Partially upheld: unfair credit file reporting; premature default recording; unfair missed payment markers complaint against Creation Consumer Finance Limited

Decision detail

Summary

Mr C complained that Creation Consumer Finance Limited unfairly recorded missed payment markers and a default on his credit file following a missed payment in August 2025, which occurred after his bank account was subject to fraud and his direct debit was cancelled. Creation advised Mr C on 12 August 2025 that he would need to make the August payment manually as a new direct debit could not be set up in time. The ombudsman found the August 2025 missed payment marker was fairly recorded as Mr C had clear notice, but upheld the complaint in part by finding the September 2025 missed payment marker and the default were unfairly recorded and must be removed. The ombudsman awarded £300 compensation for distress and inconvenience, finding insufficient evidence that Mr C suffered actual financial loss from declined mortgage applications or failed house sales.

The Ombudsman's reasoning

The ombudsman applied the principle that firms must take reasonable care to ensure information reported to credit reference agencies is fair, accurate, complete and up to date. The ombudsman used the ICO guidance as a benchmark for fair reporting practice. For the August 2025 missed payment, the ombudsman found Mr C had clear notice before the due date that manual payment was required, and the marker fairly reflected the arrears. For the September 2025 marker, the ombudsman agreed with Creation's own acceptance that it was unfair because a direct debit had been set up. For the default, the ombudsman found it was recorded too early (before three months arrears) and contrary to industry guidance, making it unfair. On compensation, the ombudsman acknowledged Mr C's distress but found insufficient evidence of actual financial loss from declined mortgage applications or failed house sales, and noted the August marker was fairly recorded so could not be compensated for.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website