People often ask what happens to their credit score if they make a complaint. And what happens if they still owe a balance on the account. Here are some typical questions:
” Lloyds increased my overdraft limit several times a few years ago when I had a gambling problem. But I have recovered and am hoping to get a mortgage soon. I don’t want to complain if it will it harm my credit score, which is now looking pretty good.”
“I asked Lendable if I could pay less but they said this would be reported on my credit record so I am trying not to do this. If I make an affordability complaint will that hurt my score? “
“I still have the Tesco loan and Virgin credit card accounts open, will this claim have any impact on them? “
” I still owe another year on a 118 loan. Is it best to finish paying which will be hard or complain now?”
“I have a payment arrangement for a credit card. If I complain will they stop the arrangement?”
For details of affordability complaints, with a template to use, for the different types of debt, see:
- refunds from a loan;
- refunds from a credit card or catalogue where your limit is too high;
- refunds of interest and charges on an overdraft.
But the answers to these sort of general questions are much the same for all types of debt, although there are sometimes complications for car finance.
Contents
Making a complaint and your credit record
The complaint itself doesn’t show on your credit record
Sending the lender an affordability complaint doesn’t hurt your credit score or show on your credit record.
The only lenders that can see you have made the complaint are the lender you complain to and any other lenders within the same group. So if you complain to Barclaycard that they have increased your limit too high and you bank with Barclays, you should assume your bank knows about the complaint.
What about a future mortgage?
You should avoid applying for a new mortgage to a bank you have made an affordability complaint to. This also applies to different parts of the same group. So after complaining to Lloyds about an overdraft, don’t make a mortgage application to the Halifax.
This is just common sense – there are plenty of other mortgage lenders out there, so why take this risk? If you are using a mortgage broker, tell them about this part of your history, as they can’t see it on your credit record.
But you do NOT need to worry about making a complaint to a bank you already have your mortgage with.
All the major lenders, covering 97% of the mortgage market, have committed to letting customers who are up to date with mortgage payments to switch to a new fix without another affordability test. So when your current mortgage fix ends, if you just want a new fix for the same mortgage (same amount, same term etc) then this should be fine.
Win a complaint and negative marks are removed, so your score may improve
When you win a complaint, any negative marks are normally removed from your credit record.
As the Financial Ombudsman says:
We’re likely to tell a lender to make sure their customer’s credit file doesn’t have any adverse information recorded about the loans where we’ve identified proportionate checks would have shown that the borrower couldn’t sustainably repay the loan.
If a lender has accepted your complaint, you need to check that this includes cleaning up your credit score.
Can you stop paying when you complain?
Stopping paying a debt & your credit score
Making a complaint doesn’t put the debt on hold. You are not automatically allowed to stop paying it while the complaint is considered.
If you stop making the normal payments to the debt, this is very likely to result in missed payments and then defaults. Or to a payment arrangement being recorded on your credit record.
So if you can afford to make the repayments it’s a good idea.
Every payment you make will either reduce your balance owed or increase your cash refund, so you won’t lose out by doing this.
(There is an exception here if the lender has gone into administration – then carrying on paying may mean you get a lower refund. Ask in the comments below if you think this applies to you.)
When you can’t afford the normal payments…
If you can’t afford to make the normal payment, without borrowing more elsewhere or getting behind with bills, then it’s usually best to ask for a payment arrangement or say you can’t pay anything when you make a complaint.
This will damage your credit record but that may be temporary, as the negative marks will be cleaned if you win the complaint.
If you borrow more to try to carry on making the payments, then you may then get into problems with another debt and end up in a worse position. For example, if you win your complaint about a loan in the end, but your credit card payments have now got too high winning the loan complaint doesn’t sort out your credit card problem…
So in most cases it’s better to confine the problem to the debt you are complaining about. Don’t let it infect the rest of your finances by struggling to make unaffordable payments.
If you aren’t sure what to do, talk to National Debtline on 0808 808 4000 and tell them you are looking at affordability complaints. They can help you decide what will work best for you.
Car finance is a priority debt
With a secured debt such as car finance or a logbook loan, if you stop paying the lender may repossess your car. These secured debts have to be treated as a priority, so you should pay them even if you do get behind with other non-priority debts.
Again talk to National Debtline if you are struggling to pay priority debts or are unsure what to do.
Is it best to wait until a debt is repaid?
No!
It is good to complain as soon as possible (except sometimes for car finance, see below). The sooner you complain:
- the easier it is to get information from your credit record and bank statements to help with your claim;
- the sooner your problem is solved! You will not get more money by delaying a claim.
Also some lenders seem to make better offers to settle an outstanding balance rather than a loan that has been repaid.
You can still complain when the debt is cleared. I am just saying there is no reason to wait for this.
Will a complaint affect a DMP or payment arrangement?
These aren’t affected by making a complaint. The lender won’t suddenly decide you have to pay more, or start adding interest which they had stopped.
This has never been a problem in practice.
Being in a DMP is a very good time to make a complaint as you are in a safe financial situation. If you win the complaint your balance will drop so the DMP will end sooner.
Will getting a refund affect my benefits?
A refund is treated by the benefits system as more money in the bank, not extra income that month. So there is usually no impact on Universal Credit or other benefits affect unless the refund is very large, leaving you with over £6000 in the bank.
Ask a question in the comments below if you are unsure.
How refunds work when you still owe money
Will my bank close my account when I complain?
This is a common worry. But it has been very rare.
One customer said Santander closed her account when she made a complaint about the overdraft affordability, but other Santander customers haven’t had this problem.
If you are worried, you could open another bank account so it’s there if you need it. The challenger banks – Monzo, Starling and Chase – have accounts with good apps and good budgeting facilities.
Refunds are first used to clear a balance
When you win a complaint, and you still owe a balance, the refund is first used to reduce that balance. so that overall you only have to repay what you borrowed.
Here is a simple example.
If you have borrowed £2,000, which became £2,700 with added interest and you had paid £2,300 so far, with a balance remaining of £400, if you win the complaint the balance is cleared and you get a cash refund of 2300-2000=£300.
You can’t usually ask to have all the refund in cash and to be able to carry on repaying the balance.
Do I have to pay a reduced balance immediately?
A similar example but earlier in the loan so you have repaid less:
If you have borrowed £2,000, which became £2,700 with added interest and you have paid £900 so far. If you win the complaint the interest is removed and the balance is reduced to 2000-900=£1,100 so you only repay in total what you borrowed.
So do you have to repay the £1100 immediately? Or just carry on making the loan repayments? No. The creditor should accept an affordable offer of repayment from you and not add on any more interest or default that debt.
In practice this doesn’t seem to be a problem and creditors seem to be reasonable about this. For example, see this comment from someone whose lender was difficult all the way through the complaint but absolutely fine about reaching an agreement on repaying the debt when the case was upheld at the Ombudsman.
For overdrafts, banks will normally reduce your overdraft limit, sometimes removing it, after your balance is reduced. Again this doesn’t seem to be a problem and most people are very happy with the result.
Car finance – when you owe a balance and want to keep the car
Car finance can be complicated. You may still get a very good result from a complaint.
But if you still have the car and you are still paying, you must read about what happens if you win the complaint before making a claim.
Often you may want to delay making the complaint until you have repaid not the whole debt but the amount you borrowed.
What if the debt has been sold?
If you defaulted on the debt and it has been sold, you complain to the original lender because they made the poor decision to lend when it was unaffordable.
If you then win the claim, the lender will sort out the balance with the debt collector who has bought the debt. Sometimes the lender gets the debt back and sorts it out. Sometimes they leave it with the debt collector and get the balance corrected. It is up to the lender which they do.
Your credit record with the original lender and the debt collector should both be cleaned.
What has happened to other people complaining about….?
The best thing to do here is to look at the comments below the specific article for your type of debt:
But your case is individual. Just because one person got a good result or a straight rejection from a lender doesn’t mean you will.
And remember that many of these cases are being won at the Ombudsman. So if the debt caused you problems and you think lender should have realised that was likely at the start, go to the Ombudsman if you get a rejection or a poor offer. Lenders are hoping you will give up!
Templates for affordability claims
Options when you cant pay bills & debts
Could a Debt Relief Order help you?
NATALIE says
Urgh – Newday! I am currently 4 weeks in to complaining about Newday for their multiple cards. Whilst I have been waiting Marbles has just gone over the credit limit because of the interest charged this month, I then got charged £12 for being over the credit limit, and today I get a letter stating that they are increasing my interest rate by 5% as I have exceeded my credit limit, and appear to be having trouble managing this financial product! How does that help me at all? Roll on the 8 week mark and I will be taking straight to FOS along with all these letters. I have frozen my card on the app for all 4 newday card and am not spending on them at all but these interest rates wipe out any monthly payment I make.
Sara (Debt Camel) says
Increasing your credit limit – did the letter say you could choose to reject this interest increase and close the account? This will allow you to pay the balance off on the old terms, you don’t have to pay it straightaway.
Also it may be a good idea to look at a debt management plan, where all your debts are included. There interest should be frozen and you make one affordable payment a month. Talk to StepChange about the details of this: https://www.stepchange.org/how-we-help/debt-management-plan.aspx. Your complaints still carry on in a DMP and winning any will really speed it up.
NATALIE says
Thanks Sara, I hadnt noticed that clause was on the second page of the letter, I will give them a ring to close the account and keep the interest “lower”
Sara (Debt Camel) says
Anyone would think they don’t want you to see that bit!
Lisa Price says
I raised an affordability claim with PayPal a few months ago. The responded that they didn’t act irresponsibly etc. I then put it forward to the financial ombudsman, but they have a massive back log so said it will take a while for someone to pick it up, but they have acknowledged it.
Last week I got an email from PayPal saying they were changing their name to something slightly different. This would be in November. My question & worry is, if they change their name/ trading company will I still be able to make this claim against them? Because technically the original company will be closed. This happened with my next account. When I put my affordability claim to the financial ombudsman they said there was nothing they could do because now next we’re trading as a different company & the original company had closed.
Sara (Debt Camel) says
What are PayPal changing their name to?
Lisa says
This is what it says. It might be perfectly ok, but I’ve got used to not trusting things now.
Notices
Issued: 24 July 2023
Transfer of Services from PayPal (Europe) S.à r.l. et Cie, S.C.A. to PayPal UK Ltd (the “Transfer”)
Subject to PayPal UK Ltd becoming duly authorised to conduct its regulated activities in the United Kingdom by the Financial Conduct Authority (“FCA”), PayPal (Europe) S.à r.l. et Cie, S.C.A. intends to transfer all services provided to its users in the UK (including users resident in Guernsey, Jersey, the Isle of Man and Gibraltar) to its affiliated company, PayPal UK Ltd, on 1 November 2023 or such other date as we may communicate to you (the “Transfer Date”) by posting a notice having immediate effect on this Policy Updates page.
What do you think?
Lisa
Sara (Debt Camel) says
I’m not an expert but I would be surprised if this affects a complaint in progress.
Sara c says
I’m not to sure about the whole process of having a loan upheld for irresponsible lending.I had a loan from 118 and they upheld my comment reducing my balance by the interest and removing any adverse reporting on my credit file only to fi d that they they sold the remaining balance to a debt collecting agency who are now asking g for the balance £650 and threatening again to put this on all credit reference companies .I am thinking g of letting them take me to court and fighting the case that as the loan was upheld for being sold irresponsibly that the credit agreement would also be null and void.
Sara (Debt Camel) says
Did you make a payment arrangement with 118?
Sara c says
They just carried on requesting the amount amount they wanted I paid the amounts they requested for two months on time then they sold the debt on.
what is worrying me is the fact that this debt is going to registered with the credit reference agencies again and the new owners of the debt will try to increase payments and hold me to the original credit agreement with I thought would be nullified as it was sold to me irresponsibly.
Sara (Debt Camel) says
Is this amount affordable for you?
Sara says
Yes they have removed it,the remaining balance is £628,and yes I was paying them after they upheld it.
I have been paying £29.72 as they requested.
Sara (Debt Camel) says
Then I suggest you talk to the debt purchaser, tell them 118 agreed this loan was unaffordable and removed it from your credit record and suggested you pay £29.72 a month, which you are happy to carry on paying.
Sara says
Many thanks .
Joelle says
Hi Sara
I wrote to you before and I have done as you advised . Barclaycard responded and said they would get back to me definitely by a date in July. The date passed and they then sent a further letter to apologise and said I would definitely hear back by today 10th August with their answer. I have not heard back and I spoke to them via chat (mainly so I can papertrail). The chat could not verify but again just apologised . My payment is going out tomorrow and I have literally just come out of hospital. If I stopped payment now would it course more problems for me ? How much longer should I give them as it is them giving me dates that they are not keeping to ? I appreciate it is by post but i would have thought they would be concious of this. Should I now take to ombudsman or still wait ? Thank you for your help on this.
Sara (Debt Camel) says
what date did you complain to Barclaycard?
did you talk to Stepchange about a debt management plan?
Joelle says
6th July and no I didn’t contact Stepchange.
Sara (Debt Camel) says
Barclaycard have 8 weeks to reply to your complaint. You cant go to to the Ombudsman before then unless Narlaycard have rejected the complaint.
I still think you should talk to Stepchange about your options.
Joelle says
Ok many thanks Sara for your advice. I will give it until end of August unless they reject it.
John says
Hi i put in irresponsible lending claim with New Day and its been 14 weeks still not had a response back only at 8 weeks they need more time so i refered to FOS and this is what they have replied with
Your complaint about NewDay Cards Ltd trading as Burton
Thanks for getting in touch with us. We’ve contacted NewDay Cards Ltd to tell them about your complaint – so they have a chance to put things right for you first.
NewDay Cards Ltd should get in touch with you soon. If you need to get in touch with them, their contact details are:
NewDay Cards Ltd
7 Handyside Street
London
N1C 4DA
Next steps
NewDay Cards Ltd should give you their final response to your complaint – in writing – within eight weeks at the most.
At this stage, NewDay Cards Ltd should also let you know that you’ve six months from the date of their response to come back to us if you’re not happy.
We won’t take any further action unless we hear from you again – and I hope NewDay Cards Ltd can resolve things for you.
What does this mean as i have waited longer than 8 weeks ?
Sara (Debt Camel) says
Go back to FOS and tell them date you submitted your complaint to New Day
John says
I did say in my initial email it had been longer than 8 weeks its had been 3 months and got this reply
Sara (Debt Camel) says
yes, someone didnt read your initial email carefully. Go back to them and point this out.
John says
Ok thank you, will update you with my final response from new day or from fos
Lee says
Hi Sara, I am looking for some advice. I have drafted an affordability complaint to Nationwide regarding multiple large loans they gave me between 2017-2019, at the time I had a gambling issue and kept topping up my loans alongside utilising other credit. I have already claimed on the overdraft against Santander successfully thanks to you.
My concern with Nationwide is that they are my mortgage provider, they provided me with the mortgage around the same time as the loans on my file and therefore wondering if this could lead to them reviewing my mortgage once I raise the complaint regarding the loans. The mortgage up to date with no arrears other than the COVID holidays , however the mortgage will be up for a new rate within 12 months.. They are one of a few that mortgage on shared ownerships so don’t want to rock the applecart, at the same time i do feel they were irresponsible in allowing me to heighten the loans within short periods of time . Hope this makes sense and look forward to your response with any guidance.
Sara (Debt Camel) says
Did your gambling show on your bank statements?
Lee says
Yes they were , lots of transactions showing throughout. Some transactions name the bookmaker , however I was using PayPal also in order to try and disguise the gambling , so some show as PayPal with the mandate numbers instead.
Sara (Debt Camel) says
Then Nationwide would have seen these statements when you applied for the mortgage?
Lee says
Yeah, they should have . Would you not worry then making a complaint ?
Sara (Debt Camel) says
They have already given you this mortgage after seeing all the problems.
When a mainstream bank like Nationwide (who has signed up to the Mortgage Charter) has already given you a mortgage, they won’t do an affordability check or a credit check if you just want a new fix when your mortgage ends. You may have problems if you want to “staircase” to borrow more in a year. But with rising mortgage rates most people simply cant afford to do this.
How affordable will your mortgage be with a new fix?
Do you know how much interest you paid on these loans? If one loan settled a previous loan this can be hard to work out. But this is the money you could potentially have refunded if you win a claim about the loans. It’s best if as many of the loans as possible are within the 6 year period – so it’s probably not a good idea to wait a year until the mortgage fix is done as that may make some of the loans be over 6 years old.
Lee says
Hi Sara, Just double checked and this is rather complex than i first imagined. So the mortgage was given to me before the loans (8 months before the loans ). Prior to the mortgage being given i ensured that my statements were clean . I also within the first year of my mortgage had to change the deeds of assignment from joint to just my own as i split up with partner. At that time, Nationwide didn’t request to see my bank statements and as you said it was just a simple but costly switch of names , i did have to show proof of income which were payslips.
However, if your point still stands regarding affordability check not being done then i will probably proceed and make a complaint still, it will be affordable and has been since owning property however my income has decreased since they gave me my mortgage . The diffeerence being also my debts have now been wiped since giving up gambling. My concent would be that they done an afforability check upon renewal based on this complaint, and seeing my income decrease on statements i provide to them as evidence of this claim im making, however you seem to indicate this wont be the case.
Sara (Debt Camel) says
Nationwide will not do an affordability check if you only want a new fix.
See this page https://www.nationwide.co.uk/mortgages/existing-customer-switching/ which says “Information: There is no affordability check when you switch deal.”
John says
Hi,
I didn’t know which section to put this query, apologies if it’s on the wrong page. I have an affordability/settlement dialogue with a car insurance company.
The want an income/expenditure form completed which isn’t a problem, to know my debts and balances, again this isn’t a problem but they also want 3 months bank statements.
I’ve recently gained employment after being on benefits for a while. My wages go into my bank account but I don’t pay any bill from it. I live with my brother and I give him cash for my share of the bill/rent etc and he pays it.
I’m worried because my bank statements don’t match what I have put on my income/expenditure form. I have a some transactions for the pub/buying clothes etc. I’m worried they’ll think I’m lying and don’t have any outgoings.
What exactly are the insurance company looking for on my bank statement and can I blank transactions out and just show my wages going in and the end of month balances?
Thank you for your help.
Sara (Debt Camel) says
have you made an affordability complaint? if you have, then supplying 3 months bank statements before the application is a normal way to show the loan was unaffordable. And the Ombudsman will ask for these.
But if you are being asked for current bank statements, that is NOT relevant to an affordability complaint but may be to other issues?
Clothes is a normal expenditure that should be on an I&E. Going down the pub – your are not expected to live like a hermit.
John says
Thanks for your reply.
It’s not an affordability complaint as such. I have a debt to the insurance company over a claim against me and I’m trying to come to a settlement. They said to consider my settlement offer they need to see the previously mentioned paperwork.
Very little on my bank statements matches anything I have said on my income and expenditure form. I’m concerned that they’ll think I’m lying when I’m not, I pay my brother cash for my share of the bill but not always consistently on the same dates.
I was hoping it was acceptable to send 3 months worth of bank statements showing my wages going in and the balances but black out irrelevant transactions.
Sorry once again if this is in the wrong section.
Thanks
Sara (Debt Camel) says
No problem – it’s just if had been an affordability complaint there was a simple answer.
You cannot make a creditor agree a settlement amount – if you are trying to show that it is reasonable because you can’t afford to make regular payments, then showing your bank statements are normal way to demonstrate this. If a lot of your payments are in cash, they should understand that. And if your forgot to put clothes on for your expenses – well everyone needs some clothes.
NATALIE says
Hi Sara
I have put a complaint in with Newday for 4 cards, that they have not yet responded to and am due to take to the FOS at the end of this week. My parents have kindly offered to lend me the money to clear all the cards, and I can pay them back (if Newday/FOS come back with refunds I can do this quicker) my question is if I clear these cards off will Newday/FOS disregard my complaint as I have cleared the cards when I have put in an affordability and irresponsible lending complaint?
Sara (Debt Camel) says
No, you can pay off the cards and still continue with the complaint. In the FOS complaint put that you have just cleared the cards because your parents have given you a loan to do this – this does not make the cards affordable!
NATALIE says
thank you once again Sara
Jackie says
Hi if I made an irresponsible lending complaint 3 years ago which was not upheld, can I submit another irresponsible lending complaint about the same loan but maybe through a CMC?
Sara (Debt Camel) says
No.
Not unless the complaint has changed – eg for an overdraft you can now complain about the last 3 years. Or if a credit card has increased your limit since then, you could complain about that.
Kayleigh says
I just wanted to say a massive thank you!
I used this post and your templates to complain to most of my creditors.
It’s still being looked into with 3 of them but I just had a response from Barclaycard, who have upheld my complaint and are removing over 2/3 of my outstanding balance.
They’ve also agreed to remove their entry on my (currently very bad) credit file.
I couldn’t have done it without this website!
Sara (Debt Camel) says
Good news!
Make sure you download a credit report now showing the Barclaycard – if any of your other complaints have to go to the Ombudsman, you want a credit report with all your borrowing showing to be able to send to the Ombudsman.
RS says
Has anyone received any updates on Piggy Bank?. My affordability complaint was submitted and accepted in February 2020. I was fully aware that they were in administration at the time and cannot believe that this has still not been resolved over 3 years later.
John says
Hi Sara I have a couple of questions I would like to ask you please. First one is what part do I have to fill in to claim tax back on a r40:form for ppi from provident loans from 2020/2021 please. And I was had a loan for about £2000.00 then increased it too about £7000 from the bank for gambling issues I had.and still do. And also an overdraft they let me have for 4000.00. I’m still paying the loan back monthly.and the overdraft I still owe the £4000 even tho I have had them both about nearly 2years. But I have had some pension back. So can I claim anything back off my loan and overdraft with money in my account ? Thanks John b
Sara (Debt Camel) says
I don’t think provident ever charged PPI?
You can look at making an affordability complaint about the bank loan and top up – see https://debtcamel.co.uk/refunds-large-high-cost-loans/
And about the overdraft – see https://debtcamel.co.uk/get-refund-overdraft/
Having taken money out of your pension isn’t relevant.
John says
Hi Sara. Sorry I didn’t mean ppi I think it was affordability.as I had lots of loans with them. And had a refund when I took it to the ombudsman.on which the tax man had 20% out of my refund. Will I be entitled to claim that 20% back with a r40 tax for ? And what part do I fill in if I can claim it back. Thanks John
Sara (Debt Camel) says
ok! yes you can, see https://debtcamel.co.uk/ppi-payday-refund-get-back-tax/
Leigh says
Hi, would appreciate any suggestion of what I should do/say next. Littlewoods still haven’t settled my complaint, even though date they were advised to settle was nearly 2 weeks ago. The adjudicator sent an email to Shop Direct then advising them to deal with adj advised they allow 2 weeks for them to respond but if nothing by end of thisweek he’d send another chaser email. He also said that apparently shop direct have a backlog of complaints to deal with. However my opinion is if just another ‘chaser email’ is sent then shop direct get another 2 weeks to action and it will just repeat. Can I ask to escalate or should I just wait it out. Thanks Leigh
Sara (Debt Camel) says
you could ask for this to be escalated but FOS prefers to get things sorted out at the adjudicator stage where possible. They are only 2 weeks late.
AG says
Morning Sara,
Looking for some advice – if possible.
I have made two claims to previous banks that I have had overdrafts with – Bank of Scotland and Royal Bank of Scotland. It can be evidenced that I utilised my overdraft and arguably it did cause me further financial difficulty. However, they are outwith the claim timescale; that is the feedback from the banks. The Ombudsman asked for further information which I provided them with and they have said because I have previously raised complaint with the bank directly, they do not feel it merits exceptional circumstances. Although I am accepting of their points, I do not think that banking institutes raise enough awareness of their role in lending including irresponsible lending. I was unaware of the banks role in ensuring they only lend responsibly and have always accepted full responsibility for my financial predicaments. This was up until I came across your website and I have raised claims with many banks and credit cards recently following reading guidance on your website.
Can you advise if it is worth me challenging the decision of the ombudsman being unwilling to further investigate my complaint, or whether you feel this may fall on deaf ears?
Any help would be appreciated.
Thanks.
Sara (Debt Camel) says
what was the previous complaint about?
AG says
“The Royal Bank of Scotland has said your complaint was made too late – as it was outside the time limits set by the FCA. So, I’ve looked at whether they’re right about the time limits.
In your case, that means looking at whether your complaint was made within six years of the date of the event you’re complaining about. Or, if it gives you more time, within three years of when you were aware or ought reasonably to have been aware you had cause of complaint.
Six year part of the rule
From the information we’ve seen, your overdraft was applied on 6 September 2016 – which is more than six years before you first made your complaint on 12 June 2023. So, under the first part of the rule, the complaint was made out of time.
Three year part of the rule
We consider the three year time limit in two ways. The first is based on when you told us you knew you had cause to complain and the second is based on when the facts of the case tell us you ought reasonably to have been aware you had cause for complaint. If one of these dates is more than three years before you complained, I’m sorry to say we can’t look into things for you.
Part of your complaint is about the overdraft being approved whilst you were in a poor financial position, and you said the fees caused you further financial difficulty.
You applied for this overdraft in September 2016 and from reviewing your bank statements, I can see you began to utilise the majority of it and go over the limit soon after this date. The statements show you exceeded the limit in early December 2016 and in January 2017. You were then consistently making use of the overdraft throughout 2017 up until it entered collections in December 2017. Following this, on 2 January 2018 after receiving a letter concerning your overdraft, you explained you were in a poor financial situation because of the debt you were in following being a student.
I therefore do think you had an earlier point of awareness then when you made a complaint on 12 June 2023. I say this because I can see RBS made a change to your lending by providing you with an overdraft in September 2016 and soon after this was approved you began to struggle with managing the account within the limits. As these issues continued for the majority of 2017, I think it’s reasonable to say you ought to have been aware RBS may have done something to cause you a problem in potentially providing you with the overdraft, which seemed to be causing you struggles in affording it.
As you discussed the difficulties in January 2018, I think this is the latest point you had cause for concern about you situation, which relates back to from when the overdraft began.
As three years from 2 January 2018 is 2 January 2021 which is less than six years from the event you’re complaining about only the six year part of the rule applies – so you had until 6 September 2022 to complain.
Sara (Debt Camel) says
I suggest you go back and say that RBS has failed to review your overdraft for affordability. Say it is your understanding that it is good practice for a bank to review overdrafts annually, so you are complaining that for all of the annual reviews which should have taken place, either there was no review at all or it reached a manifestly wrong conclusion. So you are complaining about each of the reviews in 2017, 2018, 2019, 2020, 2021 and 2022 and that these years therefore fall within the “6 year rule” part.
Ask for this to go to an ombudsman if the adjudicator doesn’t change they mind.
AG says
Thank you for your help Sara. I have added nine parts to the complaint – not sure if you’ve seen them all. However, if you have – would I be suggesting the same for the Bank of Scotland account also?
Sara (Debt Camel) says
It would have been simpler if you had just summarised them :)
Was there any difference for the BoS situation & adjudicator decision?
AG says
From the information provided, Bank of Scotland have told us your overdraft has not changed in the six years prior to you raising this complaint. You made the complaint about the lending of your overdraft on 12 January 2023 – more than six years after the overdraft applied to your account. As these you would’ve been notified to you around the time your overdraft was being applied, I think that you knew enough to decide whether you thought this was excessive/unfair/or keeping you in debt. As this is the case, I don’t think that three years from when you were aware (or you ought reasonably to have become aware) you had reason to complain provides you with longer and I think you complained about your overdraft applied to your account too late.
We can look at a late complaint if exceptional circumstances were responsible for this. I’ve thought about what you’ve told me, but I don’t think what you’ve told us about are exceptional circumstances. Although you have said you didn’t know you could complaint until you discovered the debt camel website, Bank of Scotland have provided evidence which show on the 8 January 2016 you raised a complaint about the charges applied to your overdraft. You said that these charges were against the lending and banking code of conduct. Based on this information I believe you were aware there was a problem.
Sara (Debt Camel) says
Ok then much the same reply except replace the bit about it “being good practice” with saying that it is your understanding that BoS overdraft terms and conditions say they should review the overdraft annually for suitability.
Sara says
Hi sara hope you can help I had a unafordable lending complaint upheld by 118 money theY refunded all interest paid on the account and I have since been paying of the remaining balance of around £400.I today received a email stating they are reintroducing interest on the account can they do this or do I need to take this complaint up with the fca.
Kindest regards
Sara (Debt Camel) says
How long will it take you to clear this debt?
Sara says
They have been asking for a payment of around £10 since they upheld the complaint.
Sara (Debt Camel) says
Then if you have been paying what they have asked for, go back and say they can’t start adding interest send another complaint if they persist.
Danii says
Hi,
A couple of questions from me and also wondering if I could get some help for a reply to the FOS?
I had 2 complaints – barclaycard and shop direct.
Barclaycard was assigned first and the investigator has just said he’ll be in touch but has everything he needs – does this mean he is accepting the claim even though it’s older than 3 years?
I ask because below is first email from a different investigator for shop direct asking questions around the timing.
Could I get some guidance please on how to answer these? .
Sara (Debt Camel) says
Barclaycard when was the account opened and when were any limit increases?
SD – what are the questions? There are several different variations.
Danii says
Barclaycard was opened in 2001. They’ve sent me 100s of pages of statements not in date order so I can’t be sure of the exact dates of increases but I went from £5000-£9700 between 2011 and 2018. Until I decreased the limit.
Sara (Debt Camel) says
Well it would be unusual for Barclaycard not to object as the claim is too old. You may yet get asked questions about this
Danii says
Ok thank you (on barclaycard) . SD response from FOS below
To help me to understand whether this is a complaint this service can look into, please let me know:
When you realised the account was causing you a loss or financial difficulty
What prompted you to make a complaint
When you realised SDFC actions (or its failure to act) might have caused the loss
Are there any exceptional circumstances I need to be aware of, which may have stopped you from complaining sooner?
To aid my investigation it would be helpful if you could let me know whether you discussed your financial difficulties with SDFC at any point and provide any evidence you might have to support this it would be really helpful
It would also be helpful to understand how the charges and interest impacted you financially up to the account closure. For example – were you able to maintain payments for things like rent or mortgage payments and utility bills.
I was always able to pay my other bills as I always prioritised those. I live alone with minimal family support so didn’t want to end up homeless. So I don’t have any proof of that. But I was being hit by late charges and fees by Very and other companies I was in debt to at the time. I do have my old bank statements and I have provided the FOS with my Very statements going back to 1999. I don’t recall asking Very for any help. I did reclaim PPI and that’s how I was able to eventually shut the account down
Sara (Debt Camel) says
Some ideas – make sure they are really right for your case!
“What prompted you to make a complaint”
Just give details about and when how you found out what an affordability complaint was. Did a friend tell you , did you see an advert for a claims company on Facebook or Instagram and that prompted you to research, did you see A newspaper article, whatever….
“When you realised SDFC actions (or its failure to act) might have caused the loss”
I thought the amount I was having to pay Very was high but that was because I had bought too much. I didn’t think of this as a loss at all, just something I had to try to juggle my money each month to pay.
“Are there any exceptional circumstances I need to be aware of, which may have stopped you from complaining sooner?”
Most people say No. this is if you were In hospital or prison or had a major health problem or domestIc violence problem for many years.
“To aid my investigation it would be helpful if you could let me know whether you discussed your financial difficulties with SDFC at any point and provide any evidence you might have to support this it would be really helpful”
you don’t think you did so just say this
“It would also be helpful to understand how the charges and interest impacted you financially up to the account closure. For example – were you able to maintain payments for things like rent or mortgage payments and utility bills.”
Say what you commented – I was always able to pay my other bills as I always prioritised those. I live alone with minimal family support so didn’t want to end up homeless. So I don’t have any proof of that. But I was being hit by late charges and fees by Very and other companies I was in debt to at the time.
And Add to this that your other debts were increasing during this time, so you were having to borrow more to keep paying Very.
Say you only Managed to clear the Very debt with a PPI refund in (year) and you closed the account as you dudn Want to fall back into that debt again. But at that point you had No idea that Very had done anything wrong by increasing your limit to such an unmanageable level and you still thought it was your fault for buying too much.
Danii says
Thank you so much for the help Sarah! I will get on that reply to The FOS.
John says
Morning Sarah.is there anyone you could recommend to help fill a r40 tax form please ?
Sara (Debt Camel) says
It’s not that difficult! See https://debtcamel.co.uk/ppi-payday-refund-get-back-tax/
LJ says
Hi Sara,
I have a quick question:
In one of the sections you say ” You should avoid applying for a new mortgage to a bank you have made an affordability complaint to.”
Is there a specific amount of time for this?
I have put an affordability complaint to MBNA who I have now found out are part of the Halifax group ( who my current mortgage is with) and a fix ending in March. I know as part of the mortgage charter it won’t affect me doing a product switch but in 4 years or so I will be looking to move will the affordability complaint still be an issue then?
Thanks
Sara (Debt Camel) says
I don’t think so. But there are a many more lenders around, so why risk this?
LJ says
The reason I ask and sorry I missed this off is because I have an affordability complaint in train with Barclaycard and thought it would considerably narrow the market as the Lloyds/Halifax group is so large and Barclays it doesn’t leave any more.
I guess you don’t think this is the case and there are enough other lenders out there?
Thanks
Sara (Debt Camel) says
Here are the largest 10 mortgage lenders last year:
Lloyds/Halifax £52.7b
NatWest/RBS £41.5b
Nationwide £37.8b
Santander 35.7b
Barclays £29.7b
HSBC £27.5b
Virgin Money £10.5b
Yorkshire BS £ 9.8b
Coventry BS £ 8.9b
TSB £ 7.0b
Skipton BS and Leeds BS also lent more than £5bn each.
LJ says
haha point taken thank you there are plenty more lenders in the sea
AD says
Hi Sarah,
I complained about a loan with 118118 and this below was the response. How should I reply?
“Thank you for taking the time to contact us. We have now investigated your complaint fully and would like to apologise for the inconvenience this may have caused you.
We understand that you are unhappy that we approved your loan application; you feel that we were irresponsible in doing so.
Whilst we do not agree that the loan was provided irresponsibly, based on the information you have provided in your complaint, we can appreciate that you may have suffered an element of detriment or inconvenience and as such, we would like to offer you a goodwill payment in full and final settlement of the complaint.
The goodwill payment would be a redress payment of £260.00 that would be paid to your bank account. Please reply to this email confirming your bank details (account number and sort code). The payment will be with you within 14 working days.
Please note the offer is being made in full and final settlement of the whole complaint and of all disputes and matters arising from or connected to the complaint.
Please note that this is our final response. Your client has the right to refer your complaint to the Financial Ombudsman Service, free of charge.
Sara (Debt Camel) says
did you use a claims firm???
AD says
Hi Sarah,
No I done it myself.
Sara (Debt Camel) says
Well the last sentence in the letter, referring to you as someone’s client, suggests you were sent a standard template reply.
So tell me about this debt.
How much did you borrow? When? how large were the monthly repayments and how much did you repay in total?
Also what was your financial situation when when you took out the loan – what would 118 have seen on your credit record – recent payment problems? increasing levels of others debt? heavy overdraft usage?
LB says
Hi Sara,
Do I have grounds for an affordability claim? Been with HSBC for the last 19 years (current account & a business account). My business was running well until the pandemic which wiped out a lot of my income. Not been able to take much of a salary over last few years – which has led me into financial difficulty.
I have a £2000 overdraft with HSBC which I have been in for the past 2 years at the limit. I have barely used this account as I have been working abroad for last 6 months & looking after unwell relatives there too. Only payments in over last 2 years have been from my mum & my grandad sporadically. Only payments out have been interest. As I was away I didn’t receive the correspondence from HSBC regarding the closure of my account & default notice. Been struggling to pay my business bounce back loan – things were just about to turn around. Overdraft fees total £885.04 since the beginning of 2022 when I entered my overdraft. Fees took me into unarranged overdraft & they have closed my acc.
I changed phones and my HSBC banking app wouldn’t work from abroad – so I couldn’t monitor my account during this period & had no idea the fees had increased so much, regardless I couldn’t afford to keep up with these payments.
Do I have basis for a claim here? I may be able to borrow more money from my family to pay this off but am devastated that it’s impacted my credit rating and am wondering if I have a chance.
Thanks
Sara (Debt Camel) says
I think you should talk to Business Debtline about your full situation including not just this overdraft but the bounce back loan https://www.businessdebtline.org/.
Danii says
Hi Sara,
I have a complaint in with FOS for shop direct (very). FOS have asked for bank statements for 2007 to 2012 which I think I have. But they have also asked for my credit record. I’ve gone back to ask if she means for now or for 2007-2012 – because I don’t have that and thought most credit reference agencies only hold 6 years. Is there a way to obtain old credit reports if that’s what the FOS are asking for?
Sara (Debt Camel) says
No you cant get an old credit report to be produced now. If you happen to have kept an old one, you can show that. Or if you have any paper records or emails referring to you opening new accounts, or defaultimg or missing payments you can pass those on.
AG says
Hi Sara – looking for some advice. I made complaint to Barclays about a credit card, which has been escalated to FOS. Barclays have advised that they are unable to investigate – sold in June 2016 – as it is falls out with the 6 year rule.
FOS have reviewed and have sided with Barclays. The reasoning for upholding Barclays decision is due to me emailing the CEO in APR 2018 requesting financial support – I queried whether Barclays would consider a loan on a manual decision as opposed to computer generated, reason for this was due to defaults on my credit file. May 2018, CEO office replied to explain that lending is heavily regulated part of their business and they were unable to influence or amend the processes in place to ensure they behave as a responsible lender. Additionally, they noted that a full application would be required to allow them to make a decision on whether a loan could be maintained and repaid.
FOS have deemed that my email to the CEO demonstrated that I had an understanding on how credit is assessed and the impact of defaults as I requested a manual decision which showed my understanding of credit scoring. I ought to be aware of my right to complain about the Barclaycard in 2018, so more than 3 years have passed since then.
I do consider the points made by the FOS; however, without this website, I would never have become aware of my right to complain about affordability.
Have you any suggestions on how best to respond to the FOS?
Sara (Debt Camel) says
I suggest you reply that you donT think knowing about credit scores and asking for a manual decision implies th that you knew Barclaycard had done anything wrong in setting your credit limit so high – at that time you were unaware that a lender had to consider the affordability for a borrower – if you had known you would have made those points in your email to the CEO and would have complained at that that point. Point out that the reply from the CEO did not say the Barclaycard was affordable for you- if it had you may have thought that that was wrong and disputed it.
AG says
Thank you Sara. I have replied to the Investigator at the FOS. Dependent on their reply, I may approach for further advice. Thanks.
Marie says
Hi, I also made an unaffordability claim to barclaycard, I had a c/c from 2015 i think with a low limit £400 I think, which I used for gambling up to the point they suspended my card cos of my balance being continually at its limit, I was still making payments on it until October this year, I also used money from my current account for gambling, meanwhile I remarried and didnt realise the name change would not Inc the barclay card when i informed barclays bank, who i bank with, I applied for a 2nd card in August this year to fund my gambling habit, I was approved with an £800 limit, with which I spent £500 on gambling, along with 4 other c/Cs I maxed out which is why I applied for the card, barclay card rejected my claim on the grounds that due to my name being different on my other account it went under their radar, my 1st card was older than 6 years and only 1 card is allowed,if they had done full checks on my credit report wouldn’t my name or even the 1st card be open for them to see, that and the same bank details being used for both cards?
Ps. I have since had a gambling block put on my devices, I accept responsibility for my part and acknowledge I have to pay back the wasted money, I don’t accept barclays are being sincere.
Am I wrong?
Sara (Debt Camel) says
When was the first card suspended? Have you now cleared that balance?
When you got the second card, was gambling showing on your current account?
Rochelle says
Hi Sara,
I have just put in a complaint about irresponsible lending so now need to wait 8 weeks for a response but I am struggling financially even having set up a DMP.
I think it’s very likely my complaint will be upheld and I’ve actually paid back the original amount borrowed already. I am currently paying £7000 worth of interest.
What would happen if I just stop paying?
My credit is terrible anyway since entering the DMP as it doesn’t meet the minimum payments on the other cards, I could add extra to them to avoid defaulting and potentially any negative effect from the unaffordable loan would be wiped off with a positive result from my claim.
Is this too risky? What could they do?
Sara (Debt Camel) says
how much are you paying to the DMP? when did it start?
who is the loan from?
have you made affordability complaints against the other debts in the DMP?
Rochelle says
I’m paying £400 a month on the DMP and only 2 payments made so far.
The loan is originally from future finance but was taken over by asset link capital.
I have not made any other complaints for my current debts. There is 4 credit cards and a PayPal credit account totalling about £7000 also.
Sara (Debt Camel) says
I think you should be considering complaints about all those debts. You may feel the loan was the worst, but the others also lent you too much! See https://debtcamel.co.uk/refunds-catalogue-credit-card/
In a DMP you should hope all your debts are defaulted as soon as possible unless you expect to clear all the debts within a couple of years which is unusual. You should definitely NOT be trying to pay extar to the cards to prevent them defaulting. Defaults will clear from your credit record after a couple of years, payments arrangements or arrears will stay on your credit record for 6 years after the debt is settled… which is far longer.
I assume this loan is in the DMP? If it isn’t, then contact your DMP firm and ask to have it included.
If it is in your DMP and you are still striggling, it suggests that £400 a month is too high a DMP payment – perhaps your budget isnt realistic? Go back to your DMP firm and ask to have the payment reduced.
Rochelle says
I understand my thought was that without the loan I could pay back the other debts in less than 2 years and avoid any more damage to my credit report. Right now it’s just a few missed payments. I was under the impression that a default would also be there for 6 years and would look worse.
I will look into which debts I’d have a case with, appreciate your advice.
Sara (Debt Camel) says
A default does look worse. But you cannot relay on winning this affordability complaint. the safe thing to do is to pay all your debts from within the DMP.
Christopher says
I made an overdraft affordability complaint to Barclays. I was offered a gesture of goodwill payment of ‘£2806.13 (plus accruing interest)’. The letter didn’t define or give a value for this interest and directed to me to call a number to accept the offer. The first line call agent found my case and verified that an offer had been made. They seemed ready to action the refund but didn’t mention the interest. When I bought it up, they sounded a bit flustered and asked if I could hold on to await a callback from the complaints handler. When I queried them and asked what they meant by accruing interest they responded ‘interest that is accruing’ and that he would add on the overdraft interestcharges that were due to be charged that month to my account that couldn’t be stopped (that amount turned out to be £40.54). Am I correct in thinking this sounds disingenuous? Both he and the first agent sounded flustered and I had no follow up letter after the refund to confirm the matter and the total refund amount.
Sara (Debt Camel) says
How long does this refund go back? Do you think that is satisfactory?
Will it clear your overdraft?
I think you should ask for a response to your complaint in writing and see what that says.
Christopher says
Hi Sara,
The refund covers the last 6 years, they dismissed going back further but also stated they had the right not to conduct a full investigation if they didn’t think it was warranted. They seem to be using the fact that the charges were originally applied correctly according to their rules as a reason not to look more deeply into it, though I was clear this was an affordability complaint. Charges on the account go back to 2011 but I’ve been living up to the max of the overdraft month on month since it was a student account around the year 2000-ish. The account has been converted a couple of times with the maxed out overdraft being transferred with the conversion, so there has been ample opportunity for Barclays to suggest an alternative solution. The overdraft was £1670 and it does clear it and then some. But I feel that as a young student, Barclays led me to believe relying on an overdraft and paying the fees was normal and it never occurred to me without advice to switch to a basic account elsewhere and insist on closing the overdraft and paying down the balance. I feel this is also the reason why I didn’t complain earlier, which is the default argument for a bank not to look back past 6 years. You can’t complain if they infer they are not responsible.
Sara (Debt Camel) says
So the phrase “accruing interest” isn’t one that is often used, but to say it includes any mor interest being added this month doesn’t seem wrong.
They haven’t added 8% statutory interest because they are treating this as a “goodwill refund”. It is hard to tell what might be as it will only start from the point where you account would be incredit if the interest of the last 6 years had not been added. MY guess is it would be somewhere in the 8-16% region but I could be way out.
So you have two possible reasons to go to the ombudsman – the fact that they haven’t gone back to c 2011 and the fact they haven’t added statutory interest to the refund they are giving you for the last six years.
The Ombudsman makes rather erratic decisions on whether they can go back more than 6 years. Some people do well, others are rejected.
It’s up to you if you think this refund which has been pretty fast is overall a fair one or whether you want to go to FOS.
Rob says
Hi Sarah
I have 2 claims that are being upheld. I am currently on a DMP and wish to continue paying the same amount. My concern is that my payments to some of the lenders will be higher than the contractual amount as the 2 debts will drop off. Do you think the other lenders will start adding interest again as i am making higher than my normal payments.
Sara (Debt Camel) says
how long has your DMP been running? have the other debts been defaulted?
Hannah P says
I raised an affordability complaint to marbles. They have rejected my complaint and closed my account. It has a balance of over £5000. How will this affect my credit report and rating?
I had a payment holiday in place and payment are up to date.
Sara (Debt Camel) says
Have you sent this complaint to the Ombudsman?
You had a payment holiday in place because the payments were too high? What other problems debts do you have?
Putting them all into a debt management plan with Stepchange may be a good idea. Winning any affordability complaints will then speed up your DMP – see https://debtcamel.co.uk/7-ways-to-speed-up-a-dmp-so-it-finishes-sooner/
Hannah P says
I have just forwarded it to the ombudsman. The payment holiday was for 3months. Due to payments being too high.
I raised the affordability complaint in June for both irresponsible lending and unaffordable lending. My total debt was almost equal to my yearly earnings. The carried on increasing my credit limit when my minimum payment across my debt was equal to my wages!
My account has been closed as part of the complaint. Though I didn’t ask for this and I am worried this will have a detrimental affect on my credit report as it will be a closed account with a balance and it will affect my credit utilisation.
I had looked into a dmp as that was potentially the next steps.
Luckily my circumstances changed at the end of September as I found a job which pays significantly more and I also received an unexpected one off payment which allowed me to pay off the majority of my debt.
Closing my credit card which had a limit of £7800 with a balance of £5000 will have such a negative effect on my report. I am so frustrated. I would likely have not made the complaint had I know they would just close my account. I understand if they advise they will be be closing the account once the balance had been paid and if I could no longer use it but to close my account with a balance seems as an attack for raising the complaint in the first instance.
Sara (Debt Camel) says
This is just a temporary negative effect – credit utilisation figures correct when the balance has been cleared. Hopefully you can now clear this quickly with most of your opther debts paid off and a better paying job? Especially if you win the complaint at the Ombudsman.