Not upheld: late payment fees and credit file reporting complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Ms C complained that Tesco Bank unfairly applied two £12 late payment fees and reported arrears to credit reference agencies after her direct debit payments failed in June and July 2025. Ms C argued she had previously maintained good payment history and that the arrears were short-term, and that she did not have sufficient time to resolve the issue before negative reporting occurred. The ombudsman found that while Ms C's direct debit failed, the obligation to pay remained with her, and she had approximately 6 weeks from the first missed payment to make a manual payment. The ombudsman concluded that Tesco Bank correctly applied the fees in accordance with the agreed terms and conditions and accurately reported the arrears, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that although Ms C had previously managed the account well and paid on time, a direct debit is not guaranteed and the obligation to pay remains with the account holder if it fails. The payment was already late by the time the letters were sent, so the timing of communications did not prevent the late reporting. Ms C had approximately 6 weeks from the first missed payment in June 2025 to make a manual payment before bringing the account current, indicating she had adequate opportunity to resolve the issue. Tesco Bank correctly applied fees in accordance with the agreed terms and conditions and accurately reported the arrears to credit reference agencies, with no evidence of error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website