Not upheld: default removal; credit file reporting complaint against The Co-operative Bank P.L.C.

Decision detail

Summary

Ms D held a current account with an arranged overdraft at The Co-op. After exceeding her overdraft limit in August 2023 and failing to make payments, The Co-op withdrew the facility and issued a default notice in October 2023. The account was defaulted in November 2023 after no payment was made by the deadline. In November 2025, Ms D complained and requested removal of the default, citing difficult circumstances from 2022-2023. The Co-op declined, stating it was unaware of her circumstances at the time. The ombudsman found The Co-op had complied with ICO guidance and was reasonable in both defaulting the account and declining to remove the default, as lenders must report accurate payment history regardless of circumstance.

The Ombudsman's reasoning

The ombudsman applied ICO guidance which permits default registration when a consumer is at least three months in arrears and expects it by six months. Ms D was in sustained arrears from July 2023 with no payments made, and the default was issued in October 2023 (three months later) with a deadline of 9 November 2023. As no payment was made by this deadline, The Co-op complied with ICO guidance and was reasonable in defaulting the account. Regarding the request to remove the default after the fact, The Co-op was entitled to decline as it was not aware of Ms D's circumstances at the time and the default was correctly processed. Lenders are required to report accurate payment history to credit reference agencies regardless of circumstance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website