Unauthorised overdraft, or is it?

[n20998]

Hi, not sure where to put this so hope here is ok. Also struggling the explain the issue, but I'll try...

I had a basic bank account with Barclays, with no overdraft. Last year I challenged some transactions under the VISA chargeback scheme. Barclays refunded the money to my account, but a few weeks later reversed the transactions. I had removed the money from the account (and spent it) so the account was left with a balance of -£3,500.

I complained to Barclays about this. There were several mistakes; sending 30+ letter asking for me to respond, not sending a letter saying the refund was provisional, raising the chargeback using the wrong reason code, not dealing with the complaint properly (closing the complaint without looking at it) etc.

Barclays gave me a small sum in compensation. I've been to the financial ombudsman who say this was fair. I've asked for a full ombudsman decision and awaiting the decision.

My questions are about my position now. This balance is being called an overdraft and showing as a negative balance on my credit file. After the ombudsman decision (I'm not optimisitic) I'm pretty sure they'll default the account as I don't have the money to pay it back.

Can they do this? Part of me thinks that as I didn't have an overdraft, or credit agreement for such and with it being a basic bank account it shouldn't be treated as an overdraft. I asked the adjudicator to ask Barclays to allow me to make a payment arrangement and not have the negative balance recorded on my credit file as a gesture of goodwill due to Barclays' errors in dealing with this case, but Barclays refused.

Any thoughts on this? I have no idea what options I have.

[Kati]

Re: Unauthorised overdraft, or is it?

[MENTION=48934]Debt Camel[/MENTION] ... any ideas??

[Debt Camel]

Re: Unauthorised overdraft, or is it?

This all seems a bit premature. You are guessing you are going to lose at the ombudsman level then guessing what Barclays will do.

I can't really comment on the complaint except to say it sounds unusual. Without any idea about the case, I can't make a guess at what a fair representation of it on your credit record would be.

[n20998]

Re: Unauthorised overdraft, or is it?

Hi Debt Camel

Thanks for the reply. Not sure if I was clear before - I've already lost at the adjudicator stage (they said the compensation offered by Barclays was fair). On my credit report it's already showing with late payment markers. I can't see them doing anything other than default as they were unwilling to agree to what I asked (payment agreement and not showing on credit report).

I'm really looking for some general advice about being in an 'overdraft' position despite not having an overdraft provision or signing a credit agreement for an overdraft.

Would I be able to send you something privately? I'm a little hesitant to spill all of the details on an open forum.

Thanks

[des8]

Re: Unauthorised overdraft, or is it?

You don't have to sign a credit agreement to get an unauthorised overdraft,
Essentially funds were withdrawn from your account when the account did not have sufficient funds, nor did you have that facility.

THe bank will argue that this has occurred because having authorised payment by debit card, you then activated a chargeback.
This was represented by the merchant and it has been decided that the merchant was correct.
The fact the bank made certain (minor) errors in handling the matter does not change the fact that your account is overdrawn.

What were the grounds for the chargeback?
Do you think you could recover the money from the merchant via the courts?

[n20998]

Re: Unauthorised overdraft, or is it?

Hi, sorry for the delay in coming back.

The grounds were complicated...honestly I'm not sure if I had much of a case. Very difficult to recover money from the merchant through the courts. That's not a route I'm thinking.

Really, I'm just looking to minimise the damage at this stage.

If I enter into a repayment plan without the balance defaulting, I'm guessing it'll be on credit file until it's paid off...and 6 years after that? If it defaults then that's bad. I just don't want this to kill my credit for a long time. I've had a lot of debt problems, mental health problems etc. but the last 2 years have been fine. It's like starting at square one again. Any approaches I could take to try to get a reasonable outcome here?