Not upheld: default registration fairness complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss C complained that HSBC unfairly registered a default on her current account after she failed to repay her overdraft. She argued the default was unfair because she had asked about a payment plan, did not receive arrears letters due to an outdated address, and demonstrated intent to repay through payment plans on other accounts. HSBC maintained it followed required procedures, sending multiple letters to the last known address and that Miss C had responsibility for updating her contact details. The ombudsman found HSBC's actions were fair and reasonable, noting Miss C had made no payments in over a year, failed to update her address, and did not contact the bank despite being aware of the debt. The complaint was not upheld and the default was not removed from her credit file.

The Ombudsman's reasoning

The ombudsman found that HSBC followed the required process for defaulting the account and that Miss C bore responsibility for not updating her address. While Miss C argued the default was unfair based on her intent to repay and reliance on phone advice, the ombudsman found these factors did not outweigh the objective facts: Miss C had made no payments in over a year, failed to update her address, and did not contact the bank despite being aware of the debt and receiving frequent contact attempts. HSBC has an obligation to default accounts typically between three to six months in arrears and report to credit reference agencies. The default was an accurate and fair reflection of how Miss C managed the account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website