Not upheld: default during breathing space; communication and service of statutory notices complaint against Capital One (Europe) plc

Decision detail

Summary

Miss H complained that Capital One unfairly defaulted her credit card account during a breathing space period without adequately informing her of the risk. She claimed she was unaware that missing payments during breathing space could result in default and that she did not receive the Default Notice or other important letters. The Ombudsman found that Capital One had clearly explained during the initial breathing space call that missed payments would be reported and the account could be restricted or defaulted if the arrangement became long-term, and that it followed a reasonable escalation process consistent with these warnings. Although Miss H did not receive the Default Notice by post, the Ombudsman found Capital One properly served it to her correct address in accordance with legal requirements and had no reason to know the letters were not reaching her. The complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman found that Capital One clearly communicated to Miss H during the breathing space arrangement that while she did not need to make minimum payments, missed payments would still be reported to credit reference agencies and the account could be restricted or defaulted if the breathing space became long-term. The firm followed the pattern it had described to Miss H: sending a restriction notice after four missed payments and a Default Notice after six missed payments. Although Miss H did not receive the Default Notice by post, Capital One properly served it to her correct address in accordance with the Consumer Credit Act 1974, and the firm had no reason to know the letters were not reaching her. The Ombudsman rejected the argument that Capital One should have used alternative communication methods (email or telephone) during breathing space, as such communications are restricted during breathing space and Miss H had access to her statements and app. The Ombudsman found it reasonable to expect Miss H to monitor her account and contact Capital One if she was not hearing from them, particularly given she had been warned of the timescales for restriction and default.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website