Late payment recorded for current account

[Lebisquite]

Hi. I have a current account with an arranged overdraft but I do go into an unarranged overdraft sometimes. I pay for the overdraft facility and pay any additional charges for the unarranged overdraft, plus interest. All fees are always paid. However, I noticed on my file that the bank have registered a Missed Payment on my credit file. I have raised a complaint with the bank because there has never been a missed payment - they have come back to me today to say that's the only option they have to record with the referencing agency, and although they accept it's not factually correct, they are within their rights to record it as such. It's really having a negative effect on my credit file and seems unfair as they are always being paid for the overdraft I have - I have never missed a payment Is it worth me trying to pursue this to have their comments removed from the credit file? Thanks for any thoughts.

[echat11]

Hi LEBISQUITE

Welcome to LB

Banks are banks and do pretty much what they want, regardless of your business with them.

No doubt they will refer you to their T's and C's. If you've raised a formal complaint following the complaints procedure on there website, you've received a final response / deadlock letter, you could consider raising a complaint with the FOS. The bank are essentially punishing you twice for going over the agreed overdraft limit, the charges / interest and the markers on your credit file.

[R0b]

I’m not convinced they are legally entitled to report a late payment marker for an unarranged overdraft, and they accept it’s not factually correct so I’m struggling to understand why they are entitled to report something that is incorrect.

A late payment marker would indicate that that you agreed to repay something by a certain time but failed to do so and as such, you were late. That doesn’t apply to unarranged overdrafts.

As echat has mentioned, you can follow this through with the FOS or you can skip them and consider legal action. Your claim would be breach of data protection act 2018 / UK GDPR on the basis that the bank have reported inaccurate information to credit reference agencies.

The GDPR states that the onus will be on the bank to prove that what they are reporting is factually accurate, which in your case I not sure how. There is a Court of Appeal case (grace v black horse) to support your position where the court basically said that if you are going to report something to reference agencies then you need to use the correct marker. If there is no correct marker for what you are reporting, then you shouldn’t report anything.

You should be entitled to compensation but don’t expect a massive payout. There’s no hard or fast rule as to the amount of compensation but I think a good starting point would be in the region of £500 and the longer it carries on the more you could argue for since the damage is continuing.

[Lebisquite]

Thanks for your reply. I have requested the recording of the telephone call I had with Lloyds - the complains manager stated it is "ridiculous that they have to report it that way but that's the only option they have". I got referred to their T&C's which apparently state that they have a legal obligation to report to credit reference agencies - but I can't see how reporting incorrect information is better than not reporting at all! Should I inform the bank I will be starting legal action (and reference the black horse case) and request removal again / compensation, or just press on with it? Many thanks .

[R0b]

It's entirely up to you if you choose to pursue this or not, but I know I wouldn't be happy allowing it. If you are going to start any legal action you need to comply with the pre-action protocols which is to send them a letter before claim outlining the allegations and how you want them to rectify the problem. I suggest you do some research into starting the process so you are familiar with it rather than a deer in the headlights.

Once you are familiar, then you can come back to us when you're ready and we can assist you on the next steps. You should only do this if you are willing to give 100% commitment to this. If you go in half hearted you will likely be on the back foot, miss deadlines and possible be liable for costs against the other side.

The link to the court case is here: Grace & Anor v Black Horse Ltd [2014] EWCA Civ 1413 (30 October 2014) (bailii.org) and the key section that supports your case is discussed at paragraph 38:

38. As for the second submission, I have not been persuaded that the shortcomings in the CRAs' registration systems can excuse a registration which is in substance inaccurate because of an omission (namely that the 'default' related to an unenforceable agreement). If an accurate registration cannot be accommodated, then the answer is for the industry to change its registration systems, and in the meantime for inaccurate registrations not to be made.