Partially upheld: Service failures generally complaint against ZILCH TECHNOLOGY LIMITED

Decision detail

Summary

Miss E complained that Z reduced her credit limit without warning in November 2025. Although Miss E had previously missed payments, she believed her account and credit limit would return to normal once she caught up. Z did not uphold the complaint, stating the reduction was in accordance with terms. The ombudsman found Z was entitled to reduce the credit limit based on financial stress indicators identified during a routine review, but failed to communicate this decision to Miss E clearly or timely. Miss E only discovered the reduction unexpectedly when logging into her account. The ombudsman rejected Miss E's argument that Z had assured her the credit limit would not be reviewed, finding this to be a general comment about account unblocking. The ombudsman awarded £200 compensation for the poor communication and resulting distress, particularly given Miss E's vulnerable personal circumstances at the time.

The Ombudsman's reasoning

While Z had the contractual right to reduce the credit limit without advance notice and the decision was based on reasonable risk management (financial stress indicators), Z failed to communicate the reduction clearly and timely to Miss E. The lack of notification meant Miss E discovered the change unexpectedly, causing unnecessary distress and anxiety. Although Z was not required to give reasons, some general explanation would have helped. The ombudsman rejected Miss E's argument that Z's statement about the account being 'up and running' constituted an assurance that the credit limit would not be reviewed, finding this to be a general comment about account unblocking rather than a guarantee about future credit limit decisions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website