How much compensation to ask for - credit card firm said they applied unfair default 4 years ago

DMorrow80

Hi folks 

In November 2019 MBNA applied a default to my credit card even though I paid the overdue amount late, but strictly speaking on time to avoid a default. At the time I argued with them however I had been late a few times and so gave up after they said they wouldn't do anything. 

It was a hard time for me financially and I missed payments at other providers however this was the only default ever added to my file - I always managed to pay the other ones enough / at the last minute so that they never gave me a default. My credit wasn't great therefore already however as a result of the default primarily my credit rating fell to the pits - MBNA also moved my account to an outside collections agency which put pressure on me to pay an even higher amount per month to clear the outstanding balance within a year. This put even more pressure on me - luckily I got a new higher paying job but I could have paid other credit services off quicker without this pressure.

In October MBNA proactively wrote to me to say they realised it was an unfair default, they were removing it and apologised. I have said I want to ask for compensation because this situation put me under more pressure to make repayments, caused distress in my relationship with my partner and contributed to my breakup, reduced my credit rating / was my only default, meant I was refused better credit products and I was denied for a mortgage on my new home. I'm also annoyed because I knew I was in the right at the time and told MBNA that but my complaint at that time was not upheld. I can contact my financial advisor regarding the mortgage refusals as evidence. I paid for the new home by borrowing money from my parents. 

MBNA have asked me to think about what compensation amount I am seeking. Does anyone know what has been successful in the past, is reasonable or a decent way to calculate this?

Thanks
D

DMorrow80

I should say I likely took out other products which I would have had no need of had the payments to the collections agency not been so high - I'll check back on that. 

sourcrates

Defaults are not normally removed, it can only happen under very specific circumstances, usually only if the creditor did not give you the standard 14 days to rectify your breach of the terms and conditions, set out in sec 87 of the consumer credit act, as only after that time has elapsed can a default be placed on your credit file.

By them admitting blame here, I suspect that is what must have happened, but how you go about quantifying loss for compensation purposes in this situation, I have no idea.

For example a default would have made obtaining further credit very difficult, if not impossible, however you do not have to dance to the tune of a debt collector, you can always say no, they have no authority to make you agree to anything, possibly you were unaware of that.

As for what amount to ask for, don`t for one moment expect to get 1000`s here, I would say an amount of around £500 would be reasonable, as even one default can mess up your financial status for a full 6 years, but it would not have been the only issue that may have led to you being rejected.

If you want to chance your arm and ask for more, then that is entirely up to you.