Brendan Burgess
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Does anyone know how an unauthorised overdraft impacts one's credit record?
I presume going overdrawn by a few days is not noted?
Brendan
I presume going overdrawn by a few days is not noted?
Brendan
Those who exploited the BoI systems glitch will not have a bad Credit Record
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Brendan Burgess
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Where did they say this?
The Irish Times is reporting something different which is what I think is correct.
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Bank of Ireland warns credit ratings could be affected by withdrawals made during IT outage
Garda says decisons taken locally to deploy officers to ATMs due to ‘public saftey’ concerns as queues built
When asked what measures it would put in place to ensure people would not have their credit ratings negatively impacted through no fault of their own, a spokeswoman urged “any customer who may find themselves in financial difficulty due to overdrawing on their account to contact us”.
Credit rating
However, she added that where “debits or overdrafts aren’t repaid over the long term it can impact a person’s credit rating”. She said no customer will “be out of pocket where any direct debits, interest or other related fees accrue due to the outage”.The Central Credit Register sets the rules. So I doubt that BoI could agree not to report someone in an unauthorised overdraft for a long time.
Brendan
I can't really see how it can feature on the CCR given the circumstances that have given rise to the existence of the "credit". Unauthorised O/Ds do not go onto the CCR as far as I know. It might impact people who took advantage of the glitch and who already have an authorised overdraft facility, but even then it would be a bit of a minefield.
Brendan Burgess
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@24601
I contacted the Central Bank and got a reply yesterday afternoon which confirms what you said:
In a scenario where a person has a current account with no overdraft, but nevertheless runs up an overdraft, and presuming that the underlying terms and conditions do not provide for an overdraft, then there will be no underlyingcredit agreement to report to the Central Credit Register. In such instances, lenders may wish to engage with the customer and create a new credit agreement for the overdraft, which may then be reportable, depending on the amount involved..
If they have an authorised overdraft and are in excess of it, then their credit record would be impacted. But I doubt that many of the people who exploited this issue, had authorised overdrafts.
Brendan
I contacted the Central Bank and got a reply yesterday afternoon which confirms what you said:
In a scenario where a person has a current account with no overdraft, but nevertheless runs up an overdraft, and presuming that the underlying terms and conditions do not provide for an overdraft, then there will be no underlyingcredit agreement to report to the Central Credit Register. In such instances, lenders may wish to engage with the customer and create a new credit agreement for the overdraft, which may then be reportable, depending on the amount involved..
If they have an authorised overdraft and are in excess of it, then their credit record would be impacted. But I doubt that many of the people who exploited this issue, had authorised overdrafts.
Brendan
This is what I couldn't understand about all the talk around impaired credit records. I know you said it on SixOne in good faith but there were also people working in banking that should know better that indicated the same. The CCR only deals with agreements formally entered into. I would say you're right too that very few people exploiting the glitch will have had an authorised overdraft. I'm not sure there'll be too many people who took the money agreeing to enter into a formal overdraft when they are informed that it would be reportable (only those that agree to an overdraft agreement and who overdrew by €500 or more can be reported to the CCR anyway AFAIK).
Its a long time ago, but I maxed out an authorised overdraft with BOI in 2001, after a few months, when I didn't engage (I was young and foolish) they deauthorised it, thus making it unauthorised. I can't recall exactly but I don't think it ever appeared on my credit record. I had no choice but to clear it all, plus all the referral fees, penalty interest and punitive interest charges - which started at around 75 euro per the first month and gradually went down until it was cleared. I don't think it was ever on the ICB record but I could be wrong.
Brendan Burgess
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I wonder could Bank of Ireland authorise and overdraft for €100 for all these people and then report them for being in breach of a credit agreement.
Probably not. A pity.
Brendan
Probably not. A pity.
Brendan
No, obviously not, there has to be a credit agreement, agreed by both parties, for an amount in excess of €500, to be reportable to CCR.
It depends on their circumstances. By the sounds of it an awful lot of people who might have very low income sources (I'm thinking 200-250 per week from social welfare or part time work) were tempted by this scheme. Its likely they wouldn't be accepted for an overdraft under normal circumstances - I'd like to think that BOI would take this unusual scenario into account, but based on my personal experience of BOI, I wouldn't be optimistic that they do.
Either way, there would have to be a grace period with interest fee and no penalties for those who overdrew. But this is all in the context of an enormous outage that left people with no access to check balances online or carry out normal transactions.
Nut I wouldn't imagine BOI should or could be expected to extend an indefinite interest fee 1k overdraft to customers who had nothing in their account and just mysteriously happened to transfer 1k to their Revolut and then withdrew that from an ATM at 1am on a weekday. But frankly instead of paying 25m in fines to the regulator, CB would be better off directing BOI (and other institutions) to distribute a similar to their customers in compensation for repeated outages as we have seen this year.
There is no basis for fees, penalties or impaired credit records. The information Brendan and other commentators were spreading was just wrong. There's little prospect of people entering into overdrafts after the fact either. I'm not even sure it would be possible, either legally or technically, from a CCR perspective.
Still, if your only source of income is 220 a week or whatever on social welfare or a part time job, and you are now -1000 in your account, you are not going to be able to make a withdrawal on your account for weeks. So if you blew that already on a telly, this might just be a tad problematic.
I give it a week before they are howling on the social media channels that the bank have "taken" their social welfare payments or wages.
Brendan Burgess
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They will open an account with another bank or credit union and divert their salary or social welfare payment to it.
Brendan
You know I have a strange feeling that BOI will make a lot of noise about this for a week or two, and then the problem will quietly go away and get forgotten about. I may be wrong of course, but they certainly won't want this being dragged to the courts or blowing up on the front pages of the red/rag tops. In the ned, many of the opportunists could well escape repayment, retribution and repetitional damage.
Except that there are only 2 other banks & credit unions are messy, and they would need to act fast in order to get such an account up and running AND their welfare payments transferred over in time for the next payment.
That's incorrect. There's at least the following:
- AIB
- PTSB
- EBS
- An Post
- The various Fintechs
AIB and EBS are the same institution.
Fintechs don't offer full service solutions. You can't get an overdraft or a mortgage there.
An Post again, is only offering a basic current account and is not a full service institution.
You think that th
I didn't realise you had all sorts of terms and conditions on what you accepted as a current account...
Brendan Burgess
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In practice, there are only two other full service banks.
There are other bits and pieces.
Brendan
There are other bits and pieces.
Brendan
These people won't be looking for a mortgage. Besides, where you have your current account has no bearing on your mortgage. I've never got a mortgage from a provider I've had an account with.
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Not just because BOI might forget to report to the CCR?
42,000 BoI customers' details not reported to CCR
Bank of Ireland has apologised after it discovered that financial details relating to a further 42,000 customer accounts were not reported correctly or at all to the Central Credit Register (CCR).