Banking error costs woman her credit rating

This is a guest post from Sylvia Milton, who wanted to share her nightmare story of banking errors, confusion and dreadful customer service – a nightmare which has so far run for 16 months and still hasn’t ended. If you’ve encountered similar problems in your life, please let us know about them in the comments below…

It started with a simple query about my bank account, and grew into a nightmare that hijacked my life and destroyed my credit rating.

On 19th November 2012 I asked Halifax to identify two Direct Debits on my Bank of Scotland business account: £238 to Halifax, £40.85 to T-Mobile. They could not. I asked a BOS Relationship Manager to cancel the DD’s, in the expectation that Halifax and T-Mobile would contact me for missed payment and I could then clarify what I was paying for.

Halifax and BOS subjected me to a six hour long ordeal on the phone that day, shunting me between BOS and Halifax. After five hours a Relationship Manager offered to call me back to stop my phone bill running up further and transferred me to the business department dealing with indemnity claims to see if they could help. BOS advised me to take out two indemnity claims, one on Halifax, the other on T-Mobile. We spent another hour going through payment dates and figures, I was left begging to get off the phone before my brain exploded! BOS however, did not explain the potential ramifications of taking out indemnities.

Over the next 16 months BOS quite simply hi-jacked my life

BOS told me it was doing ‘investigations’. They never took out an Indemnity on Halifax.  It took BOS three weeks to advise me that the Halifax amount was for my Intelligent Finance Loan.

I was quickly sent default letters by T-Mobile and Intelligent Finance.

I responded by telephone to both these companies, calling T-Mobile at the beginning of December 2012, but they could not tell me what I was paying for. They sent me threatening letters for the monies taken off the account (this was the first communication I had ever had from T-Mobile) it was quickly followed by another threatening letter for a second amount taken off my account (BOS had got the figures all wrong with this indemnity so I was completely confused now), these letters were quickly followed by two Moorcroft Debt Recovery Threatening letters.

BOS generated a catalogue of errors and subjected me to a myriad of mixed messages, involving BOS, Halifax, Intelligent Finance, Chester Loans and Lloyds Bank.  In my attempt to put this right, I did have some “sensible” conversations with some personnel however, too often,   I was subjected, at best, to endless lengthy telephone calls, listening to menus galore, piped music, long waits with transfers from one member of staff to another, even transfers between banks and, at worst, rudeness, deplorable customer service and, in the case of Intelligent Finance, corporate bullying.

My credit rating has been besmirched, my health seriously compromised, and a new business venture blocked, and my life?  Well put simply I don’t appear to have one anymore!!

It took BOS three weeks to answer the simple question I asked on 19.11.12, informing me that the Halifax DD was to repay a loan from Intelligent Finance (IF).  On 7th January, Vodafone threatened to cut off my mobile phone stating I was in arrears back to October 2011. This action would have put my business and potentially some of my patients at risk.  To begin with, Vodafone were very helpful because they said they knew I had not done anything wrong and they would write all over my account not to cut the phone off.  I assumed BOS had erroneously done this, but they denied taking out the indemnity claim on Vodafone and cancelling my DD.

Neither myself nor BOS could find the indemnity amount returned to my bank account, so, as a few months prior to this someone at BOS had interfered with my password, I insisted this be reported to the Fraud Department, albeit the complaint handler was reluctant to do this!  The Fraud department didn’t have the decency to even contact me, but sent a message via the complaint handler stating:

“Our findings show no credit or debit to your account for £2051.14 therefore, we are unable to determine why Vodafone are saying that we did an indemnity when we didn’t. I can confirm that I have raised your concerns with fraud, however, they have suggested that you contact Vodafone to establish why they are requesting this amount from you.”

This BOS error led to conflict for me with the Vodafone CEO office and, as I had reported the bank to the FOS, they had asked me to get in writing from Vodafone, who took out the indemnity and cancelled my DD.

How much was it for, what date, and where was the money returned to? 

Vodafone was now dragging its heels in giving this information so I raised a complaint with the Vodafone CEO office and a Customer Relations Specialist rang me, whereupon I could tell she had not read my letter, when I asked this question of her , she said the letter was précised and she did not need to read it!

Deep breaths…

I pointed out that it wasn’t précised very well because she had completely missed the fact that the money had not been returned to my account and that the précis was wrong.

On 3rd April 2013 this Customer Relations Specialist sent me a letter stating it was the ROYAL Bank of Scotland who took out the indemnity claim from Vodafone and it debited Vodafone’s account on 04.01.2013.  She gave my bank details and significantly NO AMOUNT.  As I don’t have an account with the Royal BOS, and there was no amount, I rang Vodafone’s office to be told by another member of staff these were typos. I requested an amended letter, which I never received.

This was the first of a few problems with Vodafone.. ultimately Vodafone accepted a cheque from Lloyds bank for an amount of £1904.71 which I asked them not to do, primarily because I do not have an account with Lloyds and didn’t understand their involvement and Lloyds had not contacted me to discuss this and, secondly, because at the time I was under the impression that the missing amount from my Vodafone account was as Vodafone had told me on 7.1.13. £2050.14, so I believed there was a shortfall and wondered who would be paying that?

I reported this to Vodafone’s Ombudsman who upheld my complaint, but offered an unsatisfactory outcome.

Some of the paperwork caused by BOS
Some of the paperwork caused by BOS

After hours of investigations on my part, I established that the actual Indemnity Claim taken from Vodafone by BOS was £1904.71 and that, because my DD had been cancelled, the Vodafone Operator I spoke to on 7.1.13. had added my December 2012 bill to this amount and thus quoted a figure of indemnity as £2051.14.

On 16.4.2013 Halifax sent me a letter informing me that they had refunded to my bank account on 11.12.12. £1904.71 for an indemnity claim they made on Vodafone in error stating it should have been for T-Mobile and they were investigating this and would keep me informed.

So Halifax made an indemnity claim in error against Vodafone, when it should have  been T-Mobile… and I don’t even have a Halifax account!

As I didn’t have an account with Halifax and Vodafone told me it was BOS who took the indemnity I was confused, so I rang Halifax only to be told they had sent Vodafone a cheque for this amount on 11.4.13. and that they had no knowledge of the letter I was referring to and it could not be seen on their screen!

Vodafone had advised Halifax they didn’t receive this cheque.  No-one informed me of any of this until I made the call to Halifax. When I checked my BOS correspondence, I could see that on a letter dated 2.1.13. from BOS it stated £1904.71 had been put back into my bank account for the T-Mobile indemnity.  On a BOS bank statement dated 14.12.12. it showed the following:

11.12.12. Deposit DD Refund £1904.71

11.12.12. Correction DD Refund £1904.71

11.12.12. Deposit DD Refund £1904.71

Vodafone Customer Relations Specialist stated in a Subject Access Report that they had done nothing wrong and that they had been meticulous in their calculations.  Clearly if the original call handler on the 7.1.13. had not given me the figure of £2050.14 and BOS had not re-entered an amount of £1904.71 as a T-Mobile Indemnity I would not have been led on a wild goose chase for a further six months!!

Having now identified that the Halifax account on my bank statement was my Intelligent Finance Loan I tried to pay the missed payment and was told by I.F. it couldn’t take payment from my BOS account as it was a business account and they told me NOT to send a cheque as it would show up as 555 on my bank statement and cause more confusion.

However I called I.F. on 18.1.13. and the call handler told me her Manager was going to amend my credit file, reset the DD,  Refund £10-00 and not pay 86p interest for the cost of my call. She was going to take the first missed payment on 7.2.13. and then subsequent Feb. payment on 13.2.13. and then payments back to normal… this did not happen and they continued to send me threatening letters stating I was ignoring their attempts to contact me and that clearly I wasn’t going to pay the loan voluntarily!

N.B. (This info is factually incorrectly recorded on internal bank files stating I refused to pay!)

Flabbergasted on 20.2.13. I called I.F. who answered as Halifax, 4 transfers and 25 mins later I spoke to someone to say I was sending a cheque to pay the loan up. I had raised a  formal complaint on 18.1.13. no-one contacted me, I chased it up on 30,1,13, and they gave me a second complaint number.  7th February a Manager called me stating she was from BOS and asked me to tell her what the problem was. I told her the story (1 and a half hrs.long!!) I pointed out no-one had contacted me about the I.F. complaints, she said, “I know I said I was BOS, but actually I’m calling about Intelligent Finance.”  She never contacted me again, so nothing was ever done about those complaints.

On 21st February I had  raised an official complaint with the Bank Ombudsman (FOS) against BOS, Halifax, and Intelligent Finance, so confused by the incompetence and mixed messages of the bank, I made many distraught phone calls to their office asking them , “you won’t make me take out individual complaints against the bank will you?” ~The Adjudicator reply was, “it was not up to me to have to sort out the bank’s confusion.” I supplied the FOS with Chapter and Verse everything that was going on, one member of staff said I had actually done the ombudsmen’ job, but the Adjudicator had told me she needed all this information.  Around June 2013 FOS changed Adjudicator…this second Adjudicator stated she was going to uphold my complaint with BOS, but I would need to take out individual complaints on the other banks!!

This Adjudicator openly admitted she had not read my complaint, but had spoken with previous Adjudicator. This Adjudicator was also combative and rude towards me.  Distraught, I complained. Her boss contacted me and was simply a bully. I had had enough of this rubbish from everyone. I complained again, his Boss contacted me… again I spent one and a half hours explaining the whole fiasco and how interrelated the problem was between the banks, and how the two FOS individuals had spoken to me… this manager sent me a letter supporting them and no apology for their rudeness and bullying.

I was being given conflicting info from FOS (treat the banks as separate – six months later the FOS tell me this) whilst the bank itself was telling me “treat us as one bank”!!! (Albeit I now realize the Lloyds group picks and chooses what suits them, sometimes it’s one bank and others they profess separation… in my view always it’s madness!)

To satisfy the FOS on 6.8.13. I sent each bank in the Lloyds Group a Subject Access Report request and a complaint stating the contribution each of the banks had in the Group for the mess they had caused me at that point for ten months of my life. A Manager from Intelligent Finance contacted me, and I explained the Corporate Bullying and the default on my credit file by them. He said:

“That would be Chester Loans you were talking to, they need a rocket. I’m looking at your account and everything in the garden is rosy. I will put in a complaint for you and I will return your £10 cheque for the Subject Access Report and request them to send you a Subject Access Report Free of Charge.”

He told me Chester Loans were branded as I.F. To date (24.3.14.) I have never received a Subject Access Report from Chester Loans nor any information with regard to the complaint this manager apparently made on my behalf.  Just to be clear here, my loan was with Intelligent Finance, the loan repayments were printed on my BOS bank statements as Halifax Account number…(remember Halifax didn’t know what this account was for…it took three weeks for BOS to find out). In reality this loan wasn’t really Intelligent Finance, but Chester Loans…and I repaid the total amount with a cheque to Intelligent Finance and got a receipt from Halifax!!

Furthermore I ended up getting a Subject Access Report about Intelligent Finance from HBos!!  And no… I AM NOT THE MAD ONE HERE!

Under the DPA Act a company has 40 days to provide you with the Subject Access Report.

My request was sent to each bank in the group on 6.8.13. This was what I received.

Lloyds acknowledge SAR request 20.8.12.  SAR returned 16.10.13.  70 days

I.F.      acknowledge  SAR request 13.8.13.  SAR returned 13.11.13.  97 days

N.B. Apparently I.F. is really Chester Loans who didn’t ever send me an SAR and the SAR I did receive about Intelligent Finance was sent by HBos and it took them 97 days to send me a SAR, comprising a copy of my loan and the repayments made on four sheets of paper, and four sheets of bank abbreviations, and no copies of all the threatening letters or transcripts of telephone calls. Hey ho….

HBos  acknowledged SAR 22.8.13. SAR returned 19.9.13. within the 40 days, but they also returned my Halifax cheque stating I had sent two cheques! Yes…one for Halifax and one for Bank of Scotland.  I’m so confused I’m losing the will to live (not literally!!)

Throughout this time, and in the months that followed, I made endless phone calls and wrote many letters, seeking to correct the BOS errors and their consequences. It consumed 10-15 hours a week for a whole year. When I applied for a loan for a new business venture, I was told that, despite an exemplary payment record, I could raise only £200! All because of the black marks on my credit file.

Turning now to T-Mobile, the DD of £40.85 per month was for a piece of equipment I never used, and should not have been sold in the first place. Not only that, the payments should have ended in 2011. Yet, when I cancelled the DD, they put a black mark on my credit file.

BOS had a hand in this too. The BOS clerk made a mistake in his calculations and had to take out two indemnity claims to the total the £1,200 he was trying to recover. T-Mobile sent me threatening letters for both amounts. They passed the ‘debt’ to Moorcroft Debt Collections, who also wrote me two demands. I rang them and they gave me two weeks to sort out the problem with T-Mobile. I couldn’t do it in that time scale and even though Moorcroft were repaid all the money and T-Mobile staff had subsequently told me they didn’t think I should have paid this in the first place, they will not take the default from my credit file.

I had never been given a contract for this piece of equipment and T-Mobile didn’t send one when I asked for it on 11.2.13. and didn’t ever respond to my complaint raised with them the same day and, to date, they have left the default on my file even though Experian wrote to them because they didn’t think it should be on there. Also, even though I never had a contract , a call handler at T-Mobile told me the contract ended in October 2011, but they continued taking £40.85 per month until I cancelled the DD with them on 30.1.13.

They advised me I should have given them 10 days’ notice before the end of the contract in Oct 2011, but if I didn’t have a contract and never used the equipment because I stupidly misunderstood what I had purchased then I clearly wouldn’t be giving notice for something I didn’t realise I had…now I do sound Mad…Oh dear…

In Feb 2013 I contacted the Financial Ombudsman Service (FOS), who changed adjudicator in mid-stream and the complaint against BOS was upheld, but the new adjudicator down-graded the seriousness of the harm I had suffered, and awarded me a risible £600 in compensation. She simply refused to recognise either the harm or the time and effort it had cost me. They have seriously let me down.

As things stand, I cannot get credit, I have lost work, my health has suffered, and I have had to battle, unsupported, against uncaring bureaucracies that will not appropriately admit and correct the errors in their operating procedures,   or their service issues and their corporate apology is lip service, whilst their total compensation amounts to £3,800 (£1904 of which is simply a sloppy banking error into my account so they have nowhere else to put this money other than to offer to leave it in my account) this does not  compensate me for the harm they have caused me.

They are currently supposed to be writing to the companies concerned to clear my credit file, but I sent them a letter three weeks ago with details of my credit file and they haven’t even bothered to acknowledge the letter to date. Finally, it took the member of staff seven months’ investigation before he realised he was the one that had taken out the indemnity claim on Vodafone.  There are clearly so many mistakes and confused systems in the Lloyds Banking Group, the culture must be to keep your head below the parapet or you’ll get it chopped off!

And don’t worry about the customers, if you aggravate them enough and bury them in paperwork, they’ll either give up and go away or we can give them tuppence ha’penny to shut them up!!

Sylvia Milton

18 thoughts on “Banking error costs woman her credit rating”

  1. What a horrendous story! @BOS’s behaviour has been disgraceful and their treatment their customer is quite appalling. This is another example of vile corporate bullying. How do they get away with it? This case should go before a judge.

  2. I have the same problems with Lloyds Bank not refund me and also barclays bank default me while i was on a dmp and then their a letter to me from burchan and wells and i told them about it write a email to them and then i told them
    the bank stolen £1,700 (barclays) and i received a sms from barlcays and no apology from them and now i got a rude fos adj saying barclays did not send me that information and it was on my sms i told her that and she refused to coperated to me

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