Account closing and credit rating

[nackers]

Aside from the fact that you will not have had a bank account with the same bank for as long, how do we think alliance and leicester closing accounts down will impact on credit ratings?

 

I want to chase them for I would estimate £400 or so and I don't mind opening a new account (I was considering it anyway), however, I don't want a black mark added on there by alliance and leicester that could potentially be there for 6 years, what do we think?

 

Out of interest, how do we think people with mortgages etc are being affected by this?

[mailmannz]

I see there is a very short side article in todays Metro about A&L closing accounts on anyone who takes them to the small claims court.

 

I wonder though, wouldnt this be viewed as coersion...ie. the bank trying to force people NOT to go to the small claims court otherwise they will be dropped?

 

Mailman

[angry cat]

Hi-

After reading your post, I thought that I had better reply with my thoughts regarding the mortgage issue.

 

however, I don't want a black mark added on there by alliance and leicester that could potentially be there for 6 years, what do we think?

 

Out of interest, how do we think people with mortgages etc are being affected by this?

 

I have an A&L mortgage and I sent A&L the preliminary letter requested a refund of charges levied on my mortgage account and then the LBA. I then received the A&L received the 'Bog Off' letter back.

 

I know that I might sound a Wimp, but I decided to wait a while before I issue a County Court claim against A&L, basically because I am fearful about what they might do in respect of my mortgage!!! However, I am going to sell my property at the end of the year and then I will send a revised request for the repayment of charges and then issue my claim.

Re the CRA agency file, if that is messed up, then it would be difficult to obtain another mortgage.

 

I think that this issue of closing peoples accounts etc., is blackmail really and not fair or reasonable to consumers who are simply exercising their Right in requested the refund of Unlawful Penalties.

Hopefully the OFT will step in and 'Do something about it' !?

 

Thanks

Angry cat

[nackers]

The fact that they close the account doesn't really trouble me, I will be setting up an alternative before I do anything. I would however, consider a mark on your credit rating that would stay and be damaging for 6 years saying something like 'breach of contract' to be unfair, but I suspect it wouldn't be possible for them to do that as it's in a slightly grey legal area?

That this is more complicated and potentially damaging for people with mortgages with A&L, I don't know the ins and outs of transferring them to other providers (I just got to thinking about unsecured loans as well - would they ask for settlement?). But to me, I reckon it would be pretty bad business sense to close mortgages and loans, as they are much more profitable than current accounts.

Overall, I'm inclined to think that you can't have you cake and eat it, banks are not obliged to provide accounts to anyone and you can't reject the terms and conditions and expect to maintain the status quo. Unfairly high, petty and punitive as these charges were, a large proportion of them (mine included) have come about initally from our own initial mismanagement of our finances.

[caro]

From what I have learnt I do not believe any of this can have anything other than a good effect on your credit rating. If you claim charges on your current account they cannot take your mortgage away. Also, if you look at the letters in the bank templates library, they ask for removal of defaults from credit records. The charges are unlawful. Defaults caused due to unlawful charges are also unlawful. If they defaulted you for claiming what is rightfully yours, you go through the process to get the default removed. It is a win win situation. You need to get your head around the fact that you have right and the law on your side. Don't be intimidated by the banks. Have you seen the bad press A&L are getting? They don't want to make it any worse.

[nackers]

yeah, that sounds sensible, thanks for that.

my personal gripe with A&L stems from one bounced cheque which cost me £30 or something which they took out a few weeks later the day before I got paid when I never have any money left in the bank, therefore making me overdrawn again. so they took another charge for going overdrawn the day before I got paid the next month, and this went on for ages without me noticing and cost something like £400 for this one cheque. the way they handled my complaint at the time and refused to answer my questions about how they handled these charges is what has made me fairly determined to wreak some revenge!

I have to say on I think all the other ocassions apart from one when I felt the A&L charges were unjustified, they have refunded them in full, but they were one offs - now to get the big one!

[LondonPam]

A closed account will have no effect on your credit rating at all. It's simply an indicator logged against it stating it's closed. Companies will have no idea whatsoever why it was closed and they don't care. I worked in credit scoring for years and it's never taken any part in the scoring system.

[dave]

From what I have learnt I do not believe any of this can have anything other than a good effect on your credit rating. If you claim charges on your current account they cannot take your mortgage away. Also, if you look at the letters in the bank templates library, they ask for removal of defaults from credit records. The charges are unlawful. Defaults caused due to unlawful charges are also unlawful. If they defaulted you for claiming what is rightfully yours, you go through the process to get the default removed. It is a win win situation. You need to get your head around the fact that you have right and the law on your side. Don't be intimidated by the banks. Have you seen the bad press A&L are getting? They don't want to make it any worse.

 

 

Well said!

[overcharged_consumer]

A closed account will have no effect on your credit rating at all. It's simply an indicator logged against it stating it's closed. Companies will have no idea whatsoever why it was closed and they don't care. I worked in credit scoring for years and it's never taken any part in the scoring system.

 

But is there not some sort of code the bank can use to state that THEY closed it rather than you? I know banks use secret code in bank references which, to the customer looks like a good reference but between banks and lending institutions has a different meaning.

 

With regards to mortgages and loans, these are on separate agreements and they could not just withsraw your mortgage without reason. If you've kept up payments on it and aren't claiming charges back in respect of your mortgage account then they have no reason to close it.

 

Besides, as this whole thing snowballs, if banks continue to close accounts, they will eventually end up with a much smaller client base.

 

OC

[angry cat]

[quote

 

With regards to mortgages and loans, these are on separate agreements and they could not just withsraw your mortgage without reason. If you've kept up payments on it and aren't claiming charges back in respect of your mortgage account then they have no reason to close it.

 

 

Hi there,

I was very interested in overcharged consumers statement re mortgages and loans.

 

I have a A&L mortgage and the charges that I wish to claim back are in relation to the mortgage. I have been charged for arrears at £25 per time. Factually the arrears are not my fault, but the fault of A&L because they changed my payment method to direct debit but when I sent in the direct debit mandate A&L entered my account number incorrectly and then of course the computer started to show arrears. I wrote to them requesting a refund of the charges but they wouldn't refund them. So I then went through the BAG procedure, prliminary letter etc but A&L still wouldn't refund the charges stating that they were not Unfair nor Unlawful and in accordence with their T&C.

 

Of course, I want my charges back and I am hopping mad at the bully boy blackmail tactics that A&L are using against their customers - closing accounts!

That surely cannot be lawful?

 

Anyhow I am sitting on the fence at the moment, but rest assured that I am not going to let A&L get away with taking my money. However, I do have to be cautious as I do not want to be in the situation of losing my mortgage!!!

 

I do believe that the moderators are looking into the legalities of Banks closing consumers accounts, just because they are exercising their Rights in asking for refunds on Punitive Charges.

 

Thanks

angry cat

[overcharged_consumer]

How long are you tied in for? If it's only got a year or two left you could always hold out and then claim when you've changed providers.

 

By the sounds of it you may have an entirely different case against them anyway. Rather than the unlawful and unenforcible tack you could go for the fact that the arrears and subsequent charges were the fault of A&L and therefore not your responsibility. However, in order to prove this I guess you would have to demonstrate that you paid the arrears in reasonable time.

 

I'm not convinced that a mortgage provider would close the mortgage account because someone sued for charges but anything is possible and as it's a whole lot more difficult to open a parachute mortgage (in fact it's impossible given that would involve you closing your existing mortgage and transferring to a new provider whch would inevitably incur fees if within the tie in period) it may very well be advisable to wait until you've transferred mortgages in a few years.

 

Good luck

 

OC

[angry cat]

Hi overcharged consumer and Nackers - I thank you for your view-

 

I decided to respond to Nackers thread-

 

"Account Closure & Credit Rating" plus

'How do we think people with mortgages are being affected?

 

I have decided to move later this year and then I will change the mortgagee!

and of course, I will then be able to issue a county court claim against A&L, without any fear or worries - I will get my money back!!!

 

My situation re my mortgage account fines, is not really much different to charges that have been unlawfully applied to a credit card or bank account, because it does not cost £25.00 to send an automated letter, with no manual intervention. Therefore the fines are punitive and I notice from the OFT re 'Penalty Charged' that there is a read over, which is includes mortgages.

 

However, bearing in mind that A&L are using 'Bully Boy' tactics, I think that caution is the word for me and yes, I agree that I cannot open a parachute mortgage account but my mortgage account provider will change when I move. As previously stated, I will then make my claim against A&L when I am out of their 'Clutches'. I will not tolerate harassment & blackmail from Alliance & Leicester

 

Good Luck to all claiming against A&L

 

Thanks

angry cat