Gary Sleet* no longer officially exists as far as the financial sector is concerned. He doesn’t qualify for a mortgage, personal loan or cell phone contract, and he would be turned down if he applied for a credit card.
Sleet, who lives in Paisley, Renfrewshire, has not committed any offenses and has never missed a payment. His credit rating was destroyed, he says, because his local council changed his permanent number on the electoral roll. This means his address does not match the details on Royal Mail’s Postcode Address Finder (PAF), which is used by most companies to verify customers.
“When agencies and lenders and banks try to find me, they use the mailing address database,” he says. “Renfrewshire Council has effectively denied my existence by refusing to update this record.”
UK addresses are recorded in three official databases – the local authority street name and numbering register, the electoral roll and the PAF, compiled by Royal Mail.
If there is a discrepancy between them, a resident’s full credit history may not show up when lenders perform a credit check, and their credit score will drop.
This is because all companies and organizations buy their databases from Royal Mail. If an address does not appear on PAF, it is considered non-existent by traders.
According to Royal Mail, inconsistencies occur because while it is required to list addresses in the format registered by local authority road naming and numbering departments, electoral roll entries can be changed for a fee at the request of home owners.
Small anomalies can potentially make a life-changing difference. Homeowners who substitute “apartment” for “apartment” or a house name for a house number can find themselves in a similar situation to a serial debtor as far as lenders and retailers are concerned. And residents of buildings that have been converted into apartments, or student accommodation, face being in financial limbo as the apartment numbers may not be individually listed on the PAF.
It’s a problem that particularly affects residents in Scotland due to mysterious numbering systems in older buildings. Historically, tenement flats were registered by the street number of the building, which floor they were on and how far they were from the top of each staircase. When Royal Mail computerized its database, it counted the number of flats in a block and assigned consecutive numbers.
Sleet, a university researcher, discovered the problem when he applied for a loan to consolidate student debt and his application was rejected due to poor credit.
When he checked, he found that his regular number was listed as ½/75 instead of 75/2 listed by the PAF. “When I asked the municipality to correct my data so that they link together on credit reports, it said that I had to get permission from all the owners in the building, even though two of the four apartments are empty and we are the owners,” he says. .
Renfrewshire Council denied that it had recently changed Sleet’s address and insisted that all tenants in the building must agree an address format that it and Royal Mail will adopt.
It says: “We have offered to assist Mr Sleet in contacting the other owners/residents and will continue to contact him to ensure this is resolved as soon as possible.”
The Information Commissioners Office, which enforces information rights, said Observer it knew of no legislation preventing the alteration of an incorrect address on the electoral roll without the consent of other residents. Under Article 16 of the UK GDPR, individuals have the right to have inaccurate personal data rectified.
Londoner Jon Swinden was unable to insure his flat after he discovered his address had been recorded in five different formats by his bank, TV licences, council and utilities.
“I received a renewal notice from Halifax, which has insured my home since 1991, and noticed that the address on the letter showed the building number but not the number of my apartment,” he says. “I brought this to my attention and the correct entry could not be found in the database so I was informed that I can no longer be offered insurance.”
When he tried to find a quote elsewhere, he discovered that his apartment number was not recognized by any insurer. “My apartment is one of four in a converted property,” he says.
“As far as I can tell, only the basement is a separate apartment, and the rest is listed identically under the building number.”
Royal Mail explained that buildings with multiple occupants sharing a front door must be registered as a single property on the PAF. The apartments in it are listed individually in a separate database, which companies can choose to subscribe to for a fee. Halifax agreed to renew its policy after Observer intervened.
A similar problem threatened to ruin first-time buyer Victoria Smith’s London property purchase. “We face being unable to secure a mortgage and losing the property because the flat we are currently renting is listed as ‘Flat C’ by Royal Mail and my bank and as ‘Top Floor Flat’ on the electoral roll ,” she says.
“It was the same with our previous address. It was ‘Ground Floor Flat’ on the electoral roll and only the building number ’37’ with Royal Mail. This has affected my credit report because Equifax and TransUnion have no record of me under Royal Mail- format.”
Smith and her partner eventually secured a mortgage offer through another broker.
Homeowners should ensure that their address appears in the same format on the electoral roll, PAF and all payment accounts, as a failed credit check leaves a footprint that can deter other lenders.
James Jones, from credit reporting agency Experian, also advises on keeping track of personal information with the three main credit reporting agencies. He says, “Checking your credit report from time to time can help spot irregularities like this and get them fixed before they lead to a financial problem.”
* The name has been changed.