Vodafone Limited · DRN-6164548

The complaint Mr R complains about the information Vodafone Limited recorded on his credit file, when he ended a fixed sum loan agreement. What happened In January 2022, Mr R took out a fixed sum loan agreement with Vodafone to buy a brand new mobile telephone device. After making an upfront payment, Mr R was scheduled to make monthly repayments of £21 over a three year period. But, a few months after taking out the loan, Mr R’s personal bank account was closed and the Direct Debit instruction to make the repayments to Vodafone was cancelled. This meant Mr R’s loan entered into arrears and missed payment information was recorded on his credit file. To put things tight, Mr R spoke to Vodafone and arranged a repayment plan. However, the Direct Debit instruction failed for similar reasons as before. Consequently, Vodafone sent a termination letter to Mr R and asked him to make a payment to clear the balance of the loan. Mr R duly made that payment in August 2022, meaning he no longer owed Vodafone any money for the handset. But, Vodafone didn’t mark the loan as repaid within their internal records. Around three years later, Mr R says he noticed the missed payment information on his credit file. So, he called Vodafone to raise a complaint. He said the information recorded by Vodafone had likely impacted the cost of his mortgage borrowing, in that he wasn’t offered low rates by his lender. Vodafone didn’t respond straight away, and Mr R needed to frequently call them to ask what was happening. In their final response to Mr R’s complaint, Vodafone apologised for not marking the loan as repaid on their internal records. They said they had corrected their error and also agreed to remove the information about the missed payments, from Mr R’s credit file. Additionally, Vodafone offered to pay Mr R £225, for the delay in sorting things out. Mr R didn’t accept Vodafone’s offer and brought his complaint to us. He wanted Vodafone to increase their offer. One of our investigators looked into Mr R’s complaint and agreed that Vodafone had caused a delay in changing their internal records. But, she said the offer made by Vodafone was fair. Mr R didn’t agree with the investigator’s findings and said he was unable to leave Vodafone for a three year period because of their error. So, he asked the investigator to consider increasing the award. The investigator didn’t change her conclusions and Mr R’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

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in the circumstances of this complaint. This case is about a fixed sum loan agreement that Mr R took out with Vodafone. These types of agreements are regulated financial products. As such, we are able to consider complaints about them. I’ve considered what Mr R has said about the lump sum repayment of his fixed sum loan, as well as Vodafone’s records of the events that took place. Having done so, I can see where an attempt to claim a Direct Debit payment from Mr R’s bank account failed in March 2022. The records go on to show that this was because the Direct Debit instruction was cancelled by Mr R’s bankers. Vodafone have also provided evidence of where there were missed payments to Mr R’s loan in the months that followed. And where a repayment plan was arranged by Vodafone for Mr R to repay the arrears. However, I can see where that repayment plan failed in May 2022, for largely the same reasons as a few months previously. The arrears position of the loan was rectified in August 2022, when Mr R repaid around £700 to close the loan. So, on the face of it, the missed payment information recorded with credit reference agencies appears to be an accurate reflection of what happened. But, it remains that Vodafone should have updated their own internal records, that Mr R had satisfied the balance of the fixed sum loan agreement. Meaning that he was able to apply for another loan with Vodafone, or move to another provider as and when he wanted to. Vodafone’s records show they didn’t complete this internal update. Consequently, I think it follows that Vodafone made an error, when Mr R cleared the balance of the loan in 2022. So, I’ve gone on to think about what they have done to put this right. Mr R made contact with Vodafone to raise his concerns about his eligibility for an upgraded device in January 2025. Again, I can see from Vodafone’s records where they acknowledged they had made a mistake with their internal records, some two and a half years previously. And to put things right Vodafone removed the missed payment information from Mr R’s credit file. While welcomed by Mr R, the removal of this external information, didn’t solve the issue of Vodafone’s internal records of Mr R’s loan. With further prompting from Mr R, Vodafone eventually corrected their system to show that the loan had been repaid. Vodafone also apologised for the worry their error had caused to Mr R. Taking everything into consideration, I think the correction of Vodafone’s internal records and the apology were fair steps for Vodafone to take to put things right. But, Mr R says the missed payment information caused him to take out mortgage borrowing that proved to me more expensive than he could have ordinarily expected. Mr R hasn’t provided any evidence to support what he says here. And in any case, I’ve found that the missed payment information was likely correct, given the issues with Mr R’s bankers and the cancellation of the Direct Debit. So, I don’t think it would be fair to hold Vodafone responsible for the cost of the borrowing Mr R was given by other lenders. That said, I agree with Mr R, in that the inaccuracy of Vodafone’s records is likely to have had some impact on the worry Mr R has told us about. Overall, I agree that it must have been upsetting for Mr R to have discovered that the internal records kept by Vodafone have potentially stopped him from taking out a further contract with them. I also accept that Mr R was put to some inconvenience when he needed to explain himself several times to Vodafone before they put things right.

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Having thought about all the evidence, I don’t think Vodafone treated Mr R fairly when they retained incorrect information in error. I think Mr R has experienced distress and inconvenience during that time. So, I agree with the investigator that it’s fair for Vodafone to make a payment to Mr R in recognition of the worry they caused. I’ve considered the reasons why Mr R would like Vodafone to pay more than they’ve already offered. But, I also need to keep in mind where the external status of the fixed sum loan agreement was correct. And where Vodafone have removed the missed payment information, despite it being accurate. In all the circumstances I think the payment of £225 offered by Vodafone is a fair reflection of the distress and inconvenience Mr R experienced. Putting things right For these reasons, Vodafone Limited should: • Pay Mr R £225 for the distress and inconvenience caused. My final decision My final decision is that I uphold this complaint and require Vodafone Limited to put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 24 April 2026. Sam Wedderburn Ombudsman

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