Not upheld: unfair account closure and default reporting complaint against NewDay Ltd trading as John Lewis Credit Card

Decision detail

Summary

Mr C complained that NewDay unfairly closed his credit card account and reported a default following missed payments during a period of ill health and bereavement. Mr C argued that had he known about updated bank details, his January payment would have reached NewDay on time, preventing the account termination. The ombudsman found the complaint not upheld, determining that the account termination was reasonable given the extended period of arrears dating back to August, and that NewDay acted fairly by not defaulting the account despite the missed payments. The ombudsman noted that Mr C had accessed information about the bank detail changes online and that NewDay had already provided support through a payment holiday arrangement.

The Ombudsman's reasoning

The ombudsman concluded that NewDay's decision to terminate the account was reasonable because the account had been in arrears for a significant period dating back to August of the previous year, not solely due to the late payment in January. While the ombudsman acknowledged Mr C's difficult personal circumstances, the extended period of arrears and the support already provided (including the payment holiday) meant the termination was not unreasonable. The ombudsman also noted that NewDay acted fairly by choosing not to default the account despite the missed payments, and that Mr C had access to information about the bank detail changes.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website