The Knee-jerk Approach to Fiscal Responsibility The Knee-jerk Approach to Fiscal Responsibility
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  1. #1

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    Default The Knee-jerk Approach to Fiscal Responsibility

    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:

    1. 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;
    2. 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?
    Last edited by NickFitz; 16th May 2009 at 02:47.

  2. #2

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    Aww bless, someone who doesn't know how the financial services industry makes its money.

    The real profit comes from Churn and Defaults.

    People with good incomes and minor blemishes are generally a net loss and hence a waste of effort. For several reasons, such as they like to pay off early, you can't sell the debt on for a good return, etc. They probably would have experienced some difficulties back in the good times.

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    I blame the FSA who concentrate on form filling and box ticking rather than using common sense.

    We need to get away from red tape in this country.

  4. #4

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    Wrong thread...
    Last edited by Paddy; 16th May 2009 at 08:43.
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    I had an ex-rental land lord that claimed to Thames Water Ltd that I was still living in his flat 2 years after i had left and somehow a debt collection agency started making demands on me.

    I just got a letter stating pay this amount etc or else with no justification. In the end I wrote to Thames Water and the Debt Collection Agency with tonnes of documentation proving that my only address for the past years had been my new different address and not the old land landlords rental flat.
    So I had to dig out old Council Tax Bills, old tenancy agreements etc. proving that the ex landlord was a liar.

    What I am almost certain of is that they probably didn't clean up my credit rating with one or more of the big 5 or so credit rating agencies so if I am ever feeling bored or need a loan in the U.K. in the future (not likely as I am planning on going abroad) then I'll get me a credit check with the big 5 credit rating agencies. Just goes to show, incompetant t*ssers can mess your life up and wash their hands of all responsibility - that's why I was a contractor I don't count or rely on one particular company to look after me in permidom because at the end of the day - THEY WON'T ! and they'll wash their hands of you with no recourse.

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    Is this where I report my saga of NatWest ******* up my credit history so bad that my wife could not even a basic bank account? And that I couldn't open a business bank account?

    And Experian say it is down to NatWest to fix and NatWest say it is down to Experian to fix.

    And the Citizen's Advice Bureau consultant says it is the worst bank cock-up she'd seen so far, but she couldn't sort it out.

    I won't. It is long and rambling.

    Up sides: I'll never have a credit card nor an overdraft nor a store card ever again. So I do not pay interest on anything any more.

    And I've learned that if you really, really need something desperately, and you don't get it because you can't get credit, you don't die.

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    Quote Originally Posted by BrowneIssue View Post
    And I've learned that if you really, really need something desperately, and you don't get it because you can't get credit, you don't die.

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    The common factor in all this is the credit reference agencies themselves.

    If they are disseminating false information, however acquired, then technically they are committing libel (assuming it is easy to prove that financial loss may be incurred). A few successful class actions might make them a bit more willing to delete demonstrably false information and not be allowed to hide behind their corporate clients and deny all responsibility for the accuracy of their records.

    Also, I've long thought the time limit for listing paid debts should be far shorter, say a year instead of seven years or whatever it is currently. Apart from anything else that would be a big incentive for laggards to pony up a legitimate debt in full as soon as they could. As things stand, a defaulter may as well walk away from even trivial debts once their copy book is blotted.
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    Quote Originally Posted by OwlHoot View Post
    The common factor in all this is the credit reference agencies themselves.

    If they are disseminating false information, however acquired, then technically they are committing libel (assuming it is easy to prove that financial loss may be incurred). A few successful class actions might make them a bit more willing to delete demonstrably false information and not be allowed to hide behind their corporate clients and deny all responsibility for the accuracy of their records.

    Also, I've long thought the time limit for listing paid debts should be far shorter, say a year instead of seven years or whatever it is currently. Apart from anything else that would be a big incentive for laggards to pony up a legitimate debt in full as soon as they could. As things stand, a defaulter may as well walk away from even trivial debts once their copy book is blotted.
    In my experience it is quite easy to get the credit reference agencies to remove false information.

    When I had just left uni, I tried to get a loan for a car but couldn't. I paid 2 quid for a report from Experian, and it showed up a CCJ from my dad from when his business wen't bust, we have the same first initial and surname.

    They sent me a form for both me and my dad to sign, and it was removed from my credit report with no problems.
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