HELP! Lloyds have made my life hell...

A question about : HELP! Lloyds have made my life hell...

Hi,

God where do I start...

Maybe I should start by trying to keep this brief.

I opened a student account with Lloyds in 2004. I was on a 4 year course but 3 years in, Lloyds turned my interest free account into a Graduate account. I went in store with all my documents, I was refunded some charges and I thought the account was back on track.

After Graduating, found it hard to find work so was unemployed for a while. Was on Job seekers allowance which did help a bit but I still had a backlog of people I had borrowed money from.

Anyway, shortly after I found my account was with collections. I went into the branch and they said they had tried contacting me because my overdraft (Ј2k) was being reduced to Ј1750. This meant I owed Ј250 to Lloyds. They then told me I had to pay this to take my account away from collections so they could increase it back to Ј2000. I tried to explain that I was in no position to even attempt to pay this back in full at that time.

In the meantime, my JSA was being swallowed from these charges so I managed to borrow the money from a friend, paid up but then they said due to my poor credit rating, I was unable to increase this back to Ј2000.

So I'm Ј250 down, my credit rating was damaged and I'm broke. I was living on my friends sofa at the time so as you can imagine, things were not looking too bright for me.

Luckily, Lloyds bank offered me this great deal to help people like me who are worried about their credit rating. It was called ID AWARE. I was pretty much bullied into signing up, cost Ј5 a month which I clearly didn't have!

I moved banks at this point. Natwest was my new home for my JSA. My Lloyds account was now no longer being used.

I'll be honest here, time had flown by, maybe a year had even past and I was still in no mans land. I was stressed through family problems, boroowing from friends and living hand to mouth. So the Lloyds account was the last thing on my mind.

It's now 2011, my Lloyds account had ceased as there was no activity. The debt was sold onto the debt collectors and obviously they were on the hunt. I had changed address a number of times but Lloyds knew that my mothers address in London (I was with Lloyds for 10 years).

(Sorry I'm trying to keep this short)

I contacted Lloyds but the debt was sold. I called the debt collectors - Not interested. Give us our money. NOW

Financial Ombudsman to the rescue! So I thought. After a number of months of toing and frowing, the FOS said that because Lloyds made the effort in contacting me, I had to pay the debt. What I couldn't understand was why I didn't hear anything from them about them closing the account?

After a bit more investigating, I called Lloyds to try and come to an agreement in settling the debt. I didn't pass the security questions? I had to call again, same thing. I couldnt for the life of me understand why my details were different to what Lloyds had.

I went into the branch and gave them my ID. They said that they were trying to contact my university address (from 2004). I was in and out of my local branch and they still never changed these details. They had my contact number, email address and even wrote responses to me when I was complaining to them about ID Aware.

So, I'm here now. The debt is the same and I've defaulted every month since. I really want to get this sorted out as I am now in a position to start paying my debt off (YAY!!).

I have been very active in contacting my bank and the FOS but during this whole time, the debt collecters have harrassed me, the defaults have meant I cant get credit on anything (I'm on payg mobile).

Lloyds have admitted that there was an error on their part and they gave me Ј100 as a goodwill gesture. The problem is that the Ј100 is miniscule compared to the overall dark cloud that sits above my shoulders every single day.

Because the debt has been sold on, Lloyds want nothing to do with me. Is this my fault?

Question time -

I'm concerned about my credit rating and really want to sort my life out now. Any recommendations on how I can rid of all these years of monthly defaults?

Will the debt collector negotiate if I pay in full? How will this be marked on my credit file?

Any help would be greatly appreciated. I know the above seems quite long winded but that is not even half the story.

Thanks for your time!

Best answers:

• What is the date of the default? Is it accurate? It will stay on your report for 6 years, paid or not. Its not a new default each month, its the same one being applied.
  What did they admit fault for with the Ј100?
  If the account has been sold to a DCA, Lloyds don't own it any more. So all letters have to go to the DCA. Which DCA is it? Have they been writing to you?
  They will likely settle for less if you can pay in full or a couple of payments.
  Bit more info needed, hence the questions.
  HB
• Moral of the story? Don't ignore your debts
• Missu I think that is a little unfair and rather unhelpful... OP hasn't ignored debts, rather been overwhelmed with all that life has thrown at them. To be fair there are probably plenty of us here that have been guilty of 'ignoring our debts' at some point or another.
  Ed84 - I didn't want to read & run but I also wouldn't like to give you inaccurate info. I would have thought there was a case for miss selling for that ID thing on the grounds of pressure selling, but you have already taken this to the ombudsman you say?
  I think if this were me I would look at it this way. There is already a default and that will be there for 6 yrs from date of default. Make an arrangement with the debt collectors and pursue Lloyds for some compensation on the grounds of financial hardship while you were on benefits. Any money you get back from them put straight on that debt.
  As I said though, there are many more qualified than I here so there will more than likely be better advice for you from others.
  Glad you have found yourself in a better position now and I wish you luck getting past all this
• Hi,
  As Happy-bunny says above, bit more info needed, from what I can piece together it seems like you may have a case for mis-selling on the "id aware" thing, just clarify what the Ј100 compensation was for.
• Op, as you are now in a position to start paying-off the debt, why not ask them in writing for a full and final settlement figure?.
  Once you have this, then you can look at either applying for a loan though one of the peer-to-peer lenders such as Zopa or Ratesetter, or try for a credit card with a limit high-enough to cover whatever they come back with.
  Before someone shoots me for suggesting taking-on extra debt to pay-off the existing debt, if the op keeps up the payments (or even over-pays them) then this will help to rebuild their credit worthiness.
• And check to see if you ever had PPI missold on any of your previous borrowings. Could provide a lump sum to start you off.
  Best of luck!
• I do note that the OP feels they were 'bullied' into signing up for it but I've seen that claim before and I'm wary of necessarily giving it too much credence. There have been threads before saying "I wanted to borrow Ј3k, the bank said Ј7k would get me a lower rate. Now I've spent the money but I can't pay it back, it was mis-sold". Well, no, it wasn't mis-sold provided the reason for borrowing the extra (getting a lower rate) was made clear. The choice, in the end, belongs to the consumer, as does the responsibility to make the right choice for them.
  The phrase 'pretty much bullied' is too subjective. What did the bank employee(s) actually do? What did they claim? Why did the OP sign up - what did they think they would be getting out of it?
• Just want to say a big thanks to everyone for you kind words and advice. It's nice to know that there are people out there willing to give help and advice, especially to people who feel confined to the debt cocoon that surrounds them. It's an awful place to be and it's really hard to come out from and when you finally do (which could be many years later), it's like climbing through quicksand.
  HappyBunny - Ј100 was issued as a goodwill gesture to compensate me for some of the money taken from my JSA and also the ID Aware.
  DCA is the 'lovely Lovell'.
  Missu - I really wish it was that easy. Being broke, homeless and depressed didn't assist me it trying to sort my life out. If I could turn back the clock I would.
  cheifsfanuk Thanks for your kind words. I'm worried if I make arrangements with the debt collectors, the defaults will still be there and it will take years to rebuild. I want to negotiate but wouldn't know where to start?
  Patman99 - I did consider this but my rating is abysmal. All they see on my credit file is hundreds of little red circles with DF. Very unattractive.
  BossyMoo - Wish I did! I've never had a loan or credit card. It's this bloody graduate overdraft that has ruined me. I learnt 1 thing from Uni - Don't bank with Lloyds.
  Violalass - They sold it to me when I was at my most vulnerable. They saw the devastation in my face when I found that my account was with collections and they said this will affect my credit rating. They said this will never happen again if you sign up to ID Aware. Great sales techniques I must say.
  Taff - They first applied the default in Sept 2010. If it's sold onto a DCA, will this mean a new default date is issued? Therefore 2 different defaults.
  Also, I've seen some forums on something called 'Statute Barred'. Is this anything to do with me?
  Thanks again!
• Default date stays the same. Even if sold. DCAs sometimes change it. Keep a copy of your report showing the correct date as any funny business can be corrected.
  Statute barred means they can't take you to court if you have not paid or acknowledged the debt in writing. Basically can't make you pay.
• If you haven't paid or acknowledged the debt in 6 years.
• Oops. Thanks Taff. Forgot that bit!