Upheld: Credit file / adverse marker disputes complaint against Vanquis Bank Limited

Decision detail

Summary

Mr C entered a Debt Relief Order in February 2022 with Vanquis Bank Limited. When the DRO ended in February 2023, Vanquis failed to update his credit file to reflect the discharge, continuing to report an outstanding balance for over two years. Mr C had to contact Vanquis to request the correction, which was subsequently made. The ombudsman found that Vanquis should have known the DRO had ended based on the statutory 12-month duration and the Insolvency Service guidance confirming it only notifies creditors of cancellations or extensions, not completions. The ombudsman upheld the complaint and awarded £150 compensation for the distress and inconvenience caused by the incorrect reporting.

The Ombudsman's reasoning

The ombudsman found that Vanquis had an obligation to update Mr C's credit file when the DRO ended in February 2023. The Insolvency Service guidance explicitly states that creditors are expected to take account of the statutory duration of the DRO and that the Service will not notify creditors when a DRO ends—only if it is cancelled or extended. Therefore, when Vanquis was not notified of cancellation or extension, it should have known the DRO had concluded and updated the credit file accordingly. The unnecessary delay in updating the credit file caused distress and inconvenience to Mr C over approximately two years. While the ombudsman acknowledged that the DRO itself would have had an adverse impact on Mr C's credit, the continued reporting of an outstanding balance after discharge was an error that warranted compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website