Not upheld: unfair communication and treatment in debt arrangement review process complaint against NewDay Ltd

Decision detail

Summary

Mr F complained that NewDay treated him unfairly by sending a review letter without prior notification and requesting completion of an income and expenditure form after he had maintained a £100 monthly repayment plan perfectly for over two years. The November 2025 review letter outlined potential consequences including debt collection referral and credit file notification, which Mr F found inappropriate given his consistent payment history. NewDay acknowledged the communications could have been clearer and paid £100 compensation. The ombudsman upheld NewDay's position, finding that periodic reviews of payment arrangements are fair practice and that the compensation adequately addressed the communication failures, though the firm could have better explained the review process upfront and clarified that consequences only applied upon non-compliance.

The Ombudsman's reasoning

The ombudsman acknowledged that NewDay's communications lacked clarity and context, which caused Mr F worry and confusion. However, the ombudsman found it fair and reasonable for a lender to periodically review customer circumstances in payment arrangements at intervals to ensure the arrangement remains appropriate and affordable, even where payments have been maintained perfectly. The ombudsman noted that customer circumstances can change significantly over two years. While NewDay could have communicated better by informing Mr F upfront that reviews would occur and clarifying that consequences only applied upon non-compliance, the £100 compensation fairly reflected the distress caused by inadequate communications.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website