Upheld: unfair credit file reporting and improper handling of write-off request complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr J complained that Tesco Bank required his credit card account to be defaulted before considering his write-off request, despite being up to date with payments and having disclosed medical issues. Other lenders had accepted similar requests without defaulting. Tesco eventually agreed to write-off the balance but maintained it should be recorded as a default on his credit file. The ombudsman upheld the complaint, finding that applying the ICO's PRAAD principles, the account should be closed and marked as partially settled without a default, as Mr J was current on payments and the write-off constituted final settlement. The ombudsman rejected Tesco's argument that vulnerability-based write-offs warrant different treatment, noting it would be unfair to withdraw the agreed write-off based on credit file recording.

The Ombudsman's reasoning

The ombudsman applied the ICO's PRAAD principles as good industry practice. Since Mr J was up to date with contractual repayments and Tesco agreed to write-off the balance as final settlement, the account should be closed and marked as partially settled rather than defaulted. A default marker would be inaccurate and disproportionate given Mr J's payment history. The ombudsman rejected Tesco's argument that different treatment applies to vulnerability-based write-offs, noting that once Tesco agreed to the write-off, it would be unfair to withdraw it based on credit file recording.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website