Tesco Mobile Limited · DRN-6249425

The complaint Miss B is unhappy there is negative information being reported to her credit file because of how Tesco Mobile Limited have engaged with her about a credit agreement taken out to pay for a mobile phone device (‘the device’). What happened I issued my provisional decision to both parties explaining why I thought Miss B’s complaint should be upheld in part and invited both parties to provide any further evidence and / or submissions in reply. The background to this complaint was set out in my provisional decision together with my provisional findings which are copied below and now form part of this final decision. Background In 2023 Miss B obtained a mobile phone for her sister who, in October 2024, due to unexpected circumstances was no longer able to use the phone. The device was paid for using a credit agreement requiring 36 monthly payments of £23.99 to repay £863.64. In early November 2024 Miss B contacted Tesco and let them know her sister was temporarily not going to be able to use the phone. Following this Miss B says she had understood the account to be on hold given her sister was no longer using the device. But on 11 February 2025 she received notification that £491.81 would be taken on 24 February 2025. Miss B contacted Tesco on 11 February 2025. Miss B says at this point she understood it was not possible for her to make a payment to clear the debt and that she would need to wait for the debt collection agency (DCA) to contact her to arrange payment. On 16 April 2025 Miss B contacted Tesco after looking at her credit file and seeing negative reporting in relation to the Tesco credit account. Miss B said Tesco were preventing her from being able to make payment and she had been waiting to hear from the DCA. Miss B said it was unfair that in the meantime Tesco had been reporting the account negatively to the credit reference agencies (CRAs). Miss B raised a complaint about this, and also complained about the misinformation and inconsistencies in the information different Tesco staff had provided to her about the account at different times. Miss B submitted that clearer information about what she could pay to the account, when and how would have allowed her to prevent the negative reporting for March and April 2025 to her credit file. Miss B repaid the outstanding sum in full on 16 April 2025 while on the phone with Tesco. Tesco did not uphold Miss B’s complaint as they did not think they had done anything wrong and explained Miss B was liable for the debt and they had a responsibility to report accurate

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information to the CRAs. Our Investigator considered Miss B’s complaint and while they acknowledged Tesco had been unhelpful in some of their communications, they did not think Miss B had been affected in the way she had said. The Investigator therefore did not uphold Miss B’s complaint. Miss B strongly disagreed and maintained that Tesco’s failings in their communications with her and how she could repay the debt had impacted her credit file. Provisional findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. For the avoidance of doubt, my considerations here are limited to the credit agreement taken out by Miss B to pay for the device. I therefore make no comments in relation to the phone service contract. I have only included a summary of what has happened above and while I may not respond to every point each party has raised I have reviewed all the submissions and evidence available and focused on what I consider relevant to reaching a fair and reasonable resolution in this matter. To reach a fair and reasonable decision I have taken into account any relevant law and regulations, regulator’s rules, guidance and standards, codes of practice and (where appropriate) what is considered to have been good industry practice at the relevant time. I think it fair to say that at the heart of this matter are Miss B’s concerns that Tesco prevented her from being unable to make payments towards the outstanding debt and this in turn impacted her credit file. Tesco have a responsibility to report fair, accurate and up to date information to the CRAs, so I’ve first considered what is showing on Miss B’s credit file together with the statement of account showing the payments made to the account. Miss B has described the impact to her credit file as ‘defaults’ but, as our Investigator explained and having reviewed Miss B’s credit file information, Miss B’s credit file shows that four months of missed payments are being reported against the account. A default has therefore not been reported against the account. The credit file report shows these as missed payments from January 2025 until April 2025 when Miss B repaid the outstanding balance in full on 16 April 2025. Having reviewed the statement of account, payments were missed for the months of November 2024, January 2025, February 2025 and March 2025. So it appears that payment was made for December 2024. In view of this – setting aside for the moment Miss B’s concerns about being unable to make payments to the account – I think it reasonable to say what Tesco are currently reporting to the CRAs does not accurately reflect payments that were missed. I note that Miss B is seeking to remove the markers for March 2025 and April 2025. So I think it reasonable to say Miss B accepts responsibility for the missed payments prior to March 2025 given it is from 11 February 2025 that Miss B was attempting to sort out the outstanding balance on the account and says it was from this point that she was stopped

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from making payments. I would also note that Tesco have records to show communications were sent to Miss B in December 2024 and January 2025 to let her know about the arrears and disconnection of the phone service. In consideration of the above, I therefore think the missed payment marker for April 2025 should be removed given Miss B cleared the outstanding balance in April 2025. But it would be accurate for Tesco to report November 2024 as a missed payment as this would be a fair reflection of what had happened with the account payments. This leaves me to consider the question of whether it would be fair, given what Miss B has said happened, to remove the missed payment marker for March 2025. In short, having reviewed the available evidence and submissions, I do not think it would be fair in the circumstances as I’ll explain. A key part of Miss B’s position relates to what she was told on 11 February 2025. That is, Miss B says Tesco told her she could not make any payments to the account because it had been deactivated and passed to a debt collection agency (DCA). Miss B says she was told to therefore wait to hear from the DCA to arrange a payment plan as Tesco could not arrange such a plan. Miss B has said, in light of what she was later told on 16 April 2025, if she had known it was possible to clear the debt in full with Tesco she would have done that in February 2025. Miss B has attempted to obtain a copy of this call from Tesco, and I can see our Investigator also requested Tesco search for a call from 11 February 2025. Tesco have not provided a call from this day and I’ve not seen any record of a call on this day either. However, it is apparent Miss B did contact Tesco on 11 February 2025, but via the online chat service. It appears Miss B started the chat because she had learned that £491.81 was to be collected on 24 February 2025, and she did not have the money at that time to make the payment. Miss B asked about setting up a plan with Tesco. During the chat Tesco said the account had been cancelled due to non-payment in November 2024 and January 2025; Miss B could make small payments to the account and after some time the account would automatically pass to a debt collection agency who could set up a plan; Tesco could not arrange a plan because the account was no longer active; and Miss B was given phone numbers for Tesco’s care team and their payment plan team if she wanted to know more or needed support. I have carefully considered Miss B’s version of events from February 2025 and weighed these against the evidence and submissions available. It may help Miss B to understand that where the evidence is incomplete, inconclusive or contradictory, I reach my decision on the balance of probabilities – in other words it means I base it on what I consider is more likely than not to have happened given the available evidence and the wider circumstances. And in relation to what happened in February 2025, I’ve not seen enough to persuade me that Tesco told Miss B she could not make payments to the account and that she should wait for the DCA to contact her. I therefore don’t uphold this point. Tesco’s records are that Miss B next contacted them on 16 April 2025 and I will return to what happened on the two calls from that day later on. While it does not appear Miss B contacted Tesco again until 16 April 2025, I am mindful that an email dated 21 March 2025 was sent to Miss B. The email included details on how to

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either clear the full amount or, if preferred, that two separate payments could be made and where they would need to be made. And who to call if any queries. Miss B has both said the email went to her junk email, and that she did not place any weight on it due to relying on what she had been told in February 2025. I’ve considered what Miss B has said, but in either case I do not think it would be fair to say Tesco have done something wrong here given the email was sent to the correct email for Miss B and it set out how she could repay the debt. If Miss B was uncertain about the email I am mindful the email provided contact details for any queries. Taking all the above into account, I have therefore not found enough to say Miss B was being prevented from paying the debt – either in full or in part. Because of this I do not think it would be fair or accurate to remove the missed payment marker for March 2025. This brings me to what happened on the two calls on 16 April 2025. I have listened to both of these calls and having done so I think it’s fair to say the second call resolved the issue of the outstanding debt as Tesco confirmed they could – as Miss B was clearing the debt in full – take payment from her to settle the account. The Tesco advisor said Miss B’s account was due to be sold to a DCA in June 2025. However, the first call is particularly disappointing in that Miss B was not presented with the same option in the first call to clear the debt in full; that Tesco were unable to confirm what had happened to the debt and where Miss B should make payment and that Tesco told Miss B to call a third party (one of the CRAs) to find out which DCA had the debt as they said the debt had been passed to a DCA. This led Miss B to call the third-party number Tesco gave her only to learn they could not help her, and so she had to call Tesco back again. In their investigations our Investigator clarified with Tesco what had happened given the number of different dates being referenced in relation to when the account had been closed / cancelled, and when the account had been passed to a DCA. Tesco apologised for any confusion caused due to the nature of their processes. From what Tesco have said, it is my understanding that where an account has been closed / cancelled, the debt is passed to a debt collection management team, which can be a third-party DCA, to collect the debt on Tesco’s behalf. But Tesco will still own the debt. If, after a time, the debt is not collected, then Tesco sell the debt to a third-party. Tesco have said the account was passed to a DCA on 13 April 2025 who they say then tried to contact Miss B to set up an arrangement. However, I’ve not seen any clear evidence of this or that Miss B was told this. I have noted there is some suggestion in the submissions that the email sent to Miss B on 21 March 2025 may have been issued on Tesco’s behalf by the outsourced DCA attempting collection at that time - which I consider may have been why Tesco have referenced to this service that the account was with a DCA from 10 March 2025. I note the advisor on the second call on 16 April 2025 said the account would go to a DCA in June 2025, and so told Miss B the account (at that time) had not gone to a DCA. Taking the above into account, and in the absence of any other evidence, I can see how Miss B would have been confused by the information she was receiving during the two calls. And I note that Tesco have said that there would be some information that would not have been available to their advisors on their screens while they spoke to Miss B.

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I think it is reasonable to say Tesco’s communications and information they were giving to Miss B during these two calls in particular could have been clearer and more helpful to her. Having listened to the calls it is clear Miss B found the interactions stressful and she was put to the inconvenience of calling a third-party for information which I think Tesco reasonably ought to have been able to provide. To recognise this upset and inconvenience I am proposing Tesco pay Miss B £150. But for the reasons I have already explained, even if I accept Tesco’s communications with Miss B could have been better, I am mindful that in February 2025 Miss B was not prevented from making payments or told that the account was with a DCA and she should wait to hear from them, and that she was provided with numbers to call for information – which I’ve seen no evidence to support she called. I am also mindful that Miss B was in receipt of an email in March 2025 setting out payment options for her. Because of this I am not minded to say Tesco should remove the missed payment marker for March 2025. Putting things right I propose Tesco Mobile Limited should: • Pay Miss B £150. • Amend Miss B’s credit file to remove the missed payment marker for April 2025 and instead report a missed payment marker for November 2024. Responses to my provisional decision Neither Miss B nor Tesco Mobile Limited replied to my provisional decision with any further evidence or submissions for me to consider before the deadline set. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. As the deadline set out in my provisional decision has now passed and because neither Miss B nor Tesco have provided me with any further evidence or submissions to consider I see no reason to depart from the conclusions reached in my provisional decision. That is, for the reasons above even if Tesco’s communications with Miss B could have been better, Miss B was not prevented from being able to make payments or told that she should wait to hear from a DCA. And Miss B was provided with information on where to call for information and sent an email with payment options for her. But Tesco does need to report information accurately to the CRAs and so should update Miss B’s credit file to reflect that payment was missed for November 2024 rather than April 2025. Putting things right Tesco Mobile Limited should: • Pay Miss B £150. • Amend Miss B’s credit file to remove the missed payment marker for April 2025 and

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instead report a missed payment marker for November 2024. My final decision For the reasons above, my final decision is that Miss B’s complaint is upheld in part and Tesco Mobile Limited should put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss B to accept or reject my decision before 22 April 2026. Kristina Mathews Ombudsman

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