Not upheld: termination of hire purchase agreement and application of default complaint against Zopa Bank Limited

Decision detail

Summary

Mr I complained that Zopa Bank Limited unfairly terminated his hire purchase agreement for a car and applied a default to his credit file. Mr I had missed payments in December 2024 and April 2025, and despite attempting to arrange a direct debit from a new bank account, he did not provide the required documentation to verify the account details. Zopa Bank sent a default notice in July 2025 for arrears of £562.38 and terminated the agreement in August 2025 when Mr I did not remedy the default. Zopa Bank acknowledged it could have done more to contact Mr I and offered £60 compensation. The ombudsman found that Zopa Bank acted in accordance with legal requirements and that its compensation offer was fair and reasonable, placing responsibility on Mr I to ensure payments were made and rejecting his complaint.

The Ombudsman's reasoning

The ombudsman found that Zopa Bank acted in accordance with its legal requirements and regulatory guidance when it sent the default notice and terminated the hire purchase agreement. While Zopa Bank acknowledged it could have done more to contact Mr I prior to default, the ombudsman considered its apology and £60 compensation offer to be fair and reasonable. The ombudsman placed responsibility on Mr I to ensure payments were made, noting he should have been aware that payments were not being taken from his new bank account and should have made manual payments. The ombudsman acknowledged Mr I's vulnerability and family circumstances but was not persuaded that Zopa Bank was required to do more in response. The ombudsman found that the default accurately reflects Mr I's payment history and must remain on his credit file to comply with regulatory obligations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website