Upheld: Credit file / adverse marker disputes complaint against Telefonica UK Limited trading as O2

Decision detail

Summary

Mr L complained about Telefonica's delay in closing a fixed sum loan after he returned a mobile device within the fourteen day cooling off period. Although Telefonica refunded his £550 upfront payment after six weeks, the loan account remained open for approximately three months, during which Mr L received collection letters and a debt collection agent became involved, despite Telefonica providing false reassurances that the loan was closed. The ombudsman found Telefonica treated Mr L unfairly by failing to close the account within a reasonable timeframe and upheld the complaint, requiring Telefonica to pay £200 compensation for distress and inconvenience. However, the ombudsman rejected Mr L's request to completely remove the loan from his credit file, as the loan is now properly recorded as 'repaid' and does not disadvantage him.

The Ombudsman's reasoning

The ombudsman found that Telefonica failed to close the loan account within a reasonable timeframe after Mr L returned the device within the cooling off period, despite both parties agreeing the loan should have closed. The delay of approximately three months, during which Mr L received letters about the balance and a debt collection agent became involved, was unreasonable. Telefonica's apology alone was insufficient given the distress caused by the contradiction between their reassurances and the reality of ongoing collection activity and adverse credit reporting. However, the ombudsman rejected the request to completely remove the loan from the credit file, as the fair position is that Mr L took out the borrowing and the loan is now properly recorded as 'repaid', which does not disadvantage him. The £200 compensation offered was deemed fair for the distress and inconvenience experienced.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website