Upheld: Credit file / adverse marker disputes complaint against TSB Bank plc

Decision detail

Summary

Mr P complained about TSB's handling of a missed payment on his credit card that resulted from a failed direct debit in November 2025. Although Mr P had funds available and the payment was made within a fortnight, TSB recorded a missed payment marker on his credit file. TSB initially accepted Mr P was not at fault and agreed to remove the marker, but later reversed this decision, citing dormancy as the reason and offering only £50 compensation. The ombudsman upheld the complaint, finding that TSB's reversal of its initial pragmatic decision caused material distress to Mr P. The ombudsman ordered TSB to remove the late payment marker from Mr P's credit file and pay £350 compensation, rejecting Mr P's claims for additional compensation for balance transfer fees and potential future losses.

The Ombudsman's reasoning

The ombudsman determined that while the precise cause of the direct debit failure cannot be definitively proven, Mr P did not instruct its cancellation and it was not in his interests to do so. The failure was most likely due to dormancy or an account switch issue. Critically, TSB initially made a pragmatic decision to remove the marker, accepting Mr P was not at fault. This decision should have been implemented. TSB's subsequent reversal of this position, despite having accepted Mr P's lack of culpability, caused material distress and inconvenience. Under FCA DISP rules, the ombudsman determines complaints by reference to what is fair and reasonable in the circumstances, not solely on proof of bank error. Removal of the marker and compensation for the distress caused by TSB's reversal is fair and reasonable. The balance transfer fee, while unfortunate, was charged at market rates and Mr P chose to proceed with that product.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website