Not upheld: Credit file / adverse marker disputes complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr S complained that Novuna unfairly defaulted his loan account and failed to inform him that the debt would be sold to a third party. Mr S fell into arrears in June and July 2024, and despite Novuna's attempts to contact him through letters, texts, emails, and phone calls, he did not pay the required amount by the 25 July 2024 deadline. Novuna recorded a default in October 2024 after Mr S had been in arrears for over three months. In December 2024, Mr S set up a payment plan with Novuna, but the debt was sold to a third party a few days later without Mr S being informed at that time. The ombudsman found that Novuna acted fairly in recording the default in accordance with ICO guidance, made reasonable attempts to contact Mr S, and had the contractual right to sell the debt. The ombudsman concluded that Mr S suffered no significant detriment from not knowing about the debt sale when setting up the payment plan, as the default had already been recorded and his payments were properly transferred to the debt purchaser.

The Ombudsman's reasoning

The ombudsman applied ICO guidance which permits default registration when a consumer is at least three months in arrears. By 28 October 2024, Mr S had been in arrears for over three months, making the default registration compliant with guidance. Novuna made reasonable attempts to engage with Mr S through multiple channels (letters, texts, emails, phone calls) before defaulting. The default notice gave Mr S until 25 July 2024 to pay £504.48, but his August payment was late and insufficient. The ombudsman found Novuna had the contractual right to sell the debt and that Mr S was not deliberately misled, as the agent would not have known about the sale. The ombudsman concluded that Mr S suffered no significant detriment from not knowing about the debt sale when setting up the payment plan, since the default had already been recorded and the payments were properly passed to the debt purchaser.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website