Partially upheld: handling of payment difficulties, forbearance, administrative error in payment pause implementation complaint against Zilch Technology Limited

Decision detail

Summary

Mrs F complained to Zilch Technology Limited about how it handled her request to delay repayments in October 2025 when she was struggling financially due to an unexpected bill. This was the second consecutive month she had sought assistance. Zilch offered formal forbearance options (payment pause or payment plan), both of which would restrict account use and be reported as arrangements to credit agencies. Mrs F selected the pause option for payments due 17-26 October 2025, requesting they restart on 27 October 2025. Zilch initially set the pause to end on 20 November 2025, causing confusion, and took two days to implement the pause, resulting in a missed payment. The ombudsman partially upheld the complaint, finding Zilch's communication was clear but the administrative errors caused distress warranting £50 compensation and removal of missed payment markers from Mrs F's credit file.

The Ombudsman's reasoning

The ombudsman found that Zilch's explanation of the two formal forbearance options (payment pause or payment plan) was clear and fair, and Mrs F was adequately informed of the consequences before agreeing. Since Mrs F could not afford the contractually due payments and did not use the snooze option, some form of account restriction was inevitable. However, Zilch's initial error in setting the pause end date to 20 November 2025 instead of the requested 27 October 2025 caused unnecessary distress and required Mrs F to seek clarification. Additionally, the two-day delay in implementing the pause (18-20 October 2025) resulted in a missed payment that would not have occurred had the pause been set up promptly. The ombudsman determined that any missed payment markers recorded during this two-day period should be replaced with arrangement markers, as the missed payment was caused by Zilch's administrative error rather than Mrs F's inability to pay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website