Partially upheld: unauthorized use of personal details / alleged fraud / failure to investigate fraud claim complaint against Telefonica UK Limited

Decision detail

Summary

Mrs T complained that her personal details were used by a close family member (X) without authorization to open a Telefonica account and take out multiple loans for mobile handsets between 2018 and 2024. She claimed she only discovered the fraud in December 2022 but Telefonica failed to investigate her allegations properly. The ombudsman found that while Mrs T likely gave apparent authority to X based on delivery records, sustained payments, and her awareness of X possessing new handsets, Telefonica's failure to investigate the fraud claim and engage with Mrs T caused her significant distress. The complaint was partially upheld, with Telefonica ordered to pay £200 compensation while remaining entitled to pursue the outstanding debt, subject to treating Mrs T with forbearance regarding her financial circumstances.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test to assess whether Mrs T gave actual or apparent authority to X to apply for the loan. While Mrs T claimed she was unaware of the borrowing until December 2022, the evidence suggested otherwise: devices were delivered to her home address, Direct Debits were maintained for years, Mrs T saw X with new handsets without questioning, and she had access to her credit file via an app. The ombudsman found that Mrs T likely allowed X to use her personal details, either explicitly or implicitly through apparent authority. However, Telefonica failed to investigate Mrs T's fraud allegations properly and caused her significant distress through delay and lack of engagement, warranting compensation of £200.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website