Paypal (Europe) S.a.r.l. et Cie, S.C.A · DRN-6240266

The complaint Mr C complains that Paypal (Europe) S.a.r.l. et Cie, S.C.A (“PayPal”) reported missed payments to the Credit Reference Agencies (CRAs), in relation to a credit account he has with it. What happened Mr C got into financial difficulties and as a result, his PayPal credit account was passed to a third-party debt collection agency (DCA). Mr C says he came to a payment arrangement with the DCA, but despite keeping up with repayments in line with the plan, PayPal reported that he’d missed payments. Mr C says this has caused long-term damage to his credit file and has resulted in him having to pay higher interest rates on his other credit facilities. PayPal responded to Mr C’s complaint, but ultimately, it felt it was reporting accurate information to the CRAs– and it explained why. I previously issued a decision setting out what parts of this complaint this service can and can’t consider. I explained to both Mr C and PayPal, that this service can only consider Mr C’s complaint about the events that took place after January 2021. An Investigator considered the merits of Mr C’s complaint, and they felt it should be upheld. That’s because despite Mr C being in a payment arrangement, PayPal hadn’t reported to the CRAs that he was in an arrangement and instead, just reported missed payments each month. Because of this, the Investigator felt that PayPal should update its reporting to show that Mr C was in a payment arrangement. And it should pay him £150. PayPal agreed to put things right in the way the Investigator suggested. But Mr C didn’t feel the compensation the Investigator awarded was enough. He said that PayPal’s inaccurate reporting has had a lasting impact on him; and it appeared to other lenders that he wasn’t managing his finances appropriately. He’s said the result of all of this is that he could only take out other lending with very high rates of interest. Because an agreement couldn’t be reached, the complaint has been passed to me to decide on the matter. 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 considered all of the evidence available, I’ve decided to uphold Mr C’s complaint. Before I do that, I want to make it clear that I have 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 fair and reasonable outcome is. This also means I

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don’t think it’s necessary to get an answer, or provide my own answer, to every question raised unless I think it’s relevant to the crux of the complaint. PayPal is required to report fair and accurate information to the CRAs. The guidance I have considered when deciding this case is set out by the Information Commissioner’s Office (see ICO publication ‘Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies’ (Version 2a Published July 2016 (updated to refer to GDPR and DPA 2018)). Ultimately, this guidance explains how accounts in arrears should be reported – this includes where repayments have been missed, repayments are less than the contractual amount due and where a customer is in an arrangement as is the case here. I’ve considered this guidance to be particularly important in deciding this case. Where an arrangement to pay has been agreed between the parties, this should be recorded as such with the CRAs. In this case, Mr C came to an arrangement with the DCA that he would pay £5 per month. PayPal were still responsible for reporting accurate information to the CRAs even while his account was being managed by the DCA. So here, PayPal should have reported that Mr C was in an arrangement while he was making reduced repayments, which I can’t see that it did. Therefore, PayPal should have reported that Mr C was in an arrangement to pay, and so it should update its reporting to reflect this. In addition to what I’ve said here, the guidance I’ve referred to states that even while in an arrangement, arrears can still be reported. So, where repayments are being made that are less than the contractual amount due, these should be reported by PayPal to the CRAs. So, in this case, PayPal are correct to report the account as being in arrears where Mr C has made repayments for less than the monthly amount due. Some CRAs record these as ‘missed payments’, which can understandably be confusing especially where repayments have been made. But PayPal don’t have any control over how the CRA presents the recording of arrears. And here I’m satisfied it was correct of PayPal to report arrears where Mr C didn’t make repayments in line with the contractual amount due. So while Mr C was making reduced repayments, it is correct of it to have reported the continuation of arrears, but it should have marked the account as in an arrangement. PayPal has agreed to pay Mr C £150 for the distress and inconvenience caused by the error in its reporting. I think this is fair and reasonable in the circumstances and I’m not persuaded that further compensation is warranted here. I say this because while PayPal should have recorded that Mr C was in an arrangement, recording as such would still show that Mr C wasn’t able to manage repayments at the contractual amount, which would also likely be viewed negatively by other prospective lenders. So I don’t think it’s likely the incorrect reporting has caused Mr C’s credit worthiness to be impacted in a way that’s significantly different compared to if PayPal had reported his account to the CRAs correctly. It’s also worth noting here that other prospective lenders would be able to see that Mr C is making monthly payments, it’s just that he wasn’t showing as in an arrangement. That being said, I agree that Mr C is likely to have been caused some level of distress by what’s happened; when considering this, alongside this service’s general approach to distress and inconvenience awards, I’m satisfied £150 is enough to put things right. Putting things right To put things right, PayPal should: • Pay Mr C £150 if it hasn’t done so already. And; • Apply a marker to Mr C’s credit file to show that he was in an “arrangement” from

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January 2021, until the account was settled. My final decision For the reasons set out above, I uphold Mr C’s complaint. PayPal (Europe) S.a r.l et Cie, S.C.A should put things right for Mr C by doing what I’ve said above (if it hasn’t already done so). Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 17 April 2026. Sophie Wilkinson Ombudsman

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