Upheld: unfair credit file reporting and inadequate disclosure of arrears implications complaint against Lendable Ltd

Decision detail

Summary

Mrs J complained that Lendable Ltd unfairly reported arrears on her credit file after she changed her loan payment date from the 1st to the 24th of each month in June 2025. She made the June payment on 24 June (23 days late) and subsequently received continued arrears reporting in following months. Lendable's email communications explained that interest would accrue and could be paid as an overpayment, but did not clearly state that unpaid accrued interest would be reported as arrears to credit reference agencies. The ombudsman upheld the complaint, finding the initial late payment marker fair but the continued arrears reporting inadequately explained. Lendable was ordered to remove arrears markers once Mrs J pays the £46.02 accrued interest and to pay £200 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found it fair and reasonable to report the payment due on 1 June 2025 as late, since it was made 23 days after the due date and Mrs J requested the date change after the payment was already due. However, the ombudsman determined that Lendable failed to clearly explain in its email communications that accrued interest would be reported as arrears. While Lendable mentioned that late payments would generate an arrears balance, it was reasonable for Mrs J to assume this referred only to the unpaid payment itself (which she subsequently paid on 24 June), not to future accrued interest. Lendable's explanation about interest accrual and overpayment options did not make clear that unpaid interest would appear as arrears on the credit file. The ombudsman concluded this lack of clarity was unfair, though the arrears reporting itself was technically accurate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website