Financial ombudsman decision

Floppy_Sock

Hi all,

I defaulted on an £8k MBNA debt and £9k Barclaycard credit card debt back in 2019 and these were passed to Link financial and Lowell respectively. I’ve been paying these off on an informal arrangement and they currently sit at £6k and £7k. 

I recently raised an affordability complaint against MBNA and Barclaycard which I then had to escalate to the FOS as they both rejected my complaint. My complaints were both upheld by the ombudsman and both MBNA and Barclaycard have been ordered to adjust the balances on both debts by removing the total value of interest and charges applied during the time I was with them. This will see both debts reduce by £2-3k each, great news! 

As part of the resolution they’ve also been told to remove any adverse information relating to the accounts from my credit file. I’m waiting hear back from both the banks to tell me they’ve done this.

My question is what should I expect my credit file to look like following this? There will still be outstanding balances for me to pay. 

My head says that both defaults should be removed and accounts marked as settled. And any reference to the debts being passed onto DCAs also removed. Does this sound right? 

I’m hoping that the resolution is implemented as I expect so I don’t need to fight further with the banks on my interpretation of this part of the resolution! 

MorningcoffeeIV

Floppy_Sock said:

My head says that both defaults should be removed and accounts marked as settled. ! 

Why does your head say that if there will still be an outstanding balance?

Floppy_Sock

MorningcoffeeIV said:

Floppy_Sock said:

My head says that both defaults should be removed and accounts marked as settled. ! 

Why does your head say that if there will still be an outstanding balance?

Surely an outstanding balance being reported on my credit file by a debt collection agency still constitutes adverse information being on my credit file? I can still continue to pay off the debt, it should just not be reported to the credit agencies. 

I’m not saying I’m right by the way, just wondering on the interpretation of the removal of adverse information on my credit file and interested in other peoples views! 

[Deleted User]

MorningcoffeeIV said:

Floppy_Sock said:

My head says that both defaults should be removed and accounts marked as settled. ! 

Why does your head say that if there will still be an outstanding balance?

Because the debt isn't written off.
The Original Post states that the the money borrowed still has to be paid on the original amount borrowed - minus those 2, mentioned, factors.

I'm not sure how the wording, on the credit file, will look though @Floppy_Sock , it will probably be a case of wait and see.
You've had a good outcome, i'd be inclined to take your win and get on with life now.

MorningcoffeeIV

[Deleted User] said:

MorningcoffeeIV said:

Floppy_Sock said:

My head says that both defaults should be removed and accounts marked as settled. ! 

Why does your head say that if there will still be an outstanding balance?

Because the debt isn't written off.
The Original Post states that the the money borrowed still has to be paid on the original amount borrowed - minus those 2, mentioned, factors.
.

Exactly. That why I was wondering why the OP thought the debt should be marked as settled when it isn't.

MorningcoffeeIV

Floppy_Sock said:

MorningcoffeeIV said:

Floppy_Sock said:

My head says that both defaults should be removed and accounts marked as settled. ! 

Why does your head say that if there will still be an outstanding balance?

Surely an outstanding balance being reported on my credit file by a debt collection agency still constitutes adverse information being on my credit file? !

No. It's not adverse information. It's just information about a debt owed.

No one sees the name of the owner if the debt.

sourcrates

There isn`t a way to mark your credit file to reflect the resolution you have been given.

And creditors will always take the simplest approach in these matters, so you may find that all reference to these accounts will vanish completely from your credit files, as it is the only outcome I can think of that can be applied.

That would be in line with what others have reported happening.

Floppy_Sock

Thanks for all the input. I’ll update this post once I see some movement

Floppy_Sock

Just thought I’d provide an update on this: 

Barclaycard: They have contacted Lowell DCA to have £2.3k deducted from the balance (interest and charges) and I’ve arranged an affordable payment plan to pay off the remainder that I owe. As far as I can tell there have been no changes made to my credit file apart from the new balance being reported.

I’ve asked Lowell about the part of the resolution to remove any adverse records on my credit file relating to this account and how this would work in practice. I’m awaiting a response from them. 

MBNA: I’ve had no contact from them since the ombudsman decision nor has the balance with Link been adjusted in line with the resolution. 

I’ve been in contact with the FOS as they advised MBNA to commence implementing the resolution within 4 weeks and it’s now been 6 weeks. It’s been over a week since the FOS have chased MBNA for an update so looks like this might be dragged on for a bit longer. 

I also contacted Link a few weeks ago asking if they’ve had contact from MBNA but they’re yet to respond - bar the automated email I received as the account is now off ‘hold’ (which was put on for 30 days when I made them aware of the FOS ruling).