Not upheld: credit file reporting during breathing space arrangement complaint against NewDay Ltd

Decision detail

Summary

Mr V complained that NewDay unfairly reported missed payment markers on his credit file while he was in breathing space arrangements. Mr V entered breathing space on 23 August 2025 due to changes in his benefits and uncertainty about universal credit payments, and later extended it on 20 September 2025. He subsequently agreed to a negative disposable arrangement in October 2025. Mr V objected to NewDay continuing to issue statements requesting contractual minimum payments and reporting arrears to credit reference agencies during these arrangements. The ombudsman upheld NewDay's position that breathing space pauses collection activity and interest/fees but does not prevent arrears from accruing and being reported, and that NewDay had clearly communicated these terms to Mr V. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that breathing space is a short-term arrangement that pauses collection activity and interest/fees but does not prevent arrears from accruing and being reported to credit reference agencies. The statement dated 7 August 2025 pre-dated the breathing space agreement, and although Mr V was not required to make the payment, the missed payment remained classifiable as arrears that NewDay was obligated to report. For the 7 September 2025 statement with payment due 2 October 2025, although Mr V had extended breathing space, NewDay was still under obligation to report the arrears. NewDay had clearly communicated these terms to Mr V, and the ombudsman found no error in the reporting of missed payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website