Lawyers investigate reports that Barclays mortgage customers wrongly penalised for missed payments
Consumer lawyers at Leigh Day are investigating complaints reported by Barclays mortgage customers about apparent adverse credit entries logged on their credit files as a result of a banking system error.
Posted on 03 May 2022
Solicitors are considering whether affected customers will be able to bring a claim against the high street bank as a result of the alleged failure in service.
These customers say that a system failure caused regular direct debits to not be collected by Barclays, meaning they now face having missed payments on their credit records. In some cases, it has affected their credit rating and ability to obtain credit including other mortgages.
The Guardian reported on this issue in November 2021, with some Barclays customers only realising that there was a problem when they checked their credit scores. Some customers reported not being made aware of their missed payment before it was reported to credit rating agencies.
Having missed payments on your record can have serious implications for securing credit. It could prevent further lending or, where alternative borrowing is possible, make it more expensive. Some customers are now trapped in high-interest credit arrangements without the ability to restructure and others have been forced to spend thousands of pounds and been subject to higher interest rates due to adverse credit findings.
Financial institutions such as banks and other mortgage lenders are obliged by their regulator to ensure fair treatment of customers. This is at the heart of their business model, however Barclays’ process for notifying customers of missed payments and for correcting mistaken missed payment reports has left some customers financially worse off.
It is particularly concerning that the banking system errors which have been causing issues for these customers appear to have been going on for some time, and could have affected many consumers without them realising. Most consumers do not regularly check their credit scores, and in many cases consumers only become aware that they have a missed payment on their credit records when they go to take out a loan, a credit card or mortgage.
Correcting your credit record can be a long and frustrating process, and the first stage requires the lender to confirm that a mistake has been made. Data protection legislation requires mistakes in a person’s personal data record to be corrected “without undue delay”, however in reality the process can take months, during which time consumers are exposed to higher interest rates and potentially even unable to obtain credit.
Specialist consumer lawyer Michelle Victor said:
“Mortgage lenders and other creditors must ensure that missed payments are properly investigated and customers are given a chance to explain or rectify any mistakes before adverse credit findings are referred to credit reference agencies. If payments are missed because of a banking error, it is unacceptable that automated referrals to credit reference agencies are made without customers being made aware beforehand. Any errors should be corrected immediately to avoid impacting on an individual’s credit standing.
“Mistaken credit reports can have huge implications for consumers, who may be losing out by being forced to pay thousands of pounds in increased interest rates, or in some cases unable to borrow money at all. Customers may be entitled to compensation for losses they have suffered and we urge those affected to get in touch.”
Anyone who thinks they may have been affected by the reported failures in banking service can contact solicitor Andrew Jackson on firstname.lastname@example.org
Michelle is a leading consumer rights lawyer and head of the food safety team in London
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