£5.00 in Lloyds OD fees have damaged credit history - any advice?

[tip57]

Thanks in advance if anyone can help!

Will try to keep short:
in Jan/Feb 2014 my husband went overdrawn a few times, in a rarely used current acc which had no overdraft facility. Each time he went over, he paid cash in asap to clear it.

He ended up with a £70.00 charge in 'Unplanned Overdraft Fees' in March 2014, which he contested, and was refunded - so he believed he was about £1.00 in credit, and stopped using the account (and didn't open any more statements!) He didn't realise there was also a £6.00 'Overdraft Usage Fee' which put him overdrawn again by £5.00, which is how the account has stayed til recently.

We were hoping to apply for a mortgage soon, we've checked his credit score and Lloyds have recorded late payments from March 2014 until August 2015 when they settled the account (the balance has now been paid) We've been advised that he can't get a mortgage based on this.

I'm writing to Lloyds' Credit File Amendments to see if they will remove the record as a gesture of goodwill - in his defence we had an extremely stressful year with serious personal and family illness and other extenuating circumstances I hope they will consider.
Does anyone have any advice/experience in tackling this?

[judgemental24]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

Overdrafts are not my area but Lloyds have to give you:

A notice of "Default Sums" before applying any charges to the account under Section 86(E) Consumer Credit Act 1974

Failuer to give notice under 86(E)(1) the debtor will have no liablity to pay any sum (penalty charge or interest) under 86(E)(6)

The creditor will also be unable to enforce the agreement by virtue 86(E)(5)

[tip57]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

Thanks for your reply - the details of the fees were on his statements so I think they're covered - it was his fault for not checking them, he just assumed he was in credit

[judgemental24]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

They may well be on his statements but That is irelevant

The bank has to give you advance notice before applying any penalty charges in writing

Section 86(c) CCA 1974

http://www.legislation.gov.uk/ukpga/1974/39/section/86C

[tip57]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

Thanks for that - it seems the £6.00 may be part of the Ts & Cs of the current acc, ie a monthly charge if/when you go overdrawn - would the notice of sums apply here? I have checked out that link but can't find the answer there, sorry if that's a silly question!

[judgemental24]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

The £6.00 may well be in the T&C

But a companies T&C do not take precedent over statutory duty

That being the Consumer Credit Act 1974

Lloyds have no say on the matter

If any sort of financial penalty is being imposed for a breach of contract, notification of default sums is required under the act before they are applied

[tip57]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

Thanks, that's really helpful, I will include that in our letter to Lloyds.

If anyone has any further experience in appealing/removing records of late payments, I am all ears!

[Debt Camel]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

I don't think that argument will get you anywhere - a fee for using your overdraft is not a penalty charge.

I think the suggested approach of asking them to remove the late payment records as a gesture of goodwill is more promising.

Point out that he has been a customer for donkeys years, that the amount was tiny and that he was never sent any letter alerting him to the problem. Say this tiny mistake is having a disproportionate affect on his credit record and financial future. If you have it in writing from a mortgage broker that he is unlikley to be able to get a mortgage with the late payments showing, enclose a copy of this letter.

If they refuse, ask them to reconsider or you will complain to the Financial Ombudsman. This isn't the strongest case in the world, but they probably won't want the hassle of dealing with it.

[tip57]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

Many thanks Debt Camel, that's along the lines of what I was thinking - great idea re letter from mortgage broker, I will get that in writing.

I do agree it's not a strong case, as it was his fault for not keeping an eye on his account, do you think it's worth listing the extenuating circumstances and including supporting evidence of these, are they likely to consider them?

[judgemental24]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

The reason why they have to give you the notice is that it then gives you the opportunity to pay first otherwise it will get added to the debt and compounded by the APR

[Debt Camel]

Re: £5.00 in Lloyds OD fees have damaged credit history - any advice?

do you think it's worth listing the extenuating circumstances and including supporting evidence of these, are they likely to consider them?

Sure - can't do any harm!