Bank retaliation 2

[jon]

A catch 22 position: if you've got a bank loan, are using part of your credit card limit and have an overdraft (within the limit), quite a lot to lose if bank takes retaliation while you're conducting the action against them (for the charges that contributed to your debt in the first place). Thus my particular concern of the previous posting to find out (if any info available) how often banks are taking action like shutting down accounts/removing cards etc when people make claims against them.

 

Incidentally if they shut down an account that isn't officially 'defaulting' you is it, that must be something else (when you can't find the money to pay off whatever it is they're trying to make an excess charge against you for - installment of loan etc prsumably).

[BankFodder]

Shutting down the account isn't defaulting but being unable to repay the overdraft according to their satisfaction is. They seem to impose pretty stringent conditions for repaying and move to default quite quickly.

How often does it happen? Difficult to judge but you should act on the basis that it will happen to you.

[jon]

ok will assume that account shutting and so on would happen to me so would ensure getting a new account, card, credit facilities etc at a new bank before suing my existing one. Given my existing position of having an overdraft (partly up to the limit), a small loan, credit card with a couple of thousand on it, it would seem best to wait to clear some of this off, at least, before suiing the current bank.

 

However...a very major question...I could handle having to move bank as a result of having sued them, but let's say I had opened the new bank account using my current credit rating and got things set up so I had the same kinds of credit limits as at my existing...wouldn't my financial position at the new bank still be weakened if my existing bank shut down my account entirely (and card etc)? Wouldn't the new bank hear/find out about the position with my 'old' - the existing - bank, and wouldn't that dent me in a significant way in their eyes? If so then my position at the new bank might mean, for instance, that even years later I was not able to get say a large loan for an enterprise through them, or a mortgage; or I might be able to get a mortgage with them but not at as good terms as before.

 

Is that the way things would play out with the new bank if my old - the existing - bank enforced a shutdown of my account as a result of my having successfully sued them? I don't know the way banks work on these things - what records an account termination would go down on for instance, how much it would count against you - but would very much like to know given there is quie a lot at stake here. My position is that having fought back through financial difficulties pushing me near to bankruptcy - when the bank's charges exacerbated my difficulties and contributed to them - I have partly got out of the position of debt, and I can, a lot later than most people, maybe envisage getting on the property ladder finally, in two-three-four years' time (in my 40s). It would be cruel (!) to have that possibility taken away from me through clawing back excess bank charges made to me in the past...if you see what I mean.

 

Any info you had on this would be very gratefully received...

[BankFodder]

I don't think that your history at one bank is communicated to another.

However your CRA record will be. This is why you should set up parachute accounts before the event and not after the event.

[jon]

thanks for reply. Can I ask what CRA is please - tried looking up on Google but couldn't find. If a specific/recognised term you see, it means I can look it up and it'll help fill in my understanding of how the banks are rating me (I am aware of particular things they can get hold of at different places, eg through the standard credit reference agencies, Experian/Equifax...). ta.

[BankFodder]

Credit Reference Agencies

[jon]

This topic was closed on 03/06/19.

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