Not upheld: Credit file / adverse marker disputes complaint against Lloyds Bank PLC

Decision detail

Summary

Ms I complained that Lloyds unfairly reported adverse credit information following an administrative error where a £3 monthly fee was charged after she switched accounts, leaving her temporarily overdrawn. The adverse credit reporting led to her mortgage application being declined and caused her significant stress. Lloyds accepted the error, agreed to remove the adverse information, and paid £390 in compensation. Ms I sought additional compensation arguing the adverse information could impact future credit applications and insurance premiums. The ombudsman did not uphold the complaint, finding that while the error caused actual distress and a mortgage decline, compensation should reflect actual rather than speculative impact, and that the credit file correction plus £390 was fair redress.

The Ombudsman's reasoning

The ombudsman accepted that Lloyds' administrative error caused Ms I distress and impacted her mortgage application. However, the ombudsman distinguished between actual impact (mortgage application decline, stress, and broker appointment costs) and potential future impact (hypothetical higher rates or insurance premiums). The ombudsman found that compensation should be based on actual impact rather than speculative harm, and that the combination of credit file correction and £390 compensation was fair and in line with similar cases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website