M&S default - help 13 October 2022 at 9:33AM edited 20 October 2022 at 10:28AM in Credit cards 43 replies 1.8K views

johnweir123

I'll try and keep this short, if you want any extra detail please ask. 

I had a credit card from M&S and after some arguments I stopped talking to them and they applied a default to my credit file.  Now if I try to apply for credit I'm getting refusals. 

So I've read that I have to prove M&S applied the default notice to my credit file erroneously before it can be removed.  The alternative is to wait 6 years for it to clear. 

I think what they will do is keep referring to the contract we had and their Ts and Cs which state they can do what they've done. 

As with any argument there is always two sides and I believe I was correct at the time and I still think that's the case today.  So I want to prove the default notice is erroneous but I'm stuck on how to articulate my point and how to make an appeal they can't simply say 'no' to as they've done already. 

What they did: at the height of lockdown when we were going through difficult times they decided to implement 2-factor authentication (2FA) on the accounts for all their customers.  This meant unless the customer could authenticate twice they would be unable to logon and manage their account.  I had been managing my account exclusively online from the time that I got the card until the end. 

When they implemented 2FA they locked me out of the account with a technical error that had to be resolved on the back end. i.e. there was nothing I could do from the controls available to me and nothing the people on the various customer services helpdesks could do either. I had to write them a letter explaining the situation before they managed to resolve it. Some high level technician had to go in and fix my account to enable me to logon. 

I had a lot of things going on at the time (as did many of us) and ended up missing payments because I couldn't get online to put them through.  M&S said this didn't matter because they offer other ways to pay and this is the crux of it.  I'm of the view that having made it difficult for me to pay it is their fault I was unable to make payments on time. 

Following this, after a few months of me trying to resolve the technical issue by ordering a new security keypad, writing them a letter and engaging in occasional periods of concerted effort to get the problem resolved I eventually did. It turns out my mobile phone number had been entered incorrectly into the system and this was blocking everything. The details were not visible and there were no messages explaining the issue so it required a high up technician to diagnose and resolve the fault. 

In an apparent acknowledgement of the mess they'd caused they credited my account to the value of £25 as compensation.  However, as I was missing payments M&S started applying penalties to the account and interested related to those penalties.  I argued with them that they should not be doing this but whatever I said fell on deaf ears.  I tried waiting it out to see if they would resolve the problem but they just kept adding penalties and interest.  I paid off the full balance of the card in a single payment but left off what I thought were the incorrectly applied charges and explained this in a letter I sent to them.  They went into standard debt recovery mode from this point firing out an entire forest worth of letters, getting their mates from debt recovery to hassle me, phoning my mobile every day... the usual sort of harassment.  As I had tried to reason with them and thought there was no more I could do I decided to ignore them.  Eventually they stopped hassling me and I assumed it was all sorted.  But then when I went to apply for some credit I found they'd added the default notice to my file.  It was about £150.. not a massive amount. 

What I've since discovered while attempting to find a way out of this mess is that M&S consider themselves a responsible lender who adhere to the Standards of Lending Practice set out by the Lending Standards Board.  Having read the broad bullet points of the LSB policy it seems a concrete contradiction of the terms to behave like a bunch of absolute helmets towards your customers.  Which is what I feel like they've done with me.  

At the end of the day they've said they can apply charges for missed payments and they're going to do it regardless all other factors.  Literally nothing else matters as far as they're concerned.  I just think the situation is possibly less black and white? 

At this stage they've said nothing about the possibility of me even paying off the extra charges to resolve the matter.  As far as they're concerned the matter is closed, they've ruined my credit file for daring to argue with them and all is satisfactory. 

Does anybody think I have any hope of resolving this issue, please let me know what you think. 

MrFrugalFever

Hi,

I sympathise with your situation and I too think that perhaps M&S have been heavy handed in terms of dealing with the issues. However, in short, I would seriously doubt you have any recourse here.

The options to pay alternatively and the consequences of missing payments would have been clearly outlined in any T’s & C’s provided at point of account opening and any statements thereafter and this, unfortunately, seems to be every companies get out of jail free card.

As you now have a default on your file, it would appear you have very little to lose by following the below process;

Firstly, articulate a well written email, detailing timescales and events of what happened, try to recall conversations and what was said to their complaints team. Appeal for a goodwill gesture during ‘times of hardship’ I.e. Global pandemic….

Await a response (they have up to 8 weeks).

Once you have received their ‘final response’, you can then pursue the matter further with the Financial Ombudsman Service to have an independent investigator look at your case. Now this can take several months and often can be a bit too-fro between you whilst they gather all necessary information.

This is your right to appeal, it’s free and just costs you a few well constructed emails and your time.

I personally don’t think you have a leg to stand on but you never know.

MEM62

@johnweir123 Whilst the service from M&S may not have been stellar, there were other ways that you could have settled the account.  Although you claim that the alternatives 'made it difficult' to pay, a point that is debatable, it was certainly not impossible to pay.  Reading between the lines I get the feeling that you have allowed your frustrations with M&S to impact on the way you dealt with the situation, and this had not led to the best outcome for you.  Unfortunately, it is unlikely that you have a case for getting the default removed.      

[Deleted User]

You could have paid by direct debit or indeed a transfer from another bank using the card number as the reference, the fact you couldn't get online to the account didn't stop you paying. If they followed the process of warning you and defaulting after 2-3 missed contractual payments, per the guidelines, then I can't see you getting anywhere given their response was exactly that

Ebe_Scrooge

Deleted_User said:

You could have paid by direct debit or indeed a transfer from another bank using the card number as the reference

Or even go really old-school, pay by debit card over the phone

OP, I really don't think you have a leg to stand on.  You defaulted, that fact has been recorded, end of story.  It might be wise to try and avoid letting anger stand in the way of reason should you ever face a similar situation again.

johnweir123

Thing is I've never had a default before.  I didn't think for a piffling amount such as it is they would take such drastic action. 

In terms of paying by other means, with the pandemic on going to the Post Office counter was unlikely. Some of the other ways of doing it would require you to know what the current balance was so you could make the right payment but without some way of looking at the account you wouldn't know.  And we're living in the times of paperless account management.  So that really only leaves telephone banking which requires an initial setup.  So in the first instance because I had only ever used online the thought of using another method hadn't even entered my mind... a case of not knowing what you don't know... you can even begin to know it if you don't know you don't know it... haha.  They didn't tell me at the time that I should pay by other means while they resolved the issue.  So they've created a mess and the left me on my own to muddle through. 

I think the fact they paid me £25 as compensation is an admission of guilt.  So if they're saying there was a problem in one breath... why say there was no problem in another? 

I strongly suspect that since M&S Bank is a front for HSBC that those managing the M&S branded products don't have full control over what HSBC does with things like interest and penalties.  I have a feeling M&S have done what they can by offering the £25 compensation but aren't able to make account adjustments beyond that.  So the details of how those penalties accrued on the account have no bearing on whether or not they stay there. 

My thoughts on how this might be resolved are with their compliance with the Standards of Lending Practice.  The code contains lines like this for instance: " We will treat you fairly and reasonably at all times and make sure that you are provided with a high level of service." - I just wonder whether what they've done is fair and reasonable for the duration of the time we had an account and if it isn't (as some of you agree) then is that of any significance. M&S Bank give their adherence to this code prominent position on their website as if they're proud to be this way... but it seems to mean nothing at all. Or does it? 

born_again

>>I strongly suspect that since M&S Bank is a front for HSBC that those managing the M&S branded products don't have full control over what HSBC does with things like interest and penalties. <<

M&S use HSBC systems operated by their own (M&S) staff & have their own banking licence.

Amendments can be made on the system.

[Deleted User]

johnweir123 said:

Thing is I've never had a default before.  I didn't think for a piffling amount such as it is they would take such drastic action. 

In terms of paying by other means, with the pandemic on going to the Post Office counter was unlikely. Some of the other ways of doing it would require you to know what the current balance was so you could make the right payment but without some way of looking at the account you wouldn't know.  And we're living in the times of paperless account management.  So that really only leaves telephone banking which requires an initial setup.  So in the first instance because I had only ever used online the thought of using another method hadn't even entered my mind... a case of not knowing what you don't know... you can even begin to know it if you don't know you don't know it... haha.  They didn't tell me at the time that I should pay by other means while they resolved the issue.  So they've created a mess and the left me on my own to muddle through. 

I think the fact they paid me £25 as compensation is an admission of guilt.  So if they're saying there was a problem in one breath... why say there was no problem in another? 

I strongly suspect that since M&S Bank is a front for HSBC that those managing the M&S branded products don't have full control over what HSBC does with things like interest and penalties.  I have a feeling M&S have done what they can by offering the £25 compensation but aren't able to make account adjustments beyond that.  So the details of how those penalties accrued on the account have no bearing on whether or not they stay there. 

My thoughts on how this might be resolved are with their compliance with the Standards of Lending Practice.  The code contains lines like this for instance: " We will treat you fairly and reasonably at all times and make sure that you are provided with a high level of service." - I just wonder whether what they've done is fair and reasonable for the duration of the time we had an account and if it isn't (as some of you agree) then is that of any significance. M&S Bank give their adherence to this code prominent position on their website as if they're proud to be this way... but it seems to mean nothing at all. Or does it? 

Defaults should only be applied after 2-3 missed contractual payments, but if you didn't pay it for 6 months, it will have been automatically applied, whether 1p or £100,000 doesn't matter

You can manage / view your spend in the app, or you could remember what you paid for and make a payment, even if only the minimum was paid you would have been fine. The fact it was £150 suggests a couple of small spends that were easily tracked. It doesn't "only leave telephone banking" as above, you can pay by direct debit to take the minimum or the full balance every month. You can pay a balance or sum every month by standing order. You can pay manually via a bank transfer. Unfortunately, you created a mess by choosing to pay online only and not using other means

The £25 is a token go away sum, it is nothing at all like an admission of guilt. It's a payment for the issue you had logging in, nothing more. It is nothing to do with the default for missed payments

As above, M&S and HSBC are independent for these purposes.

Quoting vague statements about standards of lending practice at them isn't going to change anything, you didn't pay your bill despite knowing it was due and didn't take any steps to get around the system. The code doesn't say they cannot issue a default if you don't pay your debts.

johnweir123

That's a bit harsh.

I didn't take any steps to get around the system and I didn't pay my bill?  Are you reading the same thread? 

I paid the full balance (£2k) and I wrote them a letter after phoning and contacting them to try and get it resolved.  I phoned them a few times and eventually as I wasn't getting anywhere I wrote to them.  

johnweir123

born_again said:

>>I strongly suspect that since M&S Bank is a front for HSBC that those managing the M&S branded products don't have full control over what HSBC does with things like interest and penalties. <<

M&S use HSBC systems operated by their own (M&S) staff & have their own banking licence.

Amendments can be made on the system.

The point is... I would have thought if they could have addressed my complaint about the fees applied while I thought my account was inaccessible they would rather have done that than lost me as a customer.  Up to that point there had been no issue.  So if I was a good customer with a small complaint wouldn't they have resolved it if they could have?  Is their model of business different to that whereby they do what they can to make life needlessly difficult and expensive for people... to what end? 

Ebe_Scrooge

johnweir123 said:

I paid the full balance (£2k)

That's not what you said originally :

johnweir123 said:

I paid off the full balance of the card in a single payment but left off what I thought were the incorrectly applied charges

If I'm reading this correctly, you paid off what you "thought" you should pay, but there were charges on the account that you refused to pay, and that's what's led to the default.

The correct procedure would have been to pay off the full balance, then argue the toss with them over the charges if you felt they were unfair.  You cannot just unilaterally decide not to pay what are, potentially, perfectly legal charges/fees.