Upheld: unfair account management and failure to provide clear information about payment restrictions complaint against Zilch Technology Limited

Decision detail

Summary

Mr D complained about Zilch's handling of his account after being unable to increase his repayment plan beyond £5 per month despite his improved financial circumstances. After initially agreeing to two repayment plan changes, Zilch refused a third change citing a two-change limit policy that was not disclosed in the terms and conditions. Although Zilch advised Mr D could make manual £5 payments, this method was cumbersome and time-consuming, requiring ten separate transactions to pay £50. The ombudsman upheld the complaint, finding Zilch breached the Consumer Duty by failing to provide clear information about payment restrictions and did not fairly support Mr D's efforts to pay more. Zilch was ordered to pay £175 compensation for the distress and inconvenience caused.

The Ombudsman's reasoning

While the ombudsman found it reasonable for Zilch to have a policy limiting repayment plan changes to two occasions, the policy was unnecessarily rigid and not disclosed in advance. The ombudsman determined that Zilch failed to provide clear information about the restriction to £5 payment multiples and did not fairly support Mr D in making additional payments. The method of making additional payments was time-consuming and frustrating, requiring ten separate transactions to pay £50. The ombudsman considered this breached the Consumer Duty requirement to provide clear and timely information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website