Partially upheld: Account administration errors complaint against NewDay Ltd trading as Debenhams

Decision detail

Summary

Mrs B complained that NewDay unfairly defaulted her credit card account without providing requested statements showing the outstanding balance, which she believed had been settled. NewDay terminated the account in December 2023 after Mrs B failed to make payments from August 2023 despite sending default notices. The account was passed to a debt collection agency which received only one payment over nearly a year before being returned to NewDay, which then defaulted and sold the account in February 2025. The ombudsman found the default was justified under ICO guidance as Mrs B was in sustained arrears, but the default date should be amended to December 2023 to accurately reflect when the account was terminated. The ombudsman awarded £100 compensation for service failures in not providing statements but declined to remove the default entirely.

The Ombudsman's reasoning

The ombudsman found that NewDay was entitled to default the account as Mrs B was in sustained arrears exceeding three months and approaching six months, in line with ICO guidance. However, the default date should reflect when the account was actually terminated (2 December 2023) rather than when it was formally recorded (February 2025), to accurately represent the payment history. While service failings occurred in not providing requested statements, these occurred after the default notice was issued, so the default itself was justified. Compensation of £100 was appropriate to recognise the service shortcomings, but removal of the default was not warranted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website