Not upheld: default registration and credit file reporting; alleged failure to honour payment arrangement complaint against Santander UK Plc

Decision detail

Summary

Mr D complained that Santander unfairly defaulted his personal loan account and registered the default on his credit file after he sought financial support. Mr D claimed he had an arrangement in place and was unaware that breathing space would add arrears or lead to a default. Santander provided evidence of clear communication in March 2025 explaining the consequences of arrears, and on 3 June 2025 offered 30 days of breathing space with instructions for Mr D to call back on 3 July 2025 to set up a payment arrangement. There was no evidence Mr D made this contact or that any arrangement was established. The ombudsman found Santander's communication was clear and fair, and the default registration was appropriate given the account was in arrears with no arrangement in place at the time. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Santander provided clear and fair communication to Mr D about the consequences of his account falling into arrears and the potential for default. The breathing space period was offered as a temporary measure with explicit instructions for Mr D to contact Santander on 3 July 2025 to set up a payment arrangement. There is no evidence that Mr D made this contact or that any arrangement was established. The failure to receive a payment at the end of July 2025 further indicates no arrangement was in place. Therefore, when Santander sent a default notice in August 2025 and registered the default in September 2025, the account was genuinely in arrears with no arrangement in place. The timing of the default registration (seven months into arrears) was consistent with ICO expectations for defaults to be reported when accounts are three to six months in arrears.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website