Black Horse Limited · DRN-6157060

The complaint Ms K is unhappy with how Black Horse Limited (‘BHL’) treated her when she got into financial difficulty in relation to a hire purchase agreement taken to acquire a used car. What happened Around January 2020 Ms K entered into a hire purchase agreement with BHL to acquire a used car. Ms K was due to make total monthly payments of £368.61 over 60 months. Unfortunately, Ms K later got into financial difficulty due to her employment. In February 2024, BHL sent Ms K default notices explaining she was in arrears of £790.80. The notices gave her until 10 March 2024 to repay the amount due. Ms K didn’t meet the terms of the default notices. A payment plan was then entered into in May 2024 for the arrears. Ms K fell behind with the plan, and she told BHL she was trying to sell the car. Further default notices were issued on 15 July 2024, giving until 4 August 2024 to clear the arrears of £2,243.60. The terms of the notices were not met. In August 2024 BHL agreed a further repayment plan having assessed Ms K’s income and expenditure (‘I and E’). But then Ms K missed a payment in September 2024. A default was then recorded with credit reference agencies in October 2024. Ms K spoke to BHL later in October 2024. It assessed Ms K’s I and E again but told her due to the remaining term it didn’t appear she could clear the outstanding balance. Ms K said she would make what payments she could. The term of the agreement ended on 18 January 2025. Ms K was £4,114.68 in arrears. BHL issued a notice of termination saying Ms K needed to return the car or it would seek repossession through the courts. Ms K spoke to BHL in March 2025 about another repayment plan, but it explained her only options were to pay the whole balance of the agreement or return the car. Ms K paid the outstanding balance on 6 June 2025. BHL updated her credit record to show the agreement as settled. Ms K was unhappy with what happened and complained to BHL, saying it hadn’t treated her fairly. Ms K said the default should be removed from her credit file. BHL issued a final response at the end of July 2025. This said, in summary, that it had fairly supported Ms K and the default had been recorded correctly. Ms K was unhappy with this and referred the complaint to our service. She said the default on her credit file was inaccurate, unfair and did not reflect that she was attempting to arrange payment plans with BHL. She said she wasn’t aware a default had been recorded. And she said the default should be removed and compensation paid. Our investigator issued a view and didn’t uphold the complaint. In summary, he said BHL

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had acted in line with the terms of the agreement. He said it had assessed Ms K’s ability to repay and agreed plans while it could. He said BHL had correctly issued default notices and recorded a default correctly. And he said it was reasonable for BHL to take steps to recover the car at the end of the term as Ms K was in significant arrears. Ms K was unhappy with this. She said she had met the terms of the default from July 2024, as she made a payment of £200 in August 2024. In any event, she also said by agreeing a payment plan after the notice was issued, BHL treated it as remedied. Our investigator explained this didn’t change his opinion. He said this was because Ms K needed to clear arrears by 4 August 2024, and payment had been sent on 6 August 2024. Ms K disagreed. She said, in summary, the payment was initiated on 4 August 2024 which was a Sunday, and the default notice said it needed to be “paid”, not “cleared by” by 6 August 2024. She said this showed she met the terms of the default notice. And she said this meant BHL didn’t act in line with relevant guidance when it recorded a default. Ms K also clarified that her complaint specifically related to the default recorded in October 2024. As Ms K remained unhappy, the complaint 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. Having done so, I do not think this complaint should be upheld. I’ll explain why. I should firstly explain to both parties that I might not comment on every piece of evidence or every single point raised. I want to reassure Ms K and BHL that I’ve carefully thought about all of the information. But I’m going to focus my decision on what I consider to be the key facts and the crux of the complaint. This reflects the informal nature of our service. Having looked at what Ms K said, and in particular having reviewed her response to the investigator’s opinion, I think it’s clear the crux of her complaint is whether the default was fairly added around October 2024 and if it should now be removed. So, this is what I’m going to focus my decision on. Before I come on to that point, for completeness I think it’s worth quickly commenting on what happened, in general terms, when Ms K unfortunately got into financial difficulty. BHL had various obligations of how it should’ve treated Ms K’s situation, including those set out by the Financial Conduct Authority (‘FCA’) in the consumer credit sourcebook (‘CONC’). In summary, I agree with what our investigator already explained to Ms K about this. Overall, BHL was speaking to Ms K about the arrears, assessing her ability to pay by reviewing her I and E, and it agreed repayment plans on several occasions. This is in line with what I’d expect to see, and I think it’s clear BHL were attempting to keep Ms K in the car and to resolve the situation. I appreciate BHL explained it couldn’t continue with repayment plans towards the end of the term, but it appears Ms K had no reasonable chance of clearing the arrears at this point. I also think it acted reasonably when it terminated the agreement and took steps to recover the car, given the level of arrears and that the term had ended. So, putting the default aside, I find BHL acted reasonably.

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I’ve then carefully thought about everything Ms K said about the default that was recorded. Ms K says she met the terms of the later default notice, as she made a payment of £200 towards the agreement. While she says she ‘initiated’ the payment on 4 August 2024, the bank account statement she provided showed she paid £200 on 7 August 2024. The default notice issued on 15 July 2024 said she needed to “pay” the amount “by 4th August 2024”. I’ve thought about this, but I don’t agree with Ms K’s argument that she met the terms of this default notice by ‘initiating’ a payment. However, even if I thought differently about this, there is a much bigger point to consider here. BHL issued two default notices on 15 July 2024, because of how the agreement was set up. One of these was in relation to additional products financed under the agreement and was for the arrears mentioned above of £152.08. But the other was in relation to the payments for the car. This said Ms K needed to pay £2,091.52 by 4 August 2024. This means Ms K would’ve had to have paid £2,243.60 to clear the arrears. Clearly a payment of £200 didn’t do this, regardless of when it was made. Ms K says she wasn’t aware a default was going to be recorded. But I can see BHL sent her default notices on two occasions explaining this would be the case if the arrears weren’t cleared. I’ve thought about when BHL added the default. As above, I’m satisfied default notices had been sent to Ms K and I’m satisfied she did not meet the requirements set out. The Information Commissioner’s Office (‘ICO’) sets out guidance for firms in the Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies. This says: “Generally, by the time the account is at least three months in arrears the lender may be taking further action such as reporting the account as defaulted” And, in relation to recording a default: “As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are 6 months in arrears.” I’m satisfied this was the case for Ms K’s account at the time. It follows I find it was reasonable to record a default when BHL did. Ms K says by BHL setting up a repayment plan after the default was issued meant it accepted she met the terms. I don’t necessarily agree on this point. But in any event, the ICO sets out in the guidance above: “If your lender agrees to give you a temporary arrangement, but you fail to make the agreed payment against the new terms, they may still file a default (see Principle 4 below) as soon as a payment is missed, as long you were (sic) at least 3 months in arrears on the original agreement.” So, either way this doesn’t change my opinion. I want to reassure Ms K again that I’ve carefully considered everything else she said about this. I know how frustrated she is that a default was added to her credit file. But I find BHL acted reasonably when it did this. And I don’t think it needs to take further action in relation to this complaint.

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My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms K to accept or reject my decision before 13 April 2026. John Bower Ombudsman

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