Not upheld: unfair default registration on credit file complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Miss A complained that Barclaycard unfairly registered a default on her credit file following a life-threatening medical emergency during childbirth in early 2025. She argued the default was disproportionate given her vulnerability, communication issues regarding her address update, and her non-receipt of the default notice. Barclaycard had sent arrears notices and a default notice but Miss A did not contact them until after the default was registered in December 2025. The ombudsman found that Barclaycard correctly registered the default in accordance with ICO guidance, as Miss A had been at least three months in arrears on her original agreement and had missed payments on her reduced repayment plan. The ombudsman concluded that Miss A ought to have been aware of the risk of default and was unlikely to have had the financial means to prevent it, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied ICO guidance which recommends defaults be registered once an account is three to six months in arrears, and specifically permits defaults to be filed when a payment is missed on an arrangement to pay if the customer was at least three months in arrears on the original agreement. Miss A met these criteria. Although the ombudsman acknowledged Miss A's vulnerability and the address update issue, it found that: (1) the default notice was correctly addressed to her new address and Barclaycard cannot be held responsible for postal service failures; (2) Miss A ought to have been aware her account was in default given the arrears that had accumulated; (3) Miss A had been given clear notice in 2023 that missed payments would result in default; (4) even if Miss A had received notice, she was unlikely to have had the financial means to clear the arrears of approximately £300; and (5) Barclaycard had an obligation to accurately report account management to credit reference agencies. The ombudsman found that Barclaycard's decision to backdate the default to July 2023 was more than fair and reasonable as it would cause the default to expire sooner.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website