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It is only when trying to obtain some kind of credit that they find that their creditworthiness is a hurdle.
Therefore, the right and accountable use of credit records is very important - because misrecorded information or delay in update a credit record can have a significant impact. We' re bound to see grievances about the management of credit records. We see, for example, cases where a user cancels a contract - sometimes after a free attempt - only to find that his enquiry has not been dealt with and that he has finally found a tag in his credit record; well researched areas of mess we see in credit record grievances.
This ranges from issues with community bank balances and payments schedules to consumer issues where they find that they cannot obtain credit on the basis of information stored about them. A further area we consider is the bad communications - or lack of communications - between credit bureaus and other finance companies. And, as the case study shows, the wording of credit records and credit bureaus is also very important - because many have difficulty understanding the reason for what happens to their credit records.
Mr S., when he found that he was having difficulty repaying his credit, called his local branch and approved a reduction in the reimbursement schedule. Mister S. has made his montly contributions under this scheme - without losing a pay. Yet the mortgages supplier explained to him that he was not suitable for the best interest rates because his creditworthiness was not good enough.
Mister S. went on-line and examined his credit report. And he found out that it showed missing payment - and his accounts were accounted for as fraud. Mister S. was not sure what "delinquent" means in this connection - and he was sure that he had not failed to make any payment on his credit. He called his bench to find out what was going on.
Bench explained to him that the information they had noted on his credit report was exact. Mr. Bishop pointed out that he had never failed to pay for his loans - that he had arranged a discounted repayment schedule with the banks because he did not want to miss a repayment.
S. said that he was accepting that the discounted schedule should appear on his credit report - but said that the accounts should not be displayed as "delinquent". In reply, the EBRD said that the information on Mr S.'s credit report was correct - and that they had done nothing incorrect. When we talked to the banks, they said they could agree that Mr. S. had not failed to make any money on his reduction schedule.
We therefore had to check whether what the banks had notified the credit bureaus was correct. Mr. S. has been asked to provide us with a copy of his full credit report. We asked the banks to tell us exactly what they had told the credit bureaus. They also sent us a copy of a guide they had obtained from one of the credit bureaus on how to report information.
According to the policy, even if a client has arranged a reduction in the redemption schedule, all outstanding balances on the client's accounts must continue to be declared. S. had not failed to make a disbursement, backlogs built up on his accounts because he made less than full disbursement each time.
If they added more than one full month's pay, the latter was referred to as a'missed payment' in Mr S.'s credit record. We found that the banks had provided the credit bureaus with precise information - because they declared the backlogs that were built up on Mr S.'s accounts.
Mr. S. had asked for his credit report from the registered backlogs as "missed payments". In addition, we have found that the credit bureau has entered an escrow account as a "delinquent" if it is more than three month in default. It was understandable that this was a confusion for Mr. S. - but it had nothing to do with the way the banks had provided information about his accounts.
However, he said he still thought the method his had been described on his credit report was very puzzling. Ms. R. phoned her bench to find out if her husband's IVA would interfere with her. It assured Ms R. that her husband's IVA would not impact her credit record as long as she continues to make full credit payments.
On the other hand, the institution recorded a failure of Mrs R.'s credit files relating to the credit balance. Mrs. R. found out what had transpired and she lodged a complaint with the bench. Claudia pointed out that the banks had said to her that she would not be affected by her husband's IVA - and that nothing would appear on her credit records.
However, the banks agreed that they had made a error when they said to Mrs. R. that her credit record would not be affected - and they asked her for some indemnity to make up for her error. However, they said they did the right thing by noting the failure in their credit record - and declined to take it out of their accounts.
Ms. R. again lodged a grievance and said that she thought the bench would not treat her fairly. We had to determine whether the institution had been fair and reasonable when it registered a failure in Mrs R.'s credit record.
We were informed by the banks that they could not report different information for different owners of a shared accounts - and so it was their practice to capture a failure in the credit records of both owners when one of them closed an IVA. For this reason, the court said that Mrs. R.'s credit report must be in arrears if her husband's credit records showed one.
Therefore, we felt that it was not equitable for Ms. C. to book a failure against her just because the ability of the banks to collect information with credit bureaus was restricted. Against this background, we asked the banks to ensure that they would find a way to remove the arrears from Mrs R.'s credit files - and provide her with extra remuneration for the effort she had put in.
Mr. A. in December got a note from his local banking institution in which he had lost two month's payment with his credit cards - and that his current accounts were in default. He called the banks and said that he had not been invoiced in the last two month so he did not know how much to do.
Mr. A, the guy on the bank's help line, said not to bother. You said that he could make a immediate settlement to clear the backlog and that there would be no problems with his credit report. Mister A. made a telephone call and updated the current balance.
However, a few short months later, when Mr. A. tried to draw up a new telephone agreement, he was informed that he had not passed the credit assessment. Looking at his credit report on-line, he was amazed and puzzled to see that the institution had written down two "missed payment" marks on his credit record.
Mister A. was dissatisfied with what the bench had done - and he filed a grievance. Said he had been informed that there was no issue with his credit history - and that it was not fair that the banks blamed him if it was their blame that he had not got his month's bills.
Mr. Bennett pointed out that he had always settled his bill on schedule and had never failed to make other sums. He said he was worried that in the near term he would fight to get a loan or two. They replied to Mr A. and said they could find no explanation why he had not got his bills.
You also said that the missing marks were "a real and precise mirror image of your accounts". Accepting that they had misunderstood, they said to Mr. A. that there would be no information on the missing loans in his credit record - and suggested they should compensate him for 200 pounds.
However, Mr A was still not satisfied with it - and contacted us. Solved problem The institution agreed that its advisor had wrongly said to Mr A that his credit report would not be affected. Then we asked the banks to prove that they had written the excerpts and sent them to the right people.
If we look at the notes they sent us, we haven't seen anything that indicates that the banks didn't send the bills. When we look at the story of Mr. A.'s credit cards we see that he has never failed a transaction before. And we also found that he used his credit cards on a regular basis - and had a credit line to cover most of the time.
Satisfaction was expressed that the information provided by the banks to the credit bureaus was precise. Also, because the banks made no mistake, we did not ask them to delete the information about the missing payment. As part of our review, however, we did discuss with the institution that the information in his credit record could adversely impact Mr A's capacity to obtain credit in the foreseeable future. However, we did not believe that the information in his credit record would be sufficient to justify the decision.
Miss L had difficulty administering her credit cards over the course of the sommer. Often she went over her credit line and forgot to make some payment, causing her bank to default. She had updated her bank balance by the fall - but recently overdrawn it again.
Miss L. realized that she was having some difficulties with her financial situation and approached her local banking office to see if they would allow a lower deposit for her credit cards. Well, the banks accepted Miss L.'s proposal. However, soon after, the bench sent Miss L a reminder. Unfortunately, Miss L. had failed to make the first payments under the new agreement.
However, she quickly made up ground - and by the beginning of next year her finances had recovered to such an extent that she was able to settle the remaining account on the map. After doing so, she lodged a complaint with the institution that the reminder was inequitable. Well, the bench tells Miss L she didn't make a mistake.
You said you had recorded a settlement schedule - and when Miss L. had not followed it, the right procedure to obey it was to create a standard communication. Banks informed us that they felt the standard was an exact mirror image of the way the accounts were managed - so they wouldn't try to take it away.
It has been verified that the Information Commissioner's Office (ICO) instructions to register a failure have been followed by the ICO. However, we have found that if a vendor classifies a consumer's offering as a "token" transaction that he considers unacceptable, he can immediately adopt a standard. It was clear, however, that the amount proposed by Miss L. had been approved by the institution and that an agreement had been reached on a transitional basis.
The Directive states in these conditions that there could be a delay if the accounts were three month or more in delay. After Miss L. had failed to make her first instalment under the agreement she had made with them, the late debt was immediately reported by the banks. The ICO' s guidelines made it appear that the institution had pretended that Miss L had made'token' transactions.
However, in our opinion, the amount Miss L. was offering was too high to be regarded as a "token" pay. At any rate, the banks had taken Miss L.'s bid - and therefore should not have given formal default unless Miss L had been three month or more in delay.
We told the banks we didn't think they had it. Ms. L. had kept the bench informed of her position and proposed a reimbursement schedule - which we thought would show that she would co-operate and repay what she owe. Similarly, the bench had shown that it was willing to work with Miss L by approving the scheme.
Against this backdrop, we asked the banks to delete the standard from Miss L.'s accounts - and ensure that their credit files reflect what actually occurred, while at the same time stating the fact that a recovery schedule had been established. It was also our recommendation that the bench should indemnify Miss L. for the annoyance she had made by making mistakes about what she was willing to do.
and missed a payment on his credit cards. Concerned about the implications of late payment, Mr C. approached his local branch to see if he could make a smaller monthly payment for his credit cards. Mr C.'s position seemed to be appreciated by the EIB, which in these conditions accepted to allow Mr C. to make lower payment.
And so he re-established contact with the bench. On this occasion they arranged to give him three month's grace to settle his financials - and to prevent his default. However, Mr. C. was still not able to find a vacancy - and therefore could not make the payment he had made. At the end of the three month period, the credit institution deferred the interest on the credit cards balance.
Following talks with Mr C., the EIB then resolved to take over 80 per cent of the residual debts in full and definitively - and Mr C. repaid this amount. On the other hand, the institution placed a standard cursor on Mr C.'s credit database, which indicates that the loan was only 'partially paid'. Complaining to the bench, he said that since the bench had consented to pay less than the full amount, the tag should say "settled" instead.
It also said that the standard should have been adopted before - when the debts were greatest - so that it would "file" its credit files before. First, we thought about whether the credit card would say "partly done" or only "done".
Mr C. was told that although his institution had consented to less than the full amount of the blame for resolving the issue, this still implied that it had not repaid all the monies due to them. Therefore, we considered it reasonable to include a "partially completed" tracer in his credit database.
Next, we turned to the time of marking in Mr C's credit record. It was clear to us that bad debt losses would remain on a credit record for six years - and could have a huge influence on someone's ability to obtain credit. At the time we examined the order of event, we felt that a failure should not have been added, while Mr C. made the minimal contractual payment.
We had to choose when to register theault. When we looked at the accounts, we determined that the delay in Mr C.'s credit record should have been flagged when he did not fulfil the conditions of his recovery schedule - at the time when the banks ceased to apply interest to his debts.
That was three month after he had notified the bench of his position and been given enough free to settle his accounts. Now we have instructed the EBRD to retroactively date the mark in Mr C.'s credit record - to better mirror when he is in arrears with his payment. In other words, the failure would "go back" at an early stage and would no longer discriminate against Mr C as equitable.
However, the bench consented - and voluntarily enlisted to reimburse Mr C 100 for the disappointment and concern they had shown him. When Mr J. contacted his agent to inform them, however, he was informed that a particular type of mortgages was no longer available. According to the realtor, this was because the creditor had found that there was some bad information about Mr. J.'s credit record.
M. J. was not conscious of any of the reasons why adverse information would have been included in his credit record. Mister J. then payed to look at his credit record to see what the issue could be. It was very surprising to him that several failures had been logged - in relation to various loan books and mortgage loans that he had never taken out.
The information was requested from the credit bureau, which declared itself willing to investigate the events. Turns out the credit bureau made a little bit of a slip. But the information related to another Mr. J. - was wrongly entered in Mr. J.'s record. So the credit bureau apologized and suggested to Mr J. 1,500 pounds to offset the difficulties it had made.
Submitted a claim - but when the credit bureau claimed it had made enough offers, the claim was directed to us. Not confirmed We asked to see detail of both the initial and the second mortgages found by the agent - and thoroughly checked them out. If we were to pay interest on the amounts already made by Mr J at our normal interest of 8%, the indemnity provided by the credit bureau would have been much higher than the sum of the charges already made by Mr J together with the additional amounts he would make over the next three years.
Our guess was that the loss of one mortgages offering - and the short-term search for another - had been very stressing for Mr J., but we told him that we thought the credit agency's offering was fairly.