Upheld: Credit file / adverse marker disputes complaint against Marsh Finance Limited

Decision detail

Summary

Mr C entered into a hire purchase agreement with Marsh in July 2022 for an £18,180 car. In February 2024, he changed his payment date from the last day of the month to the 1st, resulting in no payment in February but a payment on 1 March 2024. Marsh classified this as arrears but did not notify Mr C until June 2025, by which time the arrears had been registered on his credit file, damaging his mortgage prospects. The ombudsman upheld the complaint, finding that Marsh failed to clearly communicate the consequences of the payment date change and unreasonably delayed the arrears notice, denying Mr C the opportunity to address the issue earlier. Marsh was directed to refund the additional payments, remove the arrears from the credit file, pay 8% interest, and provide £250 compensation.

The Ombudsman's reasoning

While Marsh was technically correct that arrears accrued and were correctly recorded, the ombudsman found that Mr C was not treated fairly. The key issues were: (1) Marsh failed to clearly communicate at the time of the payment date change that Mr C would need to make payments on consecutive days (end of February and 1 March 2024); (2) Marsh delayed sending a specific arrears notice until June 2025, denying Mr C the opportunity to address the issue earlier; (3) when Mr C was finally informed and made arrangements to pay, Marsh did not explain that paying in instalments would keep arrears on his credit file, which would have been material to Mr C's mortgage application. The ombudsman concluded Mr C should be put in the position as if no arrears had accrued.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website