I've just been chatting to an old friend who works for one of those Great British Financial Institutions that had to be bought out by Santander to save Her Majesty's Government the trouble of rescuing it.
She told me that, during the WGAFS years, she was regularly approving mortgages of 140% LTV without proof of income.
Last week, she had a couple with a combined annual income of over £300,000 applying for a secured loan of (IIRC) ~£10,000. They had recently moved house and had unknowingly left £17 unpaid on a final reading electricity bill that had been sent to their previous address (after they'd moved) rather than to their new address.
The energy company had immediately placed a default notice on their credit record for the £17. As they had a default, she was required by the bank's new "zero tolerance" policy to decline the loan.
This raises the obvious question of why the energy company takes the drastic step of blighting somebody's credit record over such a trivial sum, without ever noticing that it was due to their own failure to update their records; but there's more.
Having years of experience in these matters, my friend escalated the case, pointing out to her senior management that this was clearly a simple oversight of the kind that might happen when people move house, that the couple's credit record was otherwise blameless, and that it was ludicrous to imagine that people with a proven annual income of over a quarter of a million quid were unable to find £17 once they knew they owed it.
No dice. She was ordered to decline the loan.
So these people were caught in two ways:
I blame it on letting permies run these things. They're obsessed with "OMFG I must make sure I don't get shouted at in that meeting next week, or I might jeopardise my chances of getting a key to the executive washroom in twenty years." A contractor would just say "FFS, the system's fscked again, they're obviously OK, give 'em the loan. Even if it goes tits up, I'll be somewhere else when the bodily waste meets the air-circulation enhancer."
Or is that just me?
She told me that, during the WGAFS years, she was regularly approving mortgages of 140% LTV without proof of income.
Last week, she had a couple with a combined annual income of over £300,000 applying for a secured loan of (IIRC) ~£10,000. They had recently moved house and had unknowingly left £17 unpaid on a final reading electricity bill that had been sent to their previous address (after they'd moved) rather than to their new address.
The energy company had immediately placed a default notice on their credit record for the £17. As they had a default, she was required by the bank's new "zero tolerance" policy to decline the loan.
This raises the obvious question of why the energy company takes the drastic step of blighting somebody's credit record over such a trivial sum, without ever noticing that it was due to their own failure to update their records; but there's more.
Having years of experience in these matters, my friend escalated the case, pointing out to her senior management that this was clearly a simple oversight of the kind that might happen when people move house, that the couple's credit record was otherwise blameless, and that it was ludicrous to imagine that people with a proven annual income of over a quarter of a million quid were unable to find £17 once they knew they owed it.
No dice. She was ordered to decline the loan.
So these people were caught in two ways:
- If a supplier, through its own inability to properly direct mail, feels slighted, it will slap a black mark on your credit record without further investigation;
- If a lender finds that black mark (and they will) they will fly in the face of sanity and deny you credit as management now rely on a CYA approach to doing their jobs.
I blame it on letting permies run these things. They're obsessed with "OMFG I must make sure I don't get shouted at in that meeting next week, or I might jeopardise my chances of getting a key to the executive washroom in twenty years." A contractor would just say "FFS, the system's fscked again, they're obviously OK, give 'em the loan. Even if it goes tits up, I'll be somewhere else when the bodily waste meets the air-circulation enhancer."
Or is that just me?
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