How to record a varied payment in a credit file

In FOS Case number 422745 FOS determined that when a financial services provider (FSP) and a borrower enter into a payment arrangement the FSP should update the repayment history information in the borrower’s credit file in relation to the loan so that they are not recorded as having missed the original contracted payments if the varied payment amount is paid.

The borrower entered into a payment arrangement with the FSP on 15 September 2015 after having defaulted in 2 previous months. This payment arrangement varied the Loan contract between the borrower and the FSP. The borrower complied with the payment arrangement and made each payment required under the payment arrangement. But the FSP recorded missed payments on the borrower’s credit file during that period.

The FSP reported the borrower’s repayment history based on compliance with the original loan contract. However, the loan contract had been varied by the agreement reached on 15 September 2015.

Account statements for the Loan show that the borrower made the fortnightly repayments of $690 in accordance with the payment arrangement on 23 September 2015, 7 October 2015, 21 October 2015 and 4 November 2015. That is, for the months of September and October 2015 all amounts due and payable under the varied Loan contract were paid.

FOS determined that the borrower met their contractual obligations to make all payments that were due and payable under the loan contract as varied. It was therefore inappropriate for the FSP to record the borrower as having missed payments in September and October 2015.

Information about a person’s repayment history is information about whether the person has met a contractual obligation to make a payment that is due and payable in a particular month. As the original monthly contractual payment was varied that was the amount that was ‘due and payable’.

Accordingly, the borrower’s repayment history information in relation to the loan was ordered to be updated so that they were not recorded as having missed payments in September or October 2015.

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