Not upheld: Credit file / adverse marker disputes complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr P complained that HSBC had misreported missed payments on his credit file, preventing him from refinancing his mortgage which became overdue for repayment in November and December 2024. The mortgage consisted of an original £1m interest-only loan from 2004 and a further advance of £200,000 from 2007. Mr P argued that HSBC failed to communicate interest rate changes, that he had made cumulative overpayments of £31,000, and that the credit file entries were inaccurate. HSBC took Mr P to court for possession, but the court adjourned proceedings while the FOS investigated. The ombudsman found that HSBC's credit file reporting was factually accurate and consistent with the payment record, that Mr P bore responsibility for ensuring correct payments given his choice of manual payments, and that the overpayment argument was invalid under the mortgage terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that lenders are permitted to report payment behaviour to credit reference agencies and must record factually accurate information. The credit file entries represent a rolling six-year history of payment behaviour, with arrears reported in terms of months of payments owed. Comparing Mr P's credit file against HSBC's accounting information, the ombudsman concluded that HSBC's reporting was consistent with the actual payment record. Regarding communication of rate changes, the ombudsman noted that Mr P had chosen manual payments over direct debit, placing responsibility on him to ensure correct payments. Interest rate changes are well-publicised, and Mr P should have made enquiries if he did not receive letters. The ombudsman rejected Mr P's overpayment argument, explaining that overpayments are amortized to reduce the outstanding balance and recalculate interest, not accumulated as a reserve. The ombudsman concluded that Mr P knew well in advance of the repayment deadlines and failed to ensure he could meet his contractual obligation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website