Not upheld: Credit file / adverse marker disputes complaint against MONEYBARN NO.1 LIMITED

Decision detail

Summary

Mr K complained that Moneybarn unfairly defaulted his conditional sale agreement account without advance notice, claiming this damaged his credit score and cost him a mortgage opportunity. The outstanding balance arose after voluntary termination of the car finance agreement in February 2025 and remained unpaid until August 2025. Moneybarn acknowledged it should have notified Mr K in advance and refunded £50, but maintained the default was correctly recorded. The ombudsman found the default was reasonable given the six-month period of non-payment and rejected Mr K's assertion that he would have repaid the debt, noting his stated negative disposable income and priority bill arrears at the time.

The Ombudsman's reasoning

The ombudsman found that recording a default was reasonable because the outstanding balance had been unpaid for several months (from 25 February 2025 to 11 August 2025). While advance notice would have been ideal, Moneybarn was not required to issue a default notice under Section 87 of the Consumer Credit Act 1974 as it had not taken the actions specified in that section. The ombudsman rejected Mr K's claim that he would have used savings to repay the debt, noting that Mr K had stated he had negative disposable income and was behind on priority bills at the end of July 2025, making it unlikely he had spare funds available.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website