Default Notice applied in ERROR for 0.07p!

layla250385

Well, heres the story.

My flatmate and I applied for our first joint mortgage, had an agreement in principle, put in an offer, it was accepted, paid the survey, it came back great. Everything was going fine...then, Bank of Scotland struck!

My flatmate had a current account for kids, (16-21 account) it lay dormant as she had been upgraded, there was no debit card, statements or correspondance for this account. Then, my flatmate started receiving charges for the dormant account.

She done the right thing (I work for HSBC and told her to argue in branch - do not use telephone service and do not pay). She had the charges refunded but was told that to close the account she had to pay the 2.65gbp negative balance - which she did.

However, she was not told of the debit interest that applied for that account, which was the value of 0.07gbp. This debit charge then incurred, 2 lots of 28gbp charges so the next thing we hear about this is the letter hitting the floor with a default notice for 56.07gbp.

Needless to say, we went into branch, all guns blazing, demanded to speak to branch manager as i felt the branch staffs incompetency would lead us further down the 'debt' track. Branch admitted liability - they realised it was their fault as my flatmate has no other credit! no overdraft, loans, nothing! no credit history existed before this fiasco.

The debt had since increased up to 84.07gbp, not including debit interest. which the branch were going to refund as 'goodwill'. Quickly corrected that with 'dont you mean, in branch error'. We are now waiting on a copy of my flatmates credit report to confirm Bank of Scotland are liable so they can amend her credit report.

Problem now lies with the following:

We have been declined for the best 5 rates in mortgages, all because of HBOS. Been told that with an ammendment in place, we can re-apply but our credit scoring has already taken a hard knock because of this and we are on a really tight timescale.

• How quickly can we get this sorted? any rough estimates of timescales?
• What are the possibilites of getting the sellers to give us a bit longer? I mean, is there any legal timescales that we have to stick to. We're first time buyers and needless to say 'a tad wet behind the ears regarding all things financial'
• Our financial advisor has never dealt with this scenario before, any hints or tips for him would be just as useful.
• Will the underwriters hold this against us although its not our mistake?
• Will this still be kept on record for 6 years?
• Will it definitely be recorded that its HBOS mistake, not just us haggling to amend it?
• Do we have a case against HBOS for costs and/or compensation? They have pretty much cost us the best mortgage deals on the market, the stress and additional pressure, including financial, has been extraordinarily intensified, the inconvenience for us, the sellers, the solicitors and estate agents. Surely we must be due something for this. We know of the financial ombudsman, just not sure what to say or do with that.

Any advice, hints, or tips, numbers, details, name dropping would be ideal.

Please note however, we are north of the border (Scotland) so some rules and legislations may vary, differ or not exist.

Thanks very much for taking the time to read this, I know its a pile of information and story telling but it needed to be told as I do not see how HBOS can seriously apply a default for 0.07p, and have it held against us, especially when there are people diddling the system for personal gain!

Regards,
Layla250385 & her flatmate!

TEDDYRUKSPIN

Simple. Don't think you will get any mortgage until you receive a letter from HBOS to admit that they have corrected all errors and added the word settled on the credit score.

This will take at least 1 month from correction. Good luck.

HBOS are not the only culprits. Many banks do this as well.

Good luck. Get that letter of admittance from them! Then order a credit report!

layla250385

The branch manager admitted that she could see it was their fault, but they want to see my flatmates credit report, pretty much to prove that WE were not lying.

So i know we've to sort that before anything else, wasnt sure if there was a quicker method of sorting this.

jackieb

I went into my bank last week (RBOS, not HBOS though) to get a mortgage in principle. They did my credit check there and then. I was in the bank for less than an hour in total. Surely they can do her credit check almost instantly?

UK007BullDog

No dont do any credit checks until all has been sorted and get that letter in writing from the bank as your adviser will need to supply it to the mortgage lender.

It could take a while I would think 1 to 2 months. As for the property the vendors might pull out if they are under time pressure.