Amy said the bank should have instructed the agency to update the amount recorded on the credit file to $4,500. She said she missed out on a loan for a car because of this failure to record the reduced amount. Her bank did not accept that any decline of a credit application resulted from the amount lodged with the collection agency, rather the fact of the debt. However, the bank offered to reduce her debt by another $500 as a goodwill gesture. Amy declined the offer and asked us to investigate.

Our investigation

We found that the bank was entitled, under the credit agreement, to list the original $5,000 as an accurate record of the default.  That it was willing to accept a lesser sum did not change the fact that Amy’s default was higher.  However, we considered that Amy’s bank should have told her that although it was reducing the repayment amount, the original amount of the debt would remain recorded as a default on her credit report.  

Amy was not able to provide any evidence that she had applied for a car loan or that a loan application had been declined because of the record of the bank debt.  We suggested Amy reconsider the bank’s offer. 

Outcome

Amy accepted the offer.