Upheld: Service failures generally complaint against Zilch Technology Limited

Decision detail

Summary

Mr M complained about Zilch Technology Limited's handling of a refund that left an outstanding balance of £0.56. Due to Zilch's technical issues, Mr M was unable to pay this balance despite multiple attempts, and his account was blocked for approximately one month. Zilch sent warnings that the outstanding balance could negatively impact Mr M's credit file. The ombudsman upheld the complaint, finding that the account restriction and credit file warnings were unfair given that the issues were caused by Zilch's systems, not Mr M's actions. The ombudsman ordered Zilch to pay £100 compensation to reflect the distress and inconvenience caused by the prolonged unresolved issue.

The Ombudsman's reasoning

The ombudsman upheld the complaint because the issues were caused by Zilch's systems rather than Mr M's actions. The account restriction was unreasonable given the cause was Zilch's technical failure, not Mr M's error. The credit file warnings were unfair in circumstances where Mr M could not pay due to Zilch's systems issues. The compensation of £100 was appropriate to reflect the distress and inconvenience caused by the prolonged issue and the concern about credit file impact, regardless of the small outstanding amount.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website