Will a 'partially settled' status against a fraudulent loan scam affect my credit rating?

PippetyPop

Hi MSE wise sages,
I'm dearly hoping you can help a newbie.
A friend has become a victim of a really sophisticated scam costing £20k. £10k of which was a loan taken out in their name a few days ago. The loan company are considering what to do and have said if it is written off that my friend will have a 'partially settled' flag registered against the debt. 
Will this impact their credit rating as a result? Will they be able to get a re-mortgage in the future?
The loan is still in its cooling off period, but I'm worried the scam will end up ruining their credit rating for the next 6 years. Can anyone please help or advise if they have heard of this situation before?  

MattMattMattUK

PippetyPop said:

Hi MSE wise sages,
I'm dearly hoping you can help a newbie.
A friend has become a victim of a really sophisticated scam costing £20k. £10k of which was a loan taken out in their name a few days ago. The loan company are considering what to do and have said if it is written off that my friend will have a 'partially settled' flag registered against the debt. 
Will this impact their credit rating as a result? Will they be able to get a re-mortgage in the future?
The loan is still in its cooling off period, but I'm worried the scam will end up ruining their credit rating for the next 6 years. Can anyone please help or advise if they have heard of this situation before?  

Yes it will. Ignore the credit rating, it is meaningless, but having a "partially settled" debt on a credit report is negative as far as lenders are concerned, it would potentially not impact rolling over with an existing mortgage provider, but would make any switch or remortgage with another lender very difficult. 

If the lender admits the debt was not taken out by them then the record should be completely removed from their credit file. Why is the lender proposing leaving it as partially settled, what actually happened? 

MEM62

PippetyPop said:

The loan company are considering what to do and have said if it is written off that my friend will have a 'partially settled' flag registered against the debt.   

It is likely that you have miss-understood.  If you did not take the loan and it is accepted accepted as fraud, no trace of any kind will be left on your credit history.  However, if you were duped or coerced into taking the loan and actually did take the loan out that might be a different matter.   

Olenna

Given the company appear to acknowledged that the debt isn't theirs, your friend could write (tracked) or email them to request they remove the inaccurate records from all Credit reference Agency (CRA) records within one calendar month pursuant to UK GDPR. 

I wouldn't even entertain it on the credit files as partially settled or anything else if the party had no involvement in the fraud. 

Jami74

Are you able to share how it happened? It might help someone else to avoid the same thing.