Not upheld: credit agreement administration, default reporting, and complaint handling complaint against Tesco Mobile Limited

Decision detail

Summary

Mr P purchased a phone from Tesco Mobile using a fixed sum loan in September 2024. Due to fraud on his bank account, several direct debit payments were reversed, causing the account to fall into arrears. Mr P claimed Tesco agreed to defer the December 2024 payment but later reported the missed payments and default to credit reference agencies. Mr P complained that Tesco failed to provide adequate customer service, including multiple failed callbacks and account termination without proper notice. The ombudsman found that Tesco did not cause the missed payments, did not agree to defer the payment as claimed, and properly followed statutory procedures including providing a default notice and allowing more than the required 14-day period before terminating the account. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco did not cause the missed payments as they attempted to collect the instalments and the reversals were due to fraud on Mr P's bank account. While Mr P claimed Tesco agreed to defer the December payment, the contact notes only recorded a discussion about the possibility without confirmation of agreement. The ombudsman was satisfied that Tesco followed proper procedures by issuing a default notice in December 2024 and terminating the account in February 2025, which exceeded the mandatory 14-day minimum period required by the Consumer Credit Act. By 23 January 2025, the account was three months in arrears, meeting the ICO guidance threshold for recording a default. Tesco was obligated to report accurate information to credit reference agencies, and the ombudsman found no evidence that the reported information was inaccurate. While Tesco acknowledged failing to return one callback, this did not constitute significant distress or inconvenience to the extent claimed by Mr P.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website