Upheld: credit broker error - unnecessary credit searches and credit file damage complaint against Evans Halshaw Limited

Decision detail

Summary

Mr M complained to Evans Halshaw about unnecessary credit searches on his file when refinancing a car finance balloon payment. Evans Halshaw, acting as a credit broker, had submitted Mr M's application to Lender M and Lender S in error after he had already been approved by Lender F, resulting in two additional hard credit searches. Evans Halshaw admitted the error was made by staff and offered to remove the searches and pay £100 compensation. Mr M rejected this, alleging fraud and demanding the commission Evans Halshaw would have earned if the more expensive Lender M finance had proceeded. The ombudsman upheld the complaint but found the £100 compensation fair and reasonable, as the actual impact was limited—the searches were removed, Mr M suffered no financial loss, and he obtained the cheapest finance option available.

The Ombudsman's reasoning

While Evans Halshaw's error resulted in two unnecessary hard credit searches being registered on Mr M's credit file, the impact was limited because the searches were subsequently removed and Mr M was not declined credit or offered less favourable terms as a result. Mr M ultimately took the cheapest finance option available (Lender F) and did not suffer financial loss. The appropriate remedy is compensation for the limited distress and inconvenience caused during the period of concern about potential credit impact, which should be fair and reasonable to both parties in line with FOS service standards.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website