Hadi Ahmed with his mother
I am an engineer in the oil industry and have to travel a lot to work in countries like Qatar.
At the end of last February, my income dried up as a result of the pandemic as countries imposed travel restrictions and the price of oil plummeted.
As a result, I applied for a payment holiday on my mortgage, major credit card, and some personal loans, but I didn’t think PayPal was offering them.
I missed two payments – one in March and April, and found out later that I could have taken a break.
Those two missed payments hit my credit file, which meant I was denied a mortgage, which I wanted to own a larger property for me and my mother, who was diagnosed with coronavirus.
I asked PayPal to remove these tags, citing the FCA’s guidelines, but they refused. Is that correct? – Hadi Ahmed, West London, via email
George Nixon, that’s the moneyAnd the Responses: By the time you wrote to This is Money in mid-March, you described yourself as having gone through roughly nine months of back and forth with PayPal and credit reference agency TransUnion.
You said that after becoming aware of both the signs of a missed payment and the availability of a payment holiday on your PayPal Credit account, the first of which took place in May 2020, I filed a complaint with the company in June.
The FCA guidelines you used in your claim, and in a subsequent letter you sent to PayPal in January, state that borrowers should not be denied corporate operational difficulties in setting up payment authorizations.
Your argument was that because you didn’t know, and you said you were never told, that the PayPal payments holiday is available.
The FCA’s guidance states that “firms must work with clients to put them in the position they would have been in, had they received the timely forbearance”.
Companies should ensure that no default or arrears fees are charged as a result, and work with clients and credit reference agencies to ensure that any necessary corrections are made to credit files so that no deterioration is recorded in relation to this period.
PayPal insisted that payment authorizations had been available since mid-March, after Mr. Ahmed defaulted on his first payment
In your email to This is Money, you told us that the company “never acknowledged” the FCA directives you included in your complaint.
However, this appears to be very much a “he said, she said” situation, in which the company denies any operational difficulties or that it needs to correct your credit file.
PayPal said it offered interest-free payment breaks of 30 days from mid-March and three months once FCA required them at the beginning of April.
Because of travel restrictions and the drop in the price of oil, which sometime on April 20 of last year fell below zero, you said you were struggling to earn any income.
I said, “I took a short trip to Doha, Qatar, for a six-day job in February, and then with oil prices actually crashing from about $50 to $20, as the pandemic really became global, my contract was terminated.”
“I did not receive payment for the hours I worked in February until early May.”
Fortunately, you said you were now able to work again, but added: ‘I was unable to travel to Qatar from around April to October due to the border closure enacted by the Qatari government due to the coronavirus.
There is usually a fair amount of work available, but the problem is the current travel bans and quarantines.
You get to work these days but you can’t access the site. And with this kind of role, there’s so much you can do from home.
The first balance you missed from PayPal was on March 7, before the company introduced a 30-day payment break, and you missed another payment a month later.
You claim to us that after seeing your emails and postal statements, you were never told about that missed first payment which the company again denies. She said she sent multiple messages via email and mail that included the fact that help was available.
But we get to the central dispute after this point in April, when you called the company to settle your arrears.
At this point, as you said, you were able to settle the missed payments on your other expenses.
‘When I spoke on the phone to the lady from PayPal,’ I said, ‘I mentioned I was having difficulties traveling to work and wasn’t sure if I could make my payments on time, yet you didn’t mention that there was a payment freeze available’. we.
I clearly remember this because I actually made my credit payments over the phone and not on the website. I mentioned to her that I was having difficulties hence not being able to pay on time and she offered no support or made me aware of the fact that a payment freeze was on offer.
But the company objects to this. She said the recording of two separate calls, including this one, did not indicate that you needed any assistance, and said that if he had been made aware of any difficulties, he might be able to help you.
In response to the suggestion that the company’s customer service asked if he needed help, she told us from Doha, Are you currently at work: ‘I’m sure if they had offered me a payment freeze, I would have taken it up.
She might have said, ‘Are you all right,’ I said, ‘I should be,’ and because nothing else was forthcoming, I left it at that.
Doha, in Qatar, where Mr. Ahmed is currently working
This situation meant that by the time you had two payment holidays on your PayPal Credit account, first in May and then again in August, the company reported two missed payments on your credit file.
After being unable to get anywhere with PayPal or TransUnion, which PayPal said you needed to contact to remove the tags, which is not true according to FCA rules, you wrote to us in March.
We previously fixed a payment holiday bug related to a nationwide mortgage borrower in December.
As a result, we place your claims on PayPal. In response, a company spokesperson said: “Mr Ahmed’s first missed payment, according to our records, was on March 7.
We have no record of him reporting any payment issues until April 7th, by which time he was two months overdue from his February and March 2020 statements.
“We have no record of him reporting any payment issues until April 7, by which time he was two months behind payment due from his February and March 2020 statements.”
We have an obligation as a responsible lender to accurately report a customer’s payment history to credit brokerage agencies.
In this case, Mr. Ahmed defaulted on two payments on March 7 and April 5. We believe this is accurate and therefore had an obligation to report this performance.
Had Mr. Ahmed called us to let us know that he was in financial difficulty; We were able to help and could have offered him an alternative solution.
We have a record of Mr. Ahmed asking for paid leave in May and again in August, both of which we agreed to and provided to him promptly.
However, we have no evidence of any operational delay or similar event resulting in non-payment of payments which means our reports need to be corrected.
“Please note that PayPal provides positive credit ratings to agencies as well when payments are made on time, which can build a customer’s credit rating.”
Following this decision, you have told us that you plan to take your case to the Financial Ombudsman Service.
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