Upheld: Account administration errors complaint against T.B.I. Financial Services Ltd.
Financial Ombudsman decision DRN-4991114 of 2018-09-18T00:00:00+00:00. Account administration errors complaint against T.B.I. Financial Services Ltd.. Outcome: Upheld.
Decision detail
| Reference | DRN-4991114 |
|---|---|
| Decision date | 2018-09-18T00:00:00+00:00 |
| Firm | T.B.I. Financial Services Ltd. |
| Product | Credit card |
| Claim type | Account administration errors |
| Outcome | Upheld |
| Remedy | TBI must: (1) backdate all interest to 0% from 10 August 2007 and recalculate the account; (2) remove £470 in incorrectly added legal fees and recalculate any interest added to that amount; (3) cease charging interest going forward; (4) notify Mrs P of the new debt balance and provide annual account statements; (5) permit Mrs P to repay the debt ahead of the court-ordered £10 monthly schedule if she wishes. |
Summary
Mrs P complained about T.B.I. Financial Services Ltd charging 12% per annum post-judgment interest on a credit card debt for approximately ten years following a 2007 county court judgment. Despite Mrs P maintaining regular £10 monthly repayments from 2009 onwards, the debt increased substantially due to interest charges. When Mrs P was diagnosed with a degenerative disease, her husband discovered the debt had grown significantly and queried the charges. TBI had never sent statements to Mrs P during the entire post-judgment period. The ombudsman found TBI either was not legally entitled to charge post-judgment interest on a Consumer Credit Act regulated debt, or if entitled, failed to comply with its obligation to send annual statements. The ombudsman also found TBI failed to treat Mrs P fairly as a vulnerable consumer. The complaint was upheld and TBI was ordered to backdate all interest to 0%, remove incorrectly added legal fees, cease charging interest, provide annual statements, and allow early repayment.
The Ombudsman's reasoning
The ombudsman found that TBI was either not legally entitled to charge post-judgment interest on a Consumer Credit Act regulated debt, or if entitled, failed to comply with its statutory obligation to send annual statements under s.78(4) of the Consumer Credit Act 1974. Either way, the failure to keep Mrs P informed meant she lost the opportunity to challenge the interest or settle the debt sooner. Additionally, TBI failed to treat Mrs P fairly as a vulnerable consumer facing a degenerative disease by not providing her with a realistic path to settle her debt. The ombudsman rejected TBI's argument that the complaint fell outside jurisdiction, finding that post-judgment management issues were distinct from matters already decided by the court. The ombudsman also found that TBI's suggestion that Mrs P should release equity from her home was inappropriate and that questioning whether settlement funds were 'disingenuous' would undermine fair treatment principles.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| T.B.I. Financial Services Ltd., all decisions | 8 | 19% |
| Account administration errors, all decisions | 25,844 | 25% |
| Credit card, all decisions | 25,870 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website