Not upheld: default marker registration and credit file reporting complaint against AMERICAN EXPRESS SERVICES EUROPE LIMITED

Decision detail

Summary

Miss F complained about a default placed on her credit file by American Express. She had entered into a forbearance plan and subsequently a Debt Management Plan with a third-party agency, but no payments reached American Express or its agents between December 2022 and May 2023 due to confusion about which company was managing the debt. Although Miss F had applied for breathing space, American Express were unaware of this due to account cancellation and management transfers. The ombudsman found that American Express acted fairly in registering the default after the extended period of non-payment, as creditors must report an accurate account status even when DMPs are in place, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that while Miss F was making payments to her debt management agency, no payments were actually received by American Express or its agents for over five months. A default is typically issued after 3-6 months of missed payments, and even when a DMP is in place, creditors have an obligation to report an accurate reflection of the account status. Although Miss F had applied for breathing space, American Express were unaware of this due to the account management transfers. The forbearance plan already in place meant no interest or charges were applied. The May 2023 payment was only partial, so the default registration was justified and fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website