MortgagesMar 23 2018

Halifax admits mortgage error puts credit ratings at risk

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Halifax admits mortgage error puts credit ratings at risk

Halifax mortgage customers who made manual repayments may have had their credit score negatively affected after they were wrongly marked as having missed their due dates.

Following reports, the lender admitted to FTAdviser it had mistakenly marked some borrowers’ payments as late without their knowledge between March 2012 and May 2017.

The bank said payments made manually rather than through direct debit or standing order payment were not processed until the next working day, which means they were marked as being made in the next calendar month.

Credit agencies such as Equifax and Experian were automatically told about these "late" payments so some customers' credit scores will have been affected, though Halifax has not yet revealed how many customers may have been impacted.

A spokesman for Halifax said: "We have identified a small number of customers whose mortgage payments were received on the last working day of the month and not applied until the first working day of the following month.

"We have written to all customers affected to make them aware that these were incorrectly marked as late payments and that we have contacted credit reference agencies to ensure their records are updated accordingly."

The bank has written to customers whose credit scores were hit and has contacted agencies to ask them to correct their reports. It said most payments are made by direct debit so only a small number of customers have been affected.

Customers who think they may have been affected are being advised to ensure their credit score has been corrected, and to contact Halifax if they think they may be owed compensation.

James Daley, founder of consumer champion site Fairer Finance, said: "This is another case of poor IT systems letting banking customers down. Halifax is one the UK’s largest lenders and borrowers should be able to expect that their payments are credited correctly.

"Errors on credit files can have far-reaching effects and be hard to put right, so I’d expect Halifax to be compensating customers who lost out as a result of these mistakes."

Justin Modray, founder of Candid Financial Advice, said: “The problem with most credit decisions being made by computer these days is that errors on your credit file can lead to you being rejected or suffering higher rates of interest when seeking to borrow.

“So it’s frustrating to see Halifax mistakenly add black marks to some of its mortgage customers’ files. Halifax has said it’s putting things right, let’s hope it does so very quickly.”