Not upheld: Credit file / adverse marker disputes complaint against PayPal UK Ltd

Decision detail

Summary

Mr O complained that PayPal UK Ltd unfairly defaulted his PayPal Credit account in May 2024 after he cancelled his direct debit in January 2024 and missed subsequent payments. Mr O claimed PayPal blocked his account access, preventing payment, and failed to provide sufficient warning or a valid default notice. PayPal provided evidence of regular email communications about arrears and a valid default notice sent in April 2024. The ombudsman found that PayPal acted in accordance with ICO guidance by defaulting the account after three to six months of arrears, that a valid default notice was sent to the correct address, and that there was no evidence the account was blocked prior to default. The complaint was not upheld.

The Ombudsman's reasoning

PayPal was obliged to ensure Mr O's credit file accurately reflected his payment history. Under ICO guidance, an account should be defaulted once three to six months of arrears have accrued. Mr O missed payments from January 2024 and PayPal defaulted in May 2024, which was within the permitted timeframe. A valid default notice was sent to the correct address. There was no evidence that PayPal blocked Mr O's access prior to default, so he was not prevented from making payments. PayPal therefore met its obligations and was not required to amend the credit file information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website