Partially upheld: Irresponsible lending complaint against Capital One (Europe) plc

Decision detail

Summary

Mr M complained to the Financial Ombudsman Service about Capital One's management of his credit card account, specifically regarding their failure to properly implement a Breathing Space arrangement he requested in May 2025, which resulted in continued payments and overdraft charges. Capital One acknowledged the error, refunded interest charged after 10 May 2025, and offered £75 compensation, which an investigator suggested should be increased to £275. Mr M rejected this, arguing for a full review of persistent debt interest charges, increased compensation, removal of the default from his credit file, and complete disclosure of his personal data. The ombudsman upheld the complaint in relation to the Breathing Space failure and confirmed that £275 total compensation was appropriate, but rejected Mr M's other complaints, finding that Capital One's subsequent actions (arrears letters, Default Notice, persistent debt interest charges) were reasonable and that Mr M had not previously disclosed his financial difficulties to Capital One.

The Ombudsman's reasoning

The ombudsman found that Capital One should have implemented the Breathing Space arrangement properly and cancelled the direct debit as promised on 10 May 2025. However, the ombudsman determined that £275 total compensation (£75 already paid plus £200 additional) was fair because: (1) Capital One had already refunded interest charged after 10 May 2025; (2) Mr M was on notice that the direct debit would not be cancelled; (3) Mr M did not contact Capital One for over three months, suggesting limited immediate impact; and (4) while Capital One's errors may have exacerbated Mr M's medical conditions, they cannot be held solely responsible. The ombudsman rejected complaints about arrears letters and the Default Notice as reasonable actions to maintain accurate credit records, rejected the persistent debt interest complaint because Capital One complied with FCA regulations and Mr M had not previously disclosed difficulties, and rejected the SAR complaint because Capital One sent it to the registered email address which was reasonable, and the delay had no impact since Mr M could not access that email anyway.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website