Upheld: mishandling of fraudulent account, delayed resolution, improper credit reporting, failure to assist fraud victim complaint against Telefonica UK Limited trading as O2
Financial Ombudsman decision DRN-6349722 of 2026-05-11T00:00:00+00:00. mishandling of fraudulent account, delayed resolution, improper credit reporting, failure to assist fraud victim complaint against Telefonica UK Limited trading as O2. Outcome: Upheld.
Decision detail
| Reference | DRN-6349722 |
|---|---|
| Decision date | 2026-05-11T00:00:00+00:00 |
| Firm | Telefonica UK Limited trading as O2 |
| Product | consumer credit (fixed sum loan) |
| Claim type | mishandling of fraudulent account, delayed resolution, improper credit reporting, failure to assist fraud victim |
| Outcome | Upheld |
| Remedy | Telefonica must: (1) recall the debt from the debt collection agency; (2) remove all record of the fraudulent loan and associated airtime from Mr M's credit file; (3) pay £500 compensation if Mr M returns the device in good condition, or alternatively allow Mr M to keep the device in lieu of compensation; (4) provide written confirmation of what happened and instructions for returning the device at no cost to Mr M. |
Summary
Mr M received a device in August 2023 purchased under a fraudulently obtained fixed sum loan agreement with Telefonica. Although Telefonica acknowledged the fraud, it failed to resolve the matter promptly despite Mr M's repeated attempts to cooperate and return the device. Telefonica's fraud team provided inadequate assistance, failed to follow proper complaint procedures, recorded defaults on Mr M's credit file, and passed the debt to a collection agency before resolving the claim. The ombudsman upheld the complaint, finding Telefonica's handling caused considerable distress and inconvenience, and ordered the firm to clear the credit file, recall the debt, and pay £500 compensation (or allow Mr M to keep the device in lieu).
The Ombudsman's reasoning
Telefonica failed to handle a straightforward fraud case appropriately. Although the fraud was initiated by a third party, Telefonica took too long to resolve the matter despite Mr M's repeated attempts to cooperate and return the device. The firm's fraud team did not adequately assist Mr M, it failed to follow proper complaint procedures, it reported adverse credit information, and it passed the debt to a collection agency before resolving the fraud claim. This caused considerable distress and inconvenience. While no direct consequential financial loss was evidenced, compensation for distress and inconvenience was warranted.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Telefonica UK Limited trading as O2, all decisions | 10 | 55% |
Source
Read the original decision on the Financial Ombudsman Service website