Not upheld: debt write-off refusal / unfair treatment in debt collection complaint against Cabot Credit Management Group Limited

Decision detail

Summary

Mr G complained that Cabot Credit Management Group Limited treated him unfairly by refusing to write off a debt he owes, citing his difficult personal circumstances and the fact that other lenders had written off his debts. Cabot had placed a 12-month hold on contact but declined to write off the debt. The ombudsman found no regulatory requirement to write off validly owed debt and determined that while Mr G currently cannot afford to pay, his circumstances do not preclude future earning capacity and ability to repay. The ombudsman upheld Cabot's position that different lenders may have different write-off thresholds and that Cabot's 12-month contact hold appropriately addressed Mr G's vulnerabilities. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no regulatory requirement for Cabot to write off validly owed debt. While debt write-off might be reasonable if someone cannot afford any payments now or in the future, Mr G's circumstances, though currently difficult, do not preclude future earning capacity and ability to repay. Different lenders may have different thresholds for write-off, so other lenders' decisions do not establish an error by Cabot. Cabot's 12-month contact hold appropriately took Mr G's vulnerabilities into account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website