Not upheld: Debt collection practices complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr B complained about Tesco Bank's administration of his credit card account, specifically regarding the recording of a default in August 2024 with a balance of approximately £4,500. Mr B argued the default was recorded incorrectly because Tesco Bank failed to issue required Notice of Sums of Arrears (NOSIA) notices for missed payments in January and February 2023, and that the default balance should be amended to reflect interest and charges that Tesco Bank later refunded due to this regulatory breach. Mr B also complained about being contacted by multiple debt collection agencies without adequate notification. The ombudsman found that although Tesco Bank's failure to issue NOSIA was a regulatory breach, it did not cause the default to be recorded incorrectly, as Tesco Bank had communicated with Mr B about arrears through other correspondence and the refund of charges did not change the fact that the account was in arrears. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that although Tesco Bank failed to issue required NOSIA notices, this regulatory failing was separate from the decision to register the default following sustained missed payments. Tesco Bank had communicated with Mr B on multiple occasions about missed payments and arrears before the default was registered, making him aware of the account status. The interest and charges were initially applied in accordance with the credit agreement terms; the refund occurred due to the regulatory breach preventing enforcement, not because the charges were incorrectly applied. Therefore, the refund did not change the fact that the account had fallen into arrears by August 2024. Regarding debt collection agencies, Tesco Bank was contractually entitled to transfer its rights and duties and was not required to inform Mr B when collection agencies changed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website