Advice (O2 Loan for device I do not own)

OnceUponATime___

Wondering if you can advise and/or warn others about this seemingly innocuous yet devastating loophole in Financial legislation (or if I've fallen victim to something I had missed).

I went to get a new mobile phone recently (from O2). The staff in the store screwed up the application process, so I returned home and applied online. I was cleared and received my mobile phone within the expected turnaround time. However, I chose poorly and elected to return the phone (well within the 14-day cooling off period). This was accepted back and I no longer had the handset, however, I stuck with O2 as a provider hoping they would be back in touch to arrange for a different phone. 

They did not, so eventually I rang them but the communications were so poor I was unable to arrange for the handset I wanted that would match or beat the deal out there I had seen with another provider (ID Mobile). I therefore requested my PAC code to transfer out. I have received a number of attempts by O2 to retain my business, none of which were serious. So I went to check out other providers in retail units as I was in town that Saturday.

I was refused credit. I checked and found that there is an outstanding loan on my account raised by O2. Surely this should be removed immediately when a handset is returned, should it not? I have been told by O2 that this may take up to 3 months to remove completely. 

I am now stuck as most credit agencies will not extend me credit to buy a new handset even though I do not have this loan any longer.

Could you suggest what my next steps should be and/or warn others out there to choose carefully?

DullGreyGuy

CRAs aren't updated in real time for most things... lenders typically update once a month but with the volumes of data involved etc it can mean the cut of data was taken the day before you paid off the loan so it'll be another month before the next cut is taken and can take a couple of weeks to be processed and applied. 

Banks and other big lenders can see the live position on the CRA, for consumers the access itself is only updated periodically. Perhaps some where lending isn't their key business activity they too are subscribing to a cheaper non-live position version. 3 months is definitely a highly prudent timeline but certainly in the past I've seen it take 2 months for a large repayment to show up on my view of the CRAs. 

Credit Reference Agencies dont give credit, they give data to lenders who make decisions on if to lend or not based on it and other factors. If a single handset value loan is getting you declined for further low value lending it would suggest you are overstretching yourself and maybe a more budget friendly device that you dont need credit for would be a better idea. Outside of that its just a case of waiting.

Mark_d

I'm surprised that the loan affects your ability to get a mobile phone contract. Are you payments up-to-date and on time?

flaneurs_lobster

What was the problem with the first phone that you took from O2 that was so bad that you had to return it?

Maybe the warning should be "Don't sign a credit agreement to buy a thing unless you are sure that the thing meets your expectations and requirements". 

OnceUponATime___

I'm surprised that the loan affects your ability to get a mobile phone contract. Are you payments up-to-date and on time?Yeah, that surprised me too. I've not defaulted on a payment on anything in over 10 years. This is the ONLY thing that has been added to my credit record in the past 11 months.

What was the problem with the first phone that you took from O2 that was so bad that you had to return it?Nothing as such - I was trying to switch from Android to iPhone but the poor little brain couldn't handle the change.

Maybe the warning should be "Don't sign a credit agreement to buy a thing unless you are sure that the thing meets your expectations and requirements". Yes, a perfectly reasonable thing to state. And a perfectly reasonable thing to expect. However, to me, there's an underlying point, inasmuch as when you sign up for any credit agreement, and should that product not prove satisfactory, there's no obvious mechanism for redressing the information that is held on your financial records by the CRAs. Right now they all say I've got a loan with O2 for a handset. I don't have either the handset or the loan, so it's not unreasonable to have been refused credit based on the evidence.

I guess the point I'm making is that the evidence appears flawed.