Telefonica UK Limited · DRN-6181644

The complaint Mr P complains about the ending of a fixed sum loan agreement he had taken out with Telefonica UK Limited trading as O2. What happened In November 2024, Mr P took out a fixed sum loan agreement with Telefonica to pay for a brand new mobile telephone device. Under the agreement, Mr P was scheduled to make monthly payments of around £2 over a three year period. Shortly after getting the handset, Mr P decided to cancel the agreement and hand back the device to Telefonica. And in the following days, Mr P left Telefonica’s network and took up a different provider’s services. At this point, Telefonica hadn’t received the handset from Mr P, so couldn’t close the loan. This meant the full remaining balance of the loan became due. However, once Telefonica had received the handset, they didn’t go on to clear the balance of the borrowing. Instead, the arrears remained and were reported on Mr P’s credit file. Several months later, Mr P says he had trouble securing credit. So, he says he checked his credit score and discovered Telefonica’s error. Consequently, Mr P complained to Telefonica and asked them to remove the missed payment information from his credit file. In their response to Mr P’s complaint, Telefonica accepted they had made a mistake. They agreed to remove the missed payment information. They also offered to pay Mr P £300 for the distress and inconvenience he had experienced. Mr P didn’t accept Telefonica’s response and said he wanted compensating for them causing him to be offered more costly borrowing. Telefonica didn’t agree, so Mr P brought his case to this service. One of our investigators looked into Mr P’s complaint and agreed that Telefonica hadn’t treated Mr P fairly. But, after looking at Mr P’s credit file, He said he couldn’t hold Telefonica responsible for the terms of borrowing Mr P was given by other lenders. So, he said Telefonica’s offer to pay Mr P was fair and reasonable for the worry they had caused. Mr P didn’t agree with the investigator’s findings. He said Telefonica should increase the award. He also doubted that Telefonica had made the required changes to his credit file. The investigator didn’t change his conclusions and Mr P’s complaint has now been passed to me to make a final decision. 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. This case is about a fixed sum loan agreement which Mr P took out with Telefonica. These types of loans are regulated financial products, so we are able to consider complaints about them.

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During our review, Mr P asked another dispute resolution scheme to take a look at his concerns. Having looked at the outcome from that scheme, I can see they are related to the airtime services provided to Mr P by Telefonica. I can also see where the other scheme were careful to stress to Mr P, that they could not consider the loan he took out to buy the handset. Overall, I don’t think the other scheme’s findings impact our ability to make a decision on Mr P’s case. It’s clear from the evidence from both parties that the ending of the fixed sum loan agreement caused concerns for Mr P. All sides to this dispute agree that Telefonica made a mistake, in not ending the loan agreement when they ought to have in November 2024. The error led to adverse information being recorded with credit reference agencies, and I agree it’s for Telefonica to put this right. So, I’ve thought about the steps taken by Telefonica. Following Mr P’s contact with Telefonica in 2025, I can see where they eventually recognised their error and arranged for the adverse information to be removed from Mr P’s credit file. Telefonica’s records and Mr P’s credit file notes show they did this in September 2025. So, I think the action taken by Telefonica here is fair and reasonable in light of the circumstances. More recently, Mr P has raised further concerns that Telefonica haven’t followed through with their promise and have reactivated his account. From looking at all the evidence, I don’t think it’s clear that Telefonica have reneged on their promise. Indeed, I can see from their recent correspondence with us, that they have removed the adverse information and closed the account Mr P had with them. In any event, I encourage Telefonica to continue to help Mr P, should he spot a discrepancy in the future. Should the adverse information reappear, it may mean that Mr P will have cause to raise a new complaint. But, in view of the evidence I’ve seen, I don’t require Telefonica to take further steps with the action they say they have carried out, in correcting the information recorded credit reference agencies. I acknowledge where Mr P says he was offered and took out borrowing that has cost him more than he expected. And I accept that adverse information recorded by a party like Telefonica may impact the cost of the deals he had access to. But, having looked at the entirety of Mr P’s credit file, I don’t think it was Telefonica’s error alone, that resulted in the cost of borrowing he encountered. I say this as I’ve seen where there is similar information from other lenders on Mr P’s credit file, which is likely to have had an equal impact. In other words, there are too many other variables involved with Mr P’s credit file, for me to fairly say Telefonica caused the wider concerns Mr P experienced. I’d like Mr P to know that I’ve read and understood where he has described the impact of the events over last couple of years. I agree that an unresolved error with Telefonica is likely to have caused worry and had an impact on his overall health. It must have been very difficult for Mr P and I hope things get better for him. But, after considering all the evidence I don’t think it would be fair to ask Telefonica to compensate him for all the costs and upset he has described. That said, I do think the delay caused by Telefonica added to the worry that Mr P has told us about. He’s explained to us about some difficult personal circumstances he faced at the time and where Telefonica didn’t engage with him about the adverse information on his credit file. I acknowledge that Telefonica are willing to make a payment to Mr P, in recognition of the

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trouble and upset the delay has caused to him. I’m aware that Mr P would like Telefonica to increase that award. But, in all the circumstances, I think Telefonica’s offer to pay Mr P £300 for the distress and inconvenience fairly reflects the trouble he has experienced. Putting things right For these reasons, I require Telefonica UK Limited trading as O2 to: • Pay Mr P £300 for the distress and inconvenience caused. My final decision My final decision is that I uphold this complaint and require Telefonica UK Limited trading as O2 to put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 23 April 2026. Sam Wedderburn Ombudsman

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