully received.

LaHostessAvecLaMostess

This is a no-win situation for Nationwide.  Had they removed the OD earlier you could just have easily claimed they were hasty in removing the overdraft.

I'd take it on the chin and move on.  A settled default from four years ago isn't an absolute barrier to a mortgage.

Puddles1983

Be grateful they limited your loss to £280 rather than £1700.
Use as a life lesson to keep on top of your financial admin.

brera1

Thanks for the comments, and I may need to just take it on the chin. 

It just seems wrong that the only action taken when I was found a ‘no trace’ was to stop sending statements - to continue to allow charges to go through, and to keep a £1700 overdraft limit

Thrugelmir

Didn't you ever wonder where your NT subscription was being paid from? 

brera1

I was paying an NT subscription through my newer main bank account, and didn’t know I still had an old NT subscription aswell - that info was all being sent to an old address - which I thought I had cancelled