Not upheld: termination of loan agreement and default reporting following missed payments complaint against Hutchison 3G UK Limited (trading as Three)

Decision detail

Summary

Mr L complained that Three terminated his fixed sum loan agreement (device plan) for a mobile phone and reported a default to credit reference agencies. The complaint arose because Three failed to update his contact details correctly in November 2024, causing him to miss arrears letters and accumulate debt without his knowledge. Three partially upheld the complaint and offered compensation, but subsequently terminated the agreement again in November 2025 when Mr L failed to make a £58 payment under an agreed payment plan. The ombudsman found that while Three's initial contact details failure was a shortfall, the subsequent termination and default reporting were fair and reasonable because Mr L was aware of the payment plan and its consequences when he failed to make the required payment.

The Ombudsman's reasoning

The ombudsman acknowledged that Three's initial failure to update contact details correctly was a shortfall that caused Mr L not to receive communications and resulted in the account being sent to a debt collection agency. Three's partial uphold and offer of compensation (£75 plus £20 credit) was considered fair and reasonable at that time. However, once a payment plan was established in October 2025 with clear written warnings about the consequences of non-payment, Mr L was aware of his obligations. His failure to make the £58 payment due in November 2025, only seven days late, meant Three acted correctly in terminating the agreement and reporting the default. The ombudsman found that Three is required to report true and accurate information to credit reference agencies and was not persuaded that the information on Mr L's credit file was inaccurate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website