Not upheld: credit reference agency reporting accuracy and Consumer Duty compliance complaint against Mitsubishi HC Capital UK PLC, trading as Novuna Personal Finance

Decision detail

Summary

Mr W complained that Novuna unfairly reported his £44,000 loan to CRAs as £103,670 (including interest), which he believed misrepresented his financial commitment and harmed his creditworthiness. Mr W argued that Novuna should have disclosed how the loan would be reported to CRAs before he entered the agreement, and that this breached Consumer Duty. The ombudsman found that the reporting was accurate as it reflected Mr W's total liability to Novuna, including interest that was calculated in advance and applied from the agreement date. The ombudsman determined there was no regulatory requirement to disclose CRA reporting practices, and that Mr W had been provided with sufficient information about the loan terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that reporting the total amount payable (£103,670) was not inaccurate because this represented Mr W's actual liability to Novuna at that point in time. The ICO's principles state that current balance may comprise a combination of amount borrowed, interest and charges depending on product terms. Since interest was calculated in advance and applied from the agreement date, it was fair to report the total amount due. The ombudsman noted that while Consumer Duty requires higher standards, it does not require firms to act incompatibly with legal or regulatory requirements. There is no regulatory requirement to disclose how a loan will be reported to CRAs prior to entering the agreement. Mr W was provided with information about borrowing, interest calculation, deferral period and payments in his agreement, and was aware his account would be reported to CRAs.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website