Not upheld: unfair default reporting and irresponsible lending complaint against MARKS AND SPENCER FINANCIAL SERVICES PLC (M&S Bank)

Decision detail

Summary

Miss D complained that M&S Bank unfairly defaulted her credit card account after placing her on a 'no affordability plan' during a period of financial difficulty when she was unemployed. Miss D argued she would not have agreed to the plan had she known it could result in default, and claimed M&S should have recognised she was impaired due to alcohol use during the calls. M&S defended the default as accurate reporting, stating they had explained the default risk to Miss D. The ombudsman found the complaint not upheld, concluding that M&S had clearly communicated the default risk multiple times, Miss D's behaviour did not clearly indicate impairment, and her account would likely have defaulted anyway given her lack of disposable income and no guaranteed future income source.

The Ombudsman's reasoning

The ombudsman found that M&S made Miss D aware on more than one occasion that her account would likely default as a result of the no affordability plan. While acknowledging Miss D's personal difficulties, the ombudsman concluded it was not immediately apparent from the calls that Miss D was unable to make decisions on her own behalf, and her behaviour could reasonably be attributed to the eating issues she had disclosed rather than impairment. Critically, the ombudsman reasoned that regardless of the plan, Miss D's account would likely have defaulted anyway due to her lack of disposable income and no guaranteed future income source, as she was unemployed with only a potential property sale as a future income source with no definitive timeline.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website