Not upheld: default registration and complaint handling complaint against Moneybarn No.1 Limited

Decision detail

Summary

Miss A complained that Moneybarn unfairly registered a default on her credit file and failed to treat her fairly given her vulnerabilities. She had entered into a conditional sale agreement for a car in October 2022 but experienced financial difficulties leading to arrears. In November 2024, she voluntarily terminated the agreement and returned the car, owing £3,142.14 to reach the 50% liability. When Miss A failed to pay this amount despite multiple contact attempts and offered payment plans, Moneybarn issued a default notice on 26 March 2025 and registered the default. The ombudsman found Moneybarn had acted fairly by demonstrating forbearance, clearly communicating terms, and following industry best practice, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Moneybarn demonstrated forbearance and due consideration during Miss A's financial difficulties by offering voluntary termination as an option. The 50% liability calculation of £3,142.14 was correct and clearly communicated to Miss A before she chose this option. Following voluntary termination, Moneybarn made repeated attempts to contact Miss A about the outstanding balance, offered a reduced settlement amount of £2,199, and proposed affordable payment plans starting at £40 per month. When Miss A failed to respond or make payments despite these efforts, and given that three months had passed since the amount was communicated, Moneybarn's decision to send a default notice on 26 March 2025 was fair and in line with ICO best practice. The ombudsman found Miss A did receive Moneybarn's correspondence as evidenced by her direct responses to it. While Moneybarn's complaint handling could have been better, this did not affect the fairness of the default registration decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website