Nationwide refusing to show default on CRA

[camelCase]

I'm hoping someone can tell me if I'm wasting my time.
I had a FlexBasic account with NWide - no overdraft facility - and used the card for a pay-at-pump transaction in November 2016. This took the account balance to £-74 of unauthorised overdraft.
NWide reported this account as 6 months in arrears to all CRAs from Nov 2016 until Feb 2019 when I settled it. I believe that they should have been reporting a default any time from Feb 2017 - April 2017 per the ICO rules around reporting of defaults.

I complained to NWide about this and their response was:

"Our findings

There is no arranged or unarranged facility with a FlexBasic account. There are some transactions which could push your account balance below zero and into an unarranged overdrawn position. If your balance does go below zero, your account will be frozen until it is brought back into credit.

The account went overdrawn by £74.00 on 4 November 2016 after you made a pay at pump transaction for £75.00. The account remained overdrawn by this amount until 13 February 2019 when you cleared the arrears. The account wasn't used after this and was dormant until the account was then closed on 1 July 2020.

Credit referencing agencies will report your information a month behind, looking at your credit file it does show a true reflection of the positions your account has been in.

I appreciate that it may not have been communicated that we don’t apply a default, but it is our process to restrict an account until it is brought back into a credit balance because we wouldn’t look to apply defaults to a FlexBasic account.


Our decision

This is not an account that our Collections Team will issue a Default Notice with, as the account doesn't come with credit facilities such as an overdraft, so this wouldn't be within our process to Default this type of account and issue it to a third-party agent.

I would like to apologise for any inconvenience this may cause, but we wouldn’t be looking to apply a default to your account."

On reading the ICO guidance I'm pretty sure that Nationwide are wrong in this decision, what is the best way to fight this? Do I need a solicitor?

[nightwatch]

sorry but they are correct, your credit file would show a "6" as an arrears number,for each month the account has a - xx balance, once settled it would show as up todate or "0" . so for from March/ April it would show 0
A default would show on the credit file for 6 years even when settled ,you have now closed the account so there will be no more markers, or need for them to update the file.

They explain in the letter, a FlexBASIC, is just that a BASIC account for putting wages in and paying bills.
It never had an overdraft facility, so they could have refused to cover the payment for your fuel, but they didn't.
The account was frozen till you paid the £74. in to clear it.

[Never-In-Doubt]

I see what you're saying and kind of get your argument - and agree with you. Whether what we think is the same as the ICO is another story altogether mind you.

Irrespective of the type of account, the Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies states that if an account falls into arrears they'd expect a default to be registered within 6 months. The ICO also state similar as does the Principles of Reciprocity.

see links here -

1. http://www.scoronline.co.uk/sites/de...ment_final.pdf

2. http://www.scoronline.co.uk/principles

So if I was you I'd be taking it to the Ombudsman and let them decide as nationwide wont budge.

Obviously it's clear you knew what you were doing as Tesco authorises £1 and maximum debit card fill up is £75. That's irrelevant; the point is I feel you should have been defaulted after 6 months.

The problem now is - even though it's settled - your credit file will show these later payment markers for a further 6 years. So if the last one was added in Feb 19; this will show until March 2025. I don't think that's fair at all - you should have been defaulted by May 2017 and thus any derogatory marker would be cleared by June 2023 so they've adversely affected you by almost 2 years.

only if you'd made an arrangement to pay could they delay defaulting you and add the later marker. This wasn't the case. Regardless of whether the account allowed credit the fact is you DID breach the terms and they should apply the rules as noted above.

think your broadband / phone line. They add a default if you don't pay and there's no "credit" per se there either, like the flex basic.

maybe the issue here is NW should block offline sales to the basic account like most other banks do.

So I think you're right to be pissed. I'd complain to the FOS at this stage.

[camelCase]

Thanks both, I'll hold my hands up and admit I knew exactly what I was doing - financially things were a disaster back then and this was the only way I could get fuel to get to work, then there was never enough left over to pay it off. There was barely enough to eat most of the time.
Nearly all the other 'basic' accounts don't allow pay-at-pump transactions at all so I guess there's that argument too.

I've complained to the ICO already but they're saying 3-6 months to even assign the case to someone. My partner has a complaint with the FOS which has been waiting to be assigned to someone for a year! It seems like it's not worth fighting really (tho it's totally scunnered my credit file for the next 5 years when everything else is dropping off in 2 ). I'll see if the ICO ever come back with anything but highly doubt it.

[Never-In-Doubt]

Hmmm - the ICO isn't the right channel as they'll deal with any breach. This is account specific so I'd be utilising the FOS.

I know there's a wait. But realistically, the late markers don't hinder you too much after 3 years. What you could do is add a NoC to your credit file - basically request the note is added saying you weren't aware of the outstanding balance and when you became aware you immediately cleared it. It's called a notice of correction and basically forces every credit application through manual process. You'll get accepted more once they see the settled status and the NoC.

That's about your options. But still raise it with the FOS online.

[camelCase]

Thanks Never-In-Doubt, I've made a complaint to the FOS now too and have included some of the points that you've made. I'll update this thread if there's ever a resolution.

I probably won't bother with the NoC, I've managed without any access to credit since 2016 so I'm sure I can do another 3 or 4 years if this doesn't get resolved .