Advice for credit agreement complaint

Joe980

Hello All,
I'm looking for a bit of advice, perhaps from someone who may have had a similar experience to me, or someone in the know.

I have an account with a financial provider, well known, limited company, all above board etc. and Allows me to purchase products and pay monthly over a set period of months, I have used this fairly regularly and the direct debit has been set up and used successfully for a number of years, until now.

On checking my account recently I noticed there to be a small amount in arrears, around -£6 and some pence, I called to query this and was told I've had a credit refund on one of my accounts and this caused some issue on their system which knocked the direct debit off, nothing to worry about, we'll refund you the amount and just to call back once it's processed to "sort out" the arrears and make my usual £27 odd direct debit payment over the phone to keep my account up to date until they could re-set it up.

I did query why it had to be refunded etc, but they assured my it HAD to be done this way, they could not move money from one pot to another.

I do a little digging on my account in the mean time, they have not taken a direct debit since September 2024... I have received NO notification that the direct debit was stopped or that I needed to take any action on my account, otherwise I could have remedied this. They have also been charging interest every month increasing my arrears.

I called back once the refund was processed and was met with "Ok s you're going to pay the full arrears back?" which I wasn't advised that is how it was going to be sorted out, given it was their system error and there should be some responsibility taken by the company in relation to clearing the arrears.

I was passed to a couple of agents, and had the same conversation, they agreed to remove a £30 late payment fee they had applied last week when they realised I hadn't paid on the direct debits, but I'm not sure that's good enough. I further explained the situation with the customer service agent not being able to move beyond "But your account is in arrears, you owe the money"

I don't dispute I owe them money, as the direct debit wasn't paid - my argument is that none of that is due to my error, it is their system that has caused the DD to not be taken, that has not notified me (I couldn't tell you how many DD's I have, I try to keep tabs on my bank transactions but only keep brain space for mortgage/insurance etc)

What I do dispute is that my arrears are increased due to the extra interest and that as it's an error on their end there should be some responsibility taken by them in that regard.

I was also considering the impact on my credit file, however it is not showing my account in arrears on Experian, nor does it show missed payments - so I'm not sure what's going on there?
I was advised (or threatened shall we say) when I wanted to file a complaint with them that I should pay my arrears as, even with a complaint, they would negatively mark my credit file and I would be liable to late payment fees etc.

I'm just wondering what I can expect as a reasonable complaint resolution for this? I'm minded to go full ham and expect the entire arrears to be written off due to their mistake and the terrible customer service advice that's been given, it's not a huge amount, just under £200, but it feels like the principle of it more than anything.

If they come back saying they're not going to do anything and expect me to pay (potentially lumping on charges and credit file reports) is it worth a complaint to the FOS? Would they achieve a more favourable outcome for me?

Thanks in advance.

MattMattMattUK

Joe980 said:

Hello All,
I'm looking for a bit of advice, perhaps from someone who may have had a similar experience to me, or someone in the know.

I have an account with a financial provider, well known, limited company, all above board etc. and Allows me to purchase products and pay monthly over a set period of months, I have used this fairly regularly and the direct debit has been set up and used successfully for a number of years, until now.

On checking my account recently I noticed there to be a small amount in arrears, around -£6 and some pence, I called to query this and was told I've had a credit refund on one of my accounts and this caused some issue on their system which knocked the direct debit off, nothing to worry about, we'll refund you the amount and just to call back once it's processed to "sort out" the arrears and make my usual £27 odd direct debit payment over the phone to keep my account up to date until they could re-set it up.

I did query why it had to be refunded etc, but they assured my it HAD to be done this way, they could not move money from one pot to another.

I do a little digging on my account in the mean time, they have not taken a direct debit since September 2024... I have received NO notification that the direct debit was stopped or that I needed to take any action on my account, otherwise I could have remedied this. They have also been charging interest every month increasing my arrears.

I called back once the refund was processed and was met with "Ok s you're going to pay the full arrears back?" which I wasn't advised that is how it was going to be sorted out, given it was their system error and there should be some responsibility taken by the company in relation to clearing the arrears.

I was passed to a couple of agents, and had the same conversation, they agreed to remove a £30 late payment fee they had applied last week when they realised I hadn't paid on the direct debits, but I'm not sure that's good enough. I further explained the situation with the customer service agent not being able to move beyond "But your account is in arrears, you owe the money"

I don't dispute I owe them money, as the direct debit wasn't paid - my argument is that none of that is due to my error, it is their system that has caused the DD to not be taken, that has not notified me (I couldn't tell you how many DD's I have, I try to keep tabs on my bank transactions but only keep brain space for mortgage/insurance etc)

What I do dispute is that my arrears are increased due to the extra interest and that as it's an error on their end there should be some responsibility taken by them in that regard.

I was also considering the impact on my credit file, however it is not showing my account in arrears on Experian, nor does it show missed payments - so I'm not sure what's going on there?
I was advised (or threatened shall we say) when I wanted to file a complaint with them that I should pay my arrears as, even with a complaint, they would negatively mark my credit file and I would be liable to late payment fees etc.

I'm just wondering what I can expect as a reasonable complaint resolution for this? I'm minded to go full ham and expect the entire arrears to be written off due to their mistake and the terrible customer service advice that's been given, it's not a huge amount, just under £200, but it feels like the principle of it more than anything.

If they come back saying they're not going to do anything and expect me to pay (potentially lumping on charges and credit file reports) is it worth a complaint to the FOS? Would they achieve a more favourable outcome for me?

Thanks in advance.

Firstly pay the amount due, the raise a complaint. If they put overdue or even default markers on your credit report it will cause bigger issues in the short term whilst those also need resolving and they may not even get removed as they would be technically accurate.

Your idea of ham is a no go and somewhat ridiculous, they have obligations and so do you, the fact that you did not check your payments were up to date is part of the problem. There is no way they are going to write everything off. Your position should be that they agree to refund any interest and charges and you will repay the money borrowed, that would be reasonable, if you dig your heels in and refuse to pay anything then you will get nowhere.

You need to either complete the complaints process of the lender, or exhaust the eight week limit before you can complain to the FOS, who will then take 6-18 months to make a decision. So factor that into your willingness to argue as well. It is generally far better to get it resolved with the lender if possible.