Not upheld: debt collection practices, enforceability of debt, statute barring complaint against Cabot Credit Management Group Limited

Decision detail

Summary

Mr R complained that Cabot Credit Management Group Limited failed to provide credit agreement documents, continued requesting payment despite the account being unenforceable, and pursued a statute-barred debt. The account was originally with lender L, sold to a debt purchaser, and serviced by Cabot. The ombudsman found Cabot was entitled to rely on the original lender's information and Mr R's own admission that he had not used the account since 2017 constituted acceptance of liability. While Cabot breached FCA rules by not clarifying the account's unenforceable status in a 14 February 2025 letter, they had already paid £100 compensation for this error. The ombudsman determined the debt fell within the six-year limitation period and was not statute barred, and that only a court could determine enforceability. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Cabot was not required to obtain all documents before asking for repayment, as debt companies generally rely on information from the original lender unless there is good reason to question it. Mr R's statement that he had not used the account since 2017 constituted an acceptance that the account was previously his, making it reasonable for Cabot to expect repayment. Regarding enforceability, while CONC 13.1.6(4) requires firms to clarify that unenforceable debts remain outstanding, the ombudsman found only one breach in the 14 February 2025 letter. Regarding statute barring, the default date of 24 February 2023 falls within the six-year limitation period, and the account statements provided reasonable evidence of legitimate debt. The ombudsman noted that only a court can determine if a debt is truly unenforceable or statute barred, and that Cabot should not be held responsible for potential failings by the original lender.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website