Upheld: account management error, credit file reporting, poor communication regarding refund process complaint against CREATION CONSUMER FINANCE LIMITED

Decision detail

Summary

Miss M complained that Creation Consumer Finance Limited incorrectly recorded her account as in arrears after she requested a payment date change, resulting in a missed payment being reported to her credit file. When Miss M made an additional payment to mitigate credit file damage and later requested a refund, Creation refunded the amount from a previously repaid purchase, reopening that agreement without properly explaining the action. The ombudsman upheld the complaint, finding that while Creation had removed the arrears reporting and confirmed no interest would be charged, it should have better communicated the refund process to Miss M. The ombudsman ordered Creation to pay £250 total compensation (£150 additional to the £100 already paid) for the distress and inconvenience caused.

The Ombudsman's reasoning

The ombudsman found that while Creation's initial mistake in recording arrears was not in dispute, the key issue was whether Creation had done enough to remedy it. The ombudsman was satisfied that removing the negative credit file reporting was fair and reasonable. However, the ombudsman found that Creation should have better explained the refund process before refunding the overpayment from a repaid purchase, as this caused Miss M unnecessary concern about potential interest charges. The ombudsman concluded that £250 total compensation was appropriate to reflect the distress and inconvenience caused, noting that Creation had responded relatively quickly to the initial complaint and had taken steps to prevent further financial harm to Miss M.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website