Upheld: Credit file / adverse marker disputes complaint against Arrow Global Massey Limited

Decision detail

Summary

Mr S complained that Arrow Global Massey Limited improperly reported a default to his credit file. His credit card fell into arrears and was sold to a debt purchaser; Arrow later took over servicing the account. Mr S had made only token payments of £1 per month since November 2016 on a balance of £2,173.27. Although Arrow was not responsible for initially registering the default, the ombudsman found they should have questioned its fairness given the transaction history and ICO guidance on token payments and default timing. The ombudsman upheld the complaint, requiring Arrow to backdate the default to 1 May 2017 (which would result in removal as it exceeds six years) and pay £150 compensation for the distress caused by not selecting the appropriate date.

The Ombudsman's reasoning

While Section 88 of the Consumer Credit Act 1974 requires a default notice to be served, the ombudsman found that even without proper notice, Mr S likely could not have afforded to remedy the breach. However, the ombudsman was concerned that the default was not reported until 2022/2023 despite Mr S being in arrears since December 2015. The £1 monthly token payments from November 2016 constituted a temporary arrangement that could never realistically be repaid. According to ICO guidance, defaults should typically be recorded within 3-6 months of arrears, and token payments should result in default recording. Arrow should have questioned the fairness of the default date given the transaction history. The ombudsman determined 1 May 2017 was the appropriate date to backdate the default to, which would result in the default being removed as it would exceed six years.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website