Not upheld: default registration during active dispute; debt collection practices complaint against TSB Bank plc

Decision detail

Summary

Miss F complained that TSB registered a default with credit reference agencies in December 2024 whilst her complaint about irresponsible lending was being considered by the FOS. She argued this breached CONC 7.14 regulations requiring suspension of debt recovery where a debt is disputed. TSB had issued a final response letter in April 2024 confirming the debt remained outstanding after investigating her irresponsible lending complaint. The Ombudsman found that TSB acted fairly and reasonably because it had already looked into and confirmed the debt, provided forbearance measures including freezing interest, attempted to arrange a repayment plan, provided clear information at each stage, and registered the default within industry guidelines. The complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman found that although Miss F had disputed the debt, TSB had already investigated the dispute and issued a final response letter in April 2024 confirming the outstanding debt. Under OFT Guidance, debt collection activity can continue where the dispute has been looked into and the debt confirmed. The default was registered within industry guidelines (five months of missed payments, within the three to six month range). TSB had provided forbearance by freezing interest and charges, attempting to arrange a repayment plan, and providing clear information at each stage before registering the default. The Ombudsman was not persuaded the action was punitive; rather, TSB was complying with its obligations to credit reference agencies to provide accurate information and was registering the default within appropriate timelines, which commenced the six-year record period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website