Partially upheld: default reporting, forbearance, communication failures complaint against American Express Services Europe Limited

Decision detail

Summary

Mrs M complained that Amex failed to offer forbearance when she proactively contacted them in June 2024 about anticipated income reduction, instead defaulting her account. The ombudsman found that Amex's Regain plan was reasonable given Mrs M's negative disposable income and that the default was fairly recorded when the account reached 3-6 months in arrears, consistent with ICO guidance. However, Amex's communication was deficient, with confusing letters sent simultaneously and insufficient clarity about when a default would be recorded despite a payment arrangement. The complaint was partially upheld and £150 compensation ordered for distress and inconvenience, but the default itself was not removed from the credit file.

The Ombudsman's reasoning

The ombudsman found that while Amex's decision to offer the Regain plan was reasonable given Mrs M's negative disposable income and the likelihood of rapid arrears accumulation, the firm failed to communicate clearly about the process and its impact on her credit file. The default itself was fairly applied in line with ICO guidance (accounts between 3-6 months in arrears) and was an unavoidable outcome of Mrs M's financial circumstances. However, the confusing letters sent on the same day and the lack of clarity about when a default would be recorded despite a payment arrangement caused unnecessary distress. The ombudsman distinguished between a statutory default notice under the Consumer Credit Act 1974 and credit file reporting, noting these are separate matters.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website