Current account mismanaged by Nationwide with a resulting Credit Default on my record

[Current ac mismanaged]

I’m looking for some advice regarding a long saga and hoping that recounting the situation might prompt some advice.

I recently applied for a mortgage and was declined due to, what I found to be, a default on my credit record relating to 2017.

 

I had an old bank account with Nationwide, opened in 1990, that I had stopped using as my main account many years ago. I moved home in 2012 but did not notify the bank of my change of address. I had some payments going through but thought I’d stopped using it entirely in 2013 and it was in credit.

 

Unfortunately unbeknownst to me an old legacy direct debit (from 1992) remained and kept charging the account until it went into overdraft in 2015. The account had a £1700 overdraft limit so there was no default.

 

However in early 2015 the new occupants of my old address had returned my statements informing the Nationwide that I was not at this address and with no information on any new address. Nationwide then recorded me as a ‘no trace’ and stopped sending statements. They did however continue to allow the old direct debits to draw from the account for 2 more years.

 

Nationwide maintain they reviewed the limit on my overdraft every 6 months but saw no reason to reduce it - even though I was a ‘no trace’, and no funds had been deposited since 2013.

 

Eventually in 2017 they arbitrarily decided, with an overdrawn balance of £280, to reduce the overdraft limit to £250 and call a default. Clearly they then tried to contact me at my old address without success. The default was registered at £280 in Oct 2017.

Only in 2021 did I discover the default on my credit record and it has left me unable to obtain a mortgage. My credit record is otherwise 100% fine.

 

I know I was remiss in not reporting my changed address (it was an oversight and not deliberate) but the consequences seem disproportionately massive for me and my credit record, and seem not to truly reflect the amount and default date.

 

I believe there was some onus on Nationwide to reduce the overdraft earlier, at least when I was found as a ‘no trace’ and not being sent statements (and therefore implicitly not aware of the debits on the account).

 

This would have led to an earlier default at a lower amount, with significantly better ramifications for me (lower amount, earlier date). Instead it appears that default was seemingly arbitrarily called in 2017. I argued my case with Nationwide but they just repeatedly stated they ‘followed their process’. 
 

So in early 2021 I put my case to the financial ombudsman. They found in favour of the Nationwide in their 2 preliminary reviews. I persisted and, having googled the issue to death, referenced the BCOBS (banking conduct of business sourcebook).

 

The BCOBS was the only firm ‘regulations’ that required a bank to operate with a duty of care. There was a specific reference there that required banks to make reasonable inquiry before stopping sending statements.

 

With this reference, the FOS agreed to revisit my case. The good news is that 16 months after starting their review they have changed their preliminary decision to uphold my appeal, 

 

the bad news is that they  are only proposing that Nationwide should just cancel my default and compensate me only £350.

 

 This issue has cost me hugely - difficult to quantify financially, but I have been unable to move/obtain a mortgage as a result, and the stamp duty alone I would have avoided if I could have moved and got the mortgage in 2021 during the stamp duty holiday is thousands of pounds..

 

The default has sat on my record for 5 years (and will expire naturally next year). The £350 is barely a gesture and it appears to me that there should be some consequences for Nationwide above a £350 penalty. They are clearly in breach of BCOBS.  
 

My question is should I take this to the courts rather than just accepting the FOS preliminary decision?

Any thoughts very gratefully received. 

[Andyorch]

Welcome to the Forum I have moved your topic to the appropriate forum ...Nationwide please continue to post here.

 

Andy