Water company ruined my credit score and was declined mortgage

mrkitten

Hi all.

A bit of background: A couple of months ago my credit card supplier advised me they were reducing my credit limit to a quarter of what I was allowed and the following day my bank emailed me asking if I had debt problems they could help with. Alarm bells started ringing. Prior to this I had a mortgage in principle as I’d been viewing properties as a first time buyer.

After reviewing my credit score (which has always been excellent) I soon found out a water company (who I had an account with four years ago at an old address I lived at) has been set up and had 6 months worth of unpaid bills. I contacted them and was told it was a mistake they had made and would rectify it. It was wiped off Experian quickly but not off equifax or transunion. I made the water company aware of this.

During this time the house of my dreams came up for sale and was about to put an offer in but thought I better do my mortgage in principle again whilst this default was on my credit report. I was declined a MIP and the house was sold so missed out on this, which in all honesty has caused me a lot of stress and I am absolutely devastated. I did call the bank to see if there was anything they could do but they said no and to try again when the default was removed.

I chased the water company around on the phone and via email and was getting nowhere. They failed to respond to my official email complaint and have admitted their system has blocked my email address (despite us having previous email interaction no problem). The default has finally been removed over 8 weeks later from initial phone call. I later learned they’d also been sending out debt collectors to my old address, I’ve had no contact in form of email or calls or anything regarding this.

The water company offered me a very small amount of compensation which I feel is not enough considering the detriment to my finances, the emotional distress caused and my future home. Has anyone else had a similar situation or can advise me how I can go forward with this for more compensation. I believe they’ve breached the data protection act 1998, is it worth contacting a solicitor?

DullGreyGuy

House buying process takes an age, why not offer and continue whilst resolving the problem with the water company in parallel? 

If one bank wouldn't give you an agreement in principle did you shop around or go to a broker to see if they could secure you an in principle agreement? Again nothing to stop you switching back to the original mortgage proposal once the water issue resolved.

If they admit they made a mistake then you'd be entitled to have you financial losses covered but nothing you've posted suggests you are out of pocket as a consequence. Your decision not to offer on the property is knee jerk and you cannot say with certainty that the purchase would have gone through if the default wasn't there.

BJV

I understand that it must have been horrible.

I also understand that you missed a house that you had your heart set on.

Thankfully you spotted it and it has now been removed. 

It is hard to quantify how much you should be offered as in theory you have no out-of-pocket expenses.

You could if you want follow their complaints procedure then go to the ombudsman. It is up to you but there is no guarantee that you will get any more. It is up to you? Do you think that the amount is fair?

Equally hate to say it as per the previous post you could have offered and explained the situation to the vendor. They may have accepted it they may not - ???

Again I do understand when you have your heart set on a house you think will be your home.

Good Luck

mrkitten

Thanks both for your advice.

I did speak to the bank about the situation and they said they would be unable to offer me a mortgage with the default on my account. I did try to get a mortgage in principle with another lender but also unable to with them. 

Just to clarify, I probably didn’t explain in my post that I use my credit card for every day spending (which was taken to a quarter of my limit) and was using my overdraft in this period so incurred overdraft fees.

As they used my personal information to create an account which created debt, could it be considered identity theft? Would they also be liable for breaching GDPR by using my personal information without my consent?

MorningcoffeeIV

No, it wasn't identity theft. That's something entirely different.

The breach of the DPA 2018 (not 1998, that's long gone, since integration of GDPR)) is in not ensuring the data processed  is accurate. But you don't need to concern yourself with that aspect of it. 

You issue in in whether you can get any compensation for the error.

PixelPound

For compensation, you'd need to prove financial loss. Not getting a MIP isn't one as this isn't a mortgage, and getting a MIP does not mean you will get the mortgage when it comes to a full application (a MIP is a quick overview to say no immediate red flags like defaults CCJ's etc). There can be many reasons for not getting a mortgage, even if you were given a MIP, and how could you prove you'd have got a mortgage? If you was so reliant on credit that a reduction of the limit meant you had to use an overdraft and incur fees, how do you know your mortgage would not have ultimately failed when it came to stress testing.

If the default has been removed within 8 weeks from your initial call, then it will be deemed to have been resolved in a timely manor, as there is a complaints timescale that is allowed. We would all like it to be done instantly, but you don't have grounds for compensation if it wasn't but still deemed to be done in a timely fashion.