Upheld: incorrect credit file reporting of default after IVA completion complaint against CA Auto Finance UK Ltd

Decision detail

Summary

Miss S complained that CA Auto Finance UK Ltd continued to report an active default on her credit file after her Individual Voluntary Arrangement (IVA) was completed in August 2024. The hire purchase agreement had been included in the IVA after Miss S entered financial difficulties in 2019, and CAF had repossessed the car in 2021. Although Miss S completed all IVA payments, CAF did not update the credit file to show the default as satisfied, claiming they had not received the completion certificate. The ombudsman upheld the complaint, finding that CAF should have proactively sought the completion certificate once all IVA payments were received, rather than waiting for Miss S to provide it. CAF was directed to update the credit file and pay £150 compensation, though the ombudsman rejected Miss S's claim for greater compensation as the reporting error did not definitively prevent her from obtaining a mortgage, only potentially affected available terms.

The Ombudsman's reasoning

The ombudsman found that CAF was entitled to issue and update the default while the IVA was ongoing, as this is permitted under credit reporting rules. However, once the IVA was completed in August 2024, CAF should have marked the default as satisfied. Although CAF claimed they never received the completion certificate, as a party to the IVA they knew when all payments would be received and should have proactively chased for the certificate rather than waiting for Miss S to provide it. The ombudsman rejected Miss S's claim for greater compensation, finding that the failure to mark the default as satisfied did not definitively prevent her from obtaining a mortgage, only potentially affected the terms available, and the impact was limited to a relatively short period between August 2024 and early 2026.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website