Not upheld: unfair treatment during financial difficulty; refusal of payment arrangement; continued arrears reporting and collections activity complaint against Gain Credit LLC trading as Drafty

Decision detail

Summary

Mr R, holding a revolving credit facility with Drafty, fell into financial difficulty in late 2025 due to work changes and increased living expenses. He requested a formal £5 monthly payment arrangement, indefinite interest freeze, cessation of collections activity, and no negative credit reporting. Drafty refused the formal arrangement after an income and expenditure assessment revealed Mr R had negative disposable income of over £1,200 monthly and would need to borrow to make even token payments. Drafty offered a voluntary token payment option and a 60-day interest freeze but continued arrears reporting and collections correspondence. The ombudsman upheld Drafty's position, finding the proposed arrangement unsustainable under FCA rules and that accurate arrears reporting and account correspondence were required obligations.

The Ombudsman's reasoning

The ombudsman found that Drafty acted fairly because: (1) the proposed £5 monthly arrangement would not be sustainable given Mr R's negative disposable income exceeded £1,200 monthly, contrary to CONC 7.3.5C guidance; (2) payment arrangements are intended for short-term difficulties with clear prospects of resuming full payments, which was not evident here; (3) firms are required to report accurate information to CRAs reflecting the true account position, and Drafty's arrears reporting complied with ICO guidance; (4) continuing arrears correspondence is required to inform customers of their financial position; and (5) the initial 60-day freeze on interest and charges demonstrated forbearance while circumstances were assessed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website