Will cancelling a DD affect my credit score?

[hallion]

Hi folks,

I have the misfortune of having a lease/rental on two Pitney Bowes franking machines until 2018. The scumbag salesman amended the lease date after I signed and despite arguing, it's my word against his so the agreement stands. That was several years ago and I have since moved to a Royal Mail OBA account which is infinitely better in terms of price and customer service.

Anyway, I have been emailing and calling Pitney Bowes for months to ask that they change the DD to come out of my new business bank account. Yet again, this quarter they have used my old account for the DD. I've had enough of their blatant incompetence and despicable customer service. I have cancelled the DD agreement with my bank. What impact will this have on my credit rating? I don't care if they close my account etc as I'll never use their over priced, st franking machines again but I don't want to end up with a poor credit rating because of this. I don't need credit BTW but will be remortgaging in a couple of years.

Any advice much appreciated!

[Sarnie]

If you mean "will the subsequent missed payments and possible defaulted account cause me problems in the future"?

Then the answer is yes. All credit history stays on your credit file for six years and I'd suggest that the increased mortgage rate you'd have to swallow to go with a lender who accepts a recent default, probably far exceeds the amount you probably pay on the lease.......

Does this lease agreement show on your credit file?

[caziques]

Surely for any amendments to be valid they would have to be initialled?, changes made after you signed would be fraud.

Perhaps you could an issue an invoice for all payments made after the salesman altered the documents, if they don't pay...off to small claims.

[HenryJM]

If you move a DD account the bank moves it for you, or should. The DD system includes ADDACS which notifies the company of the change, meaning their system gets updated and the DD continues from the new account.

That way should work, and if it doesn't then it's not your mistake. Ringing them up, meanwhile, probably won't work because the DD won't get transferred in the banking system.

[megaphone]

Cancel the DD. The supplier will be informed, or they'll realise they are not being paid, they will contact you to ask why, you then set up a new DD.

[Sarnie]

megaphone said:

Cancel the DD. The supplier will be informed, or they'll realise they are not being paid, they will contact you to ask why, you then set up a new DD.

Or they don't, OP carries on as normal, tries to get a mortgage, gets declined, finds a defaulted account on his credit file due to this, that he can't remove for six years...............

[Simpo Two]

And all because they can't move a DD from one account to another....

[Countdown]

Sarnie said:

megaphone said:

Cancel the DD. The supplier will be informed, or they'll realise they are not being paid, they will contact you to ask why, you then set up a new DD.

Or they don't, OP carries on as normal, tries to get a mortgage, gets declined, finds a defaulted account on his credit file due to this, that he can't remove for six years...............

My understanding is that the Supplier will usually try to contact the customer for payment before recording a default. I've cancelled lots (usually when I've been changing suppliers) and there is quite often a final balancing payment to be made. They send through a Final invoice which gets processed for payment.

Op - I would go with megaphone's advice. PB will be notified that the DD has been cancelled and it's in their interests to contact you before recording a default against you.

[Esseesse]

I think my OH has semi regularly cancelled DD's. There was one maybe a year ago when she decided the cat insurance wasn't worth it (or rather I convinced her). We moved house and got a mortgage a few months ago, don't think it was at a bad rate either.

[Sarnie]

Countdown said:

My understanding is that the Supplier will usually try to contact the customer for payment before recording a default. I've cancelled lots (usually when I've been changing suppliers) and there is quite often a final balancing payment to be made. They send through a Final invoice which gets processed for payment.

Op - I would go with megaphone's advice. PB will be notified that the DD has been cancelled and it's in their interests to contact you before recording a default against you.

Indeed, I'm just advising on what I've seen on countless credit files over the years.

The amount of issues I've seen due to disputes over bills, terms or direct debit's being cancelled is huge! There is always a "reason" why the default isn't their fault but unfortunately lenders make automated decisions based on whats on your credit file, not whether the default is fair or not.

Just saying that the OP should tread carefully thats all, as any credit impairment could cause issues in later years...

[Sarnie]

Esseesse said:

I think my OH has semi regularly cancelled DD's. There was one maybe a year ago when she decided the cat insurance wasn't worth it (or rather I convinced her). We moved house and got a mortgage a few months ago, don't think it was at a bad rate either.

Cat insurance isn't a credit agreement...............

[Esseesse]

Sarnie said:

Esseesse said:

I think my OH has semi regularly cancelled DD's. There was one maybe a year ago when she decided the cat insurance wasn't worth it (or rather I convinced her). We moved house and got a mortgage a few months ago, don't think it was at a bad rate either.

Cat insurance isn't a credit agreement...............

Oh ok, with you. Thought it was being suggested that the cancelling of a DD was a problem

[Sarnie]

Esseesse said:

Oh ok, with you. Thought it was being suggested that the cancelling of a DD was a problem

Cancelling the DD isn't the problem, but the lease agreement that the DD is for

[WindsorRob]

It depends on whether the company leasing you the equipment and hence potentially suffering a loss, has a reciprocal agreement with a credit ag. Many organisations don't as the data requirements are stringent and hence they can only reference your status. They're data is not used to update your file.

[kiethton]

I've had progress pointing out their inadequacies (the mis-dating of the term in this case) by claiming under the direct debit guarantee....

This refunds all payments you have made historically, they then contact you as before but you have the upper hand....they may be more willing to compromise and take a lump sum for the ending of the contract. Worse case you default with money in your pocket, or you just pay back what you claimed.