Vanquis Bank Limited · DRN-6172735

The complaint Mr N complains that Vanquis Bank Limited registered a default on his credit file. What happened In November 2024, Mr N contacted Vanquis to let it know that he was unable to meet the minimum payments on his credit card account. Vanquis agreed to a long-term payment plan for £5 a month, under it’s “Vanquis Assist” arrangement. In January 2025, Vanquis sent Mr N a Notice of Default (NOD), and a default was subsequently registered in February 2025. Mr N complained to Vanquis about the default in November 2025. He said he didn’t receive a NOD, so Vanquis shouldn’t have defaulted his account. Vanquis said the NOD was sent to him and the account was defaulted in line with its terms and conditions. Our Investigator reviewed matters and thought Vanquis had acted fairly when defaulting Mr N’s account. They were satisfied Vanquis had sent the NOD as required, and were persuaded this was received by Mr N. They also said Vanquis had informed Mr N that his account was at risk of defaulting, even if he maintained the reduced payments agreed under the Vanquis Assist arrangement. Mr N didn’t agree. In summary, he said he entered into a payment arrangement and maintained the agreed payments in good faith. He says it wasn’t made clear to him that his account would still be at risk of defaulting, and he didn’t receive a NOD or any clear warning a default was imminent. As no agreement has been reached, the matter has been passed to me to decide. 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. In considering what is fair and reasonable, I’ve taken into account the relevant industry rules and guidance, and what would be considered as good industry practice. Having done so, I’ve reached the same overall conclusions as the Investigator, for broadly the same reasons. I think it’s important to firstly explain I’ve read and taken into account all of the information provided by both parties, in reaching my decision. If I’ve not reflected something that’s been said it’s not because I didn’t see it, it’s because I didn’t deem it relevant to the crux of the complaint. This isn’t intended as a discourtesy to either party, but merely to reflect my informal role in deciding what a reasonable outcome is. Where evidence has been incomplete or contradictory, I’ve reached my view on the balance of probabilities – what I think is most likely to have happened given the available evidence and wider circumstances.

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I’ve listened to the call Mr N made to Vanquis in November 2024. During this call, Mr N informs Vanquis that he was unable to work due to medical reasons, so could only afford to pay £5 a month towards his credit card account. Vanquis went through an income and expenditure assessment with him, which found his outgoings to exceed his incomings. Vanquis asked where the £5 a month would be coming from, and Mr N said this would be gifted by a family member. Mr N was unable to say how long he was likely to remain in his current position but said it would likely exceed 10 months. Based on the information provided by Mr N about his financial circumstances Vanquis were unable to set up a payment arrangement, as his affordability didn’t allow him to make sufficient payments to clear the balance within a reasonable timeframe. However, it agreed to set up Vanquis Assist, which it says is a verbal agreement that isn’t reported as an arrangement to Credit Reference Agencies (CRAs), but is designed to assist customers in financial difficulty. It’s a long-term repayment plan that allowed Mr N to pay a token payment each month based on what he could afford. Interest and charges are permanently stopped, the credit card is frozen and the account is closed once the balance has been repaid. During the call, Vanquis explained the following to Mr N, which he acknowledged: “We have stopped collections activity requesting the arrears owed. You may still receive statutory communications that we are legally required to send such as Notice of Sums in arrears. Note that your statement will not refer to the reduced amount you’ve said you can afford, as it is not part of your contractual terms.” “Any payments required under your credit agreement which are not paid in full will be reported as missed payments on your credit file. If the arrears become sufficient, we may send you a Notice of Default and if the arrears quoted in the notice isn’t paid then we will register a default status on your credit file.” I’m therefore satisfied it was made clear to Mr N that the agreement for him to pay £5 wouldn’t change the contractual terms, and the account could default if the arrears continued to increase. Vanquis say this information was also reiterated to Mr N in writing following the call. I haven’t seen a copy of this letter, but Vanquis’ internal contact records do show a letter was sent to Mr N regarding the £5 a month payment agreement in November 2024. I’m therefore persuaded, on balance, that it’s more likely than not this included information about the agreement itself, and reflected the information provided over the phone. But even if it didn’t I’m still persuaded Vanquis explained this to Mr N in sufficient detail during the call, so it wouldn’t change my outcome here. It’s not in dispute that from November 2024, Mr N didn’t make the minimum monthly payments due to his account. While he did maintain the agreed £5 a month from December 2024, the terms of the account hadn’t changed, as I’ve explained above. Therefore, the account remained in arrears, and the arrears amount was increasing each month. This led to Vanquis sending Mr N a NOD on 24 January 2025. This gave him four weeks to make a payment to clear the arrears, before the account defaulted. Mr N didn’t satisfy the notice, so the default was recorded on 24 February 2025. Guidance from the Information Commissioner’s Office (ICO) sets out that a default may be recorded when the account is three months in arrears, and normally by the time the account is six months in arrears. In this case, Mr N’s account was in arrears for over three months

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before the default was registered. So, I don’t find Vanquis were unreasonable to default the account when it did. It’s also important to note that Mr N had made it clear to Vanquis that his circumstances were likely to continue long-term, and he was unable to say when he was going to be able to meet his contractual repayments or clear the arrears. So, a default was likely to be inevitable here and to delay this wouldn’t have been in Mr N’s best interest – as defaulting the account earlier means it will be removed from Mr N’s credit file sooner. Mr N says he didn’t receive the NOD, or any warning a default was imminent. However, I need to be persuaded Vanquis sent the notice, rather than whether Mr N received it. Vanquis’ internal contact records show a NOD letter was sent to Mr N on 24 January 2025, and a copy of the letter shows this was addressed correctly. So I’m persuaded it was sent. Additionally, Mr N called Vanquis on 1 February 2025, after the NOD was issued. Having listened to this call, I note Mr N says, “I received this letter saying Notice of Default.” So, in this instance I’m also satisfied the NOD was received. But even if Mr N didn’t receive it, as explained above, that wouldn’t mean I’d find Vanquis had acted unfairly. During the call, Mr N asked what he could do to prevent the default. Vanquis explained he would need to clear the arrears by the date on the default notice. However, it also explained that based on what he had informed it regarding his financial circumstances, it wouldn’t recommend he borrow money from elsewhere, incurring more debt, to pay this account. It advised him that the account will eventually default unless he makes his full minimum contractual payments on the account, which was known to be unaffordable for him. It said once the account balance was settled, the default would be reported as satisfied which would reflect more positively on his credit file. While I understand Mr N was keen to avoid a default, and mentioned borrowing money to do so, for the reasons I’ve explained above regarding the timing of the default application, and his individual circumstances, I’m satisfied this was fair and reasonable advice. Overall, I’m satisfied Vanquis acted fairly by defaulting Mr N’s account when it did. Mr N wasn’t in a financial position to maintain his monthly contractual payments, or clear the arrears within a reasonable timeframe, that would’ve prevented the account from defaulting. I’m satisfied Vanquis met its obligation to provide a NOD, and this was confirmed as received by Mr N before the default was registered. As such, I won’t be asking Vanquis to take any action here. My final decision For the reasons explained, I don’t uphold Mr N’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr N to accept or reject my decision before 24 April 2026. Nicola Bastin Ombudsman

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