Not upheld: Debt collection practices complaint against Raylo Group Limited

Decision detail

Summary

Mr C complained about a settlement figure provided by Raylo when he sought to end his mobile telephone hire agreement after 17 months. Mr C disputed the £43.39 settlement amount, claiming Raylo had added undisclosed interest contrary to early settlement regulations. Raylo clarified that the agreement was a non-interest-bearing hire agreement and that the settlement figure represented the balance of payments needed to reach the contractual 18-month early cancellation threshold. The ombudsman examined the agreement and found it contained no interest-bearing terms and clearly set out early cancellation charges and non-return fees. The ombudsman concluded Raylo treated Mr C fairly and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman examined the hire agreement and found no term allowing Raylo to apply interest. The agreement clearly stated that early cancellation charges would be calculated as the balance of hire payments up to 18 months. Since Mr C had made 17 payments, only one month's payment (£43.39) remained due to reach the 18-month threshold. The non-return fees were also clearly set out in the agreement. Raylo provided accurate information and clear explanations to Mr C regarding both the settlement figure and the optional non-return fee.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website