Not upheld: Debt collection practices complaint against Creation Consumer Finance Limited

Decision detail

Summary

Mr P complained that Creation Consumer Finance Limited unfairly defaulted his credit account in February 2024 and subsequently sold the debt to a debt collection agent in January 2025, despite him being on a repayment plan and making regular payments. Mr P claimed he had not been notified of the default. The ombudsman found that Creation correctly issued a default notice on 8 January 2024 after the account had been in arrears for more than three months, and that the default was properly registered on 5 February 2024 in accordance with ICO guidelines. The ombudsman also found that selling the debt was a standard commercial practice and within Creation's discretion, even though Mr P was maintaining a repayment plan. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman distinguished between contractual payments (payments in line with the credit agreement when not in arrears) and repayment arrangements (agreed outside the credit agreement to assist during financial difficulty). The ombudsman found that even though Mr P was maintaining a repayment plan, his account remained in arrears for more than three months, which entitled Creation to register a default in accordance with ICO guidelines. The ombudsman also found that selling a debt is a standard commercial practice and does not breach any obligation, even when a repayment plan is in place. The ombudsman concluded that Creation accurately recorded the true conduct of the account and acted within its rights.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website