DRN-6322514

The complaint Mrs F is unhappy with how Zilch Technology Limited (‘Zilch’) handled her request for repayments to de delayed on her account. What happened The background to this complaint and my initial conclusions were set out in my provisional decision. I said: “On 8 September 2025, Mrs F contacted Zilch to say she was struggling to afford her next few payments due to an unforeseen bill. Zilch initially said Mrs F could ‘snooze’ payments or arrange a repayment plan. Mrs F said she was unable to pay the £3 snooze fee and asked to speak to a customer support agent. Mrs F said she only needed the payments delayed until the end of the month. Zilch said as a gesture of goodwill the new due date for all payments would be 30 September 2025. On 16 October 2025, Mrs F again contacted Zilch to say she was struggling to make her payments due to an unexpected bill. She asked if her payments that were due could be moved until 27 October 2025. Zilch acknowledged this the next day and said it has two options available to help Mrs F repay her outstanding balance that stood at £893.78. One option was to pause payments for up to 30 days. The second was for a new payment plan to be created. Zilch said that as part of a repayment plan or payment delay, the account will be reported to credit reference agencies as being in an arrangement. Zilch added that Mrs F wouldn’t be able to use her Zilch again for new purchases until the full balance is cleared and a review of the account has taken place. Mrs F said she didn’t need the full £893.78 she owed to be delayed, just the payments that were due between 17 October and 26 October 2025. Zilch acknowledged this and asked Mrs F to let it know what option she required. Mrs F asked if choosing a payment plan as opposed to delaying payments and paying them all on 27 October 2025 would impact her Zilch credit limit. Zilch repeated that as part of both, the account will be reported to credit reference agencies as being in an arrangement. Zilch again said Mrs F wouldn’t be able to use her account for new purchases until the full balance is repaid and the account reviewed. Zilch added that after that account is re-evaluated for reuse and its activated, the credit limit may go down. On 18 October 2025, Mrs F said she wanted to delay the four payments that are due and pay these all on 27 October 2025. She made it clear it was just these four repayments she needed delaying. Later the same day Mrs F confirmed she wanted the pause option. Mrs F didn’t hear back from Zilch and so on 20 October 2025 messaged again to say she had now missed a payment. Zich responded immediately after to confirm the pause and advised payments would restart on 20 November 2025. Mrs F asked why the payments had been moved to 20 November 2025 when she had asked for the delay to be until 27 October 2025. Zilch said this was down to a system issue and confirmed it had amended the dates so that payments would now restart on 27 October 2025 as Mrs F had requested. Mrs F said she was annoyed her Zilch card had been frozen and all she wanted was to defer a couple of payments and everything else stay as it was. Like had occurred in September

-- 1 of 5 --

2025. She said her account now had a missed payment due to Zilch not responding. Zilch said once the full balance had been repaid it would re-evaluate the account for reuse. Unhappy with this Mrs F asked for a complaint to be logged. Zilch issued its final response on 22 October 2025. In this Zilch said Mrs F was given the available options after she made it aware she was struggling to make the repayments that were due on her account. Mrs F selected the option to pause payments and as was advised, the results of this would be the account being recorded as being in an arrangement. And that the account couldn’t be used to make new purchases until the balance is fully settled and the account reviewed afterwards. Zilch apologised for the delay in responding to Mrs F’s request to select the pause option. But said until this is agreed, its systems will continue to try and collect payments for the instalments due on the scheduled dates. Unhappy with this, Mrs F referred her complaint to the Financial Ombudsman Service. One of our investigators considered the complaint and said Zilch hadn’t acted fairly. They said Zilch hadn’t been clear in explaining the options available and so hadn’t effectively supported Mrs F. The investigator said the options put forward by Zilch didn’t really meet the specific need Mrs F had, as both options would result in restrictions being placed on her account. So, the investigator said the best option would’ve been for Mrs F to miss the payments due between 17 and 26 October 2025. This would’ve resulted in missed/late payments being recorded, but the account would’ve continued to run as normal, and Mrs F could’ve begun to make her payments as normal at the end of the month like she had requested. So, to put things right the investigator said Zilch should reinstate the account allowing Mrs F to use it like she was able to prior to this issue. Either reinstate the instalment plan or set up a payment plan that wouldn’t be recorded to Mrs F’s credit file. Remove the current arrangement markers and replace this with missed payments for those repayments due between 17 and 26 October 2025 only. And lastly pay £100 compensation for the distress and inconvenience caused. Zilch didn’t agree. It said had the payment pause not been applied, then Mrs F’s account would’ve been in arrears and the account would’ve needed to be repaid in full and reviewed before allowing use again. Which was the same result as what happened. The difference being her credit file was less negatively impacted, as it was reported as being in an arrangement rather than missed payments. Zilch also said it was clear with what would happen if a payment pause was put into place As Zilch didn’t agree, the complaint has been passed to me to decide. What I’ve provisionally decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of the complaint. I would like to point out I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point, it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach what I think is the right outcome. It’s not disputed here that Mrs F contacted Zilch both in September and October 2025 to advise she was struggling financially to make the payments due on her account. In September 2025, Zilch agreed to move the due date for all Mrs F repayments until the end of the month. It seems Zilch did so because of Mrs F’s previous repayment history, and that her reason for asking for assistance was because of a bill that had come in that she wasn’t expecting. However, just because this option was offered in September 2025, I don’t believe it was something Zilch was obliged to offer again. It was made clear this was being offered as a gesture of goodwill only.

-- 2 of 5 --

So, when Mrs F asked for further assistance in October 2025, again due to an unexpected bill, it was fair for Zilch to explain the more formal options that were available. These being either a payment pause or the creation of a payment plan. It’s worth noting this was the second consecutive month Mrs F had made Zilch aware she was having issues making her repayments. As per the terms of the account, Mrs F needed to make the repayments on the due dates. Zilch had previously explained the snooze option, and I’m satisfied Mrs F was aware of this given her communication with Zilch both in September and October 2025. Here just making the repayments that were due clearly wasn’t an option. And it seems Mrs F didn’t want to use the snooze option (or was unable to, but not because of anything Zilch had done). Mrs F therefore needed to agree to one of the two options Zilch explained or completely miss the payments. Ultimately what Mrs F wanted in October 2025, which was to just move four repayments due to the end of the month, wasn’t something Zilch offered or had to offer. So, Mrs F was always going to have some kind of restriction placed on her account, given she couldn’t pay the contractually agreed instalments that were due. Having reviewed the online chats between Mrs F and Zilch, I’m satisfied the options were correctly explained and that agreeing to one of them would result in the account being unable to be used for new purchases. Zilch said either option would be recorded as an arrangement. An arrangement carries a less negative impact to a credit file than missed payments would. I appreciate there has been some confusion after the options were explained. Mrs F repeated that she only needed the payments due between 17 and 26 October 2025 paused. She believed choosing the pause option would ensure this happened. I’m satisfied it did achieve this for Mrs F. But it also meant all other payments would be paused with the account unable to be used for new purchases, until the full balance was repaid and the situation re-evaluated afterwards. I know Mrs F doesn’t agree, but I think that was made sufficiently clear to her. On several occasions Zilch explained the full repercussions of agreeing to one of the options that it had made available. Even if I were to say Zilch didn’t make things clear, I would still need to look at what Mrs F would’ve done differently. As I’ve said, Mrs F wasn’t able to make the payments that were due, nor use the snooze option. And Zilch didn’t have to offer the same gesture of goodwill that it had previously put in place which is really what Mrs F wanted. So, if Mrs F didn’t agree to one of the forbearance options Zilch offered, I find it most likely Mrs F would’ve missed her payments. This would’ve resulted in her credit file being more negatively impacted and as Zilch has said, her account going into arrears would’ve meant the same restrictions being applied in any event. So, this likely would’ve resulted in her being in a worse position. So, it follows that I don’t agree Zilch needs to do anything more in this regard. As Zilch explained, the pause can be up to 30 days. This means it doesn’t have to be for the full 30 days but just can’t be longer than that. Here Zilch did initially set the pause until 20 November 2025. Which was clearly not what Mrs F wanted. She made it clear any pause was only required until 27 October 2025. I appreciate this was updated swiftly by Zilch and it apologised, but I do believe the initial error has caused confusion. For the distress and inconvenience this caused, I believe Zilch should pay Mrs F £50. I also feel Zilch should remove any potential missed payments it recorded onto Mrs F’s credit file. This would be for the time frame between when Mrs F made Zilch aware she wanted to go with the pause option on 18 October 2025, and when this put into place on 20 October 2025. I appreciate this was only a small delay and was over a weekend. But Mrs F had

-- 3 of 5 --

accepted the pause option and so showing the account as being in an arrangement from that date would be fair and reasonable. Moving forward I would like to remind Zilch of its obligation to treat Mrs F with forbearance and due consideration in relation to the outstanding amount that remains owed.” I invited both parties to respond with new information they wanted me to consider before I made my final decision. Mrs F didn’t agree. She said it wasn’t her fault the account got into arrears to the degree that the full balance became owed. Mrs F added that it was due to Zilch’s error that she became unable to pay, which wouldn’t have been the case had the matter been sorted in the way she thought she was agreeing to. Zilch also disagreed. It said the provisional decision explains compensation should be paid for the incorrect date for the payment pause. Zilch said this didn’t impact the outcome for Mrs F’s account. In addition, Zilch said it wouldn’t report for a period of two days. 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. I understand why Mrs F is disappointed. But I do believe Zilch’s communication was clear in what was being offered and the impact this would have. This was all explained before Mrs F agreed to the payment pause. So, I think he position she has ultimately ended up in is the correct one. Zilch has said it doesn’t agree with the compensation as it didn’t impact the outcome. While that may be the case, it was clearly not what Miss F had asked for. So, I can see why she would’ve found it distressing when she was told the end date wasn’t what she had requested. This meant she had to go back to Zilch to seek unnecessary clarification. Therefore, I still believe the £50 I’ve recommended to be fair in the circumstances of this complaint. Zilch has also advised it wouldn’t report for a period of two days. To clarify my recommendation, I feel that if Zilch recorded a missed payment between 18 and 20 October 2025, then it should be removed and replaced with an arrangement marker. I say this because Mrs F advised she had missed a payment due to the payment pause not being set up. So, a missed payment wouldn’t be fair as one wouldn’t have been recorded had the payment pause been set up earlier. Putting things right • Pay Mrs F £50 for the distress and inconvenience this matter has caused. • If Zilch recorded any of Mrs F’s plans as having missed payments between 18 and 20 October 2025, then those should be removed and replaced with an arrangement marker. My final decision I partially uphold Mrs F’s complaint and require Zilch Technology Limited to put things right for her as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs F to accept or reject my decision before 26 May 2026. Paul Blower Ombudsman

-- 4 of 5 --

-- 5 of 5 --