Upheld: Debt collection practices complaint against BW Legal Services Limited

Decision detail

Summary

Mr K complained about BW Legal Services Limited's handling of a debt collection matter relating to an insurance payment he claimed he was not responsible for. When Mr K reported the matter to Police Scotland as a potential case of identity fraud (after BW Legal incorrectly referred him to Action Fraud which does not operate in Scotland), he provided BW Legal with a call reference and officer's name. BW Legal requested a crime reference number instead, and after a Police officer successfully contacted BW Legal in August 2020, the firm returned the account to the debt owner without notifying Mr K. The ombudsman found that while BW Legal's initial actions were reasonable, it failed in its duty to keep Mr K informed, causing him unnecessary distress and inconvenience. The complaint was upheld and BW Legal was directed to pay £150 compensation.

The Ombudsman's reasoning

The ombudsman found that while BW Legal acted reasonably in initially contacting Mr K based on traced details and in requesting a crime reference number (as per Police Scotland's standard guidance), the firm fell short in two key areas: first, it referred Mr K to Action Fraud despite this organisation not operating in Scotland, causing confusion; second and more significantly, BW Legal failed to notify Mr K that it had received contact from the Police officer and had returned the account to the debt owner. This lack of communication caused Mr K unnecessary distress and inconvenience, particularly as he had sent multiple follow-up emails seeking clarification. The ombudsman rejected BW Legal's argument that it had no legitimate interest in contacting Mr K after returning the account, finding that providing this update would have been a reasonable and important step.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website