Telefonica UK Limited · DRN-6251305

The complaint Mr S complains Telefonica UK Limited trading as O2 gave him loan agreements to purchase devices which he couldn’t afford to pay. He also argues O2 treated him unfairly in relation to the device agreements when he came to cancel his connected airtime agreements and in relation to repayment plans. What happened Between April 2022 and June 2024 O2 agreed the following loan agreements to purchase devices: Item Start date Term Monthly repayment Total cost 1. Tablet 17/04/2022 48 £12.50 600.00 2. Tablet 07/11/2022 48 £7.97 382.50 3. Watch 15/01/2023 48 £9.84 472.00 4. Mobile phone 01/07/2023 36 £29.45 1059.99 5. Mobile phone 30/09/2023 36 £29 1043.88 6. Mobile phone 28/12/2023 36 £35.82 1289.66 7. Mobile phone 11/05/2024 36 £19.44 699.00 8. Mobile phone 01/06/2024 36 27.78 999.99 The tablet device agreement taken in November 2022 has since been repaid and Mr S has confirmed he is not complaining about this agreement. All other agreements have outstanding balances. On 15 November 2024 O2 wrote to its customers explaining that due to changes being made to the terms and conditions for airtime agreements, customers who weren’t happy with these changes could end their airtime agreements. The email explained that device agreements could continue to be repaid monthly, even if the airtime agreements were cancelled, providing notice was given to O2. And the email gave details for how to give notice. Mr S argues that he exercised his right to cancel his airtime agreements and was told that his device plans would continue to be paid through direct debit. However, upon cancelling his airtime agreements, Mr S received bills demanding full payment for his device plans. Mr S feels this contradicted his earlier agreement with O2. Mr S says he contacted O2 who agreed to set up repayment plans in February 2025 for the remaining balances. However,

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prior to this he’s said that some of his accounts were passed to a third-party debt recovery company and that this has had a devastating effect on his credit file. Finally, Mr S argues that all his outstanding agreements were irresponsibly lent. Mr S points to the number of concurrent agreements he was given and his history of missed payments on the accounts. He argues that this showed clear signs of financial strain and that O2 shouldn’t have continued to approve further device agreements. O2 considered his complaint but didn’t uphold it. It wrote several letters to Mr S explaining it had tried to contact him to discuss his complaint but was unable to do so. In one letter it said Mr S had a total balance outstanding of £2,648.20 and it said he could contact O2 to arrange payment. It also apologised for the inconvenience Mr S experienced when attempting to contact O2 support. In its final response letter O2 explained that Mr S had £3,131.28 outstanding across three accounts and he could contact it to arrange a repayment plan. Unhappy with O2’s response, Mr S referred his complaint to our service. One of our investigators considered the complaint and upheld it in part. They thought that when Mr S cancelled his airtime agreements, he didn’t follow the instructions outlined in the November 2024 email to allow him to continue paying his device agreements monthly. This was why they became immediately repayable and it was fair for O2 to report the non-payment to his credit file. However, the investigator did think that the last two device agreements were irresponsibly lent. The agreements were given on an interest free basis, so there were no additional costs to refund. Mr S also no longer had either device so he couldn’t return the devices and be released from the credit agreements. The investigator therefore awarded £100 compensation for the distress that being given these two agreements will have caused Mr S. In response O2 agreed with the investigator’s opinion. Mr S didn’t agree and asked for an ombudsman to consider the complaint. He again argued that he contacted O2 to arrange repayment plans for the device agreements. He also said he paid the first set of device payments on 1 March 2025 and O2 marked them on his credit file as an arrangement to pay which wasn’t fair given, he had a right to cancel his airtime agreements. As an agreement couldn’t be reached, the complaint has been passed to me to consider. I issued a provisional decision setting out why I intended to uphold this complaint in part. In my provisional decision I said: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ve read everything that the parties have said, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on a specific point it’s not because I’ve failed to consider it, but because I don’t think I need to comment in order to reach a fair and reasonable outcome. And our rules allow me to do this. This reflects the nature of our service as a free and informal alternative to the courts. In addition, where issues are in dispute and the matters are finely balanced, as they are in this case, I make my decision on the balance of probabilities. This means I must decide the complaint based on what I think is more likely to have occurred. The lending decisions Mr S has argued that the number of concurrent device agreements shouldn’t have been given. He’s said he was selling the devices to raise funds which he used towards problem

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gambling. We’ve explained how we handle complaints about unaffordable and irresponsible lending on our website. I have used this approach to help me decide Mr S’ complaint. O2 needed to make sure it lent responsibly to Mr S. It therefore needed to complete sufficient checks to determine if Mr S could afford to sustainably repay the lending. There is no set list of checks a lender should do, but there is guidance on the types of checks a lender could complete. However, these checks needed to be proportionate when considering things like the amount and term of the lending, what the lender already knew about the consumer, etc. O2 has said Mr S would have needed to declare he could afford to repay the lending during the application process. He would have also needed to declare his income from a dropdown list of options. O2 would then pass this to credit reference agencies and together with information on Mr S’ credit file, it would receive an answer on whether or not to lend. O2 is unable to provide any information about the income declared, if there was any income verification or what the results of the credit searches were. So, as O2 can’t provide evidence of the checks completed or the information provided, I can’t conclude that it completed proportionate checks. Our investigator considered the lending decisions made and thought that there was sufficient evidence to conclude that the two most recent mobile phone agreements (taken in May and June 2024) shouldn’t have been given. Having considered all the evidence I’ve been provided with, I agree with this conclusion. At the time of the May and June 2024 applications, the compound nature of the overlapping device agreements had taken Mr S’ monthly device repayments to over £160 per month. And the total amount owing to O2 across all the active device agreements was several thousand pounds. So, whilst in the early stages of borrowing, the repayment amounts and total borrowing was low, this had increased substantially by the May and June agreements. Looking at Mr S’ account and repayment history with O2, I can see that from January 2024 Mr S started having missed payments on his existing accounts. Mr S has also provided some evidence to show that he was heavily overindebted. The information he’s provided shows details of a large number of other credit commitments including high-cost credit. But it doesn’t show what the balances were. So, I don’t know how much was outstanding when the device agreements were given. However, I can see that Mr S appears to have been working with a debt charity from November 2024. So, it seems likely that his credit file, at least at the time of the two applications in question in May and June 2024, would have shown high levels of indebtedness. Taking all this into consideration, had proportionate checks been completed (which included O2 considering what it already knew about Mr S’ repayment history and number of active accounts) I think O2 would have most likely seen that it wasn’t reasonable to lend. So, I don’t think O2 should have agreed the last two device agreements in May and June 2024. Turning to the earlier agreements, I don’t think there is sufficient evidence to allow me to uphold his complaint with respect to these. It wasn’t until January 2024, that Mr S began to have repayment difficulties on existing accounts with O2. And so, this was after his sixth agreement was entered into in December 2023. As I’ve explained above, I don’t have sufficient evidence of his existing credit balances at the time the earlier agreements were entered into and the information I have suggests his financial circumstances began to really deteriorate in 2024. In addition, Mr S has confirmed he was employed and earning around £3,000 per month net in April 2022, which had increased to over £4,000 per month net by January 2023. So, it’s likely that his income declarations would have suggested he could have afforded these agreements. - Putting things right – May and June 2024 agreements

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Our typical approach to compensation in these circumstances is for the lender to refund any interest, fees and charges and for the credit to be interest free going forward. In this case the device agreements aren’t interest bearing so there would be no refund of sums paid. In addition, Mr S has said he no longer owns the devices. So, he can’t return them and end the credit agreements. I’m also mindful that he has had use of the devices (albeit to sell them) and so I’m not persuaded that it’s fair or reasonable to write off the debts in this case. I appreciate Mr S has highlighted another ombudsman’s decision where he says a debt write off was given. However, we consider each case individually on merits and Mr S has maintained throughout his complaint that he is able to make some meaningful repayments towards his outstanding balances. So, taking everything into consideration, I think it’s fair and reasonable that he does repay the principal balances outstanding. However, I do agree with the investigator that an additional compensation payment is also fair and reasonable in the circumstances. O2 has given Mr S two device agreements that I don’t think it should have, and at a time when Mr S already had 4-5 months’ worth of repayment problems on his existing accounts with it. I’m also mindful that these device agreements were Mr S’ fourth and fifth mobile phones within a one-year period. Both devices are also the exact models of mobile phones he had already taken. However, I can’t see O2 took any steps to explore this with Mr S to establish why he was taking out agreements for so many mobile phones within a relatively short period. So, I think there were signs of potential vulnerability that should have been explored but which O2 overlooked. Taking all this into consideration I think increasing his indebtedness and providing the two agreements in question was likely to have caused Mr S additional distress. And having had regard to our approach to compensation, I think O2 should pay an additional £300 to compensate Mr S for the distress this will have caused. I also think O2 should take steps to amend Mr S’ credit file and set up repayment plans for the outstanding balances in relation to these two agreements. I’ll set this out in more detail below in the fair compensation section. Events surrounding O2’s email of 15 November 2024 - The 15 November 2024 email As explained in the background section, this email gave customers the opportunity to exit their airtime agreements and continue paying for the device on a monthly basis. Mr S argues he exercised this right, requesting his device agreements continue on a monthly basis, however he says O2 failed to exercise this. The email explained: “If you decide to leave us, you can cancel your contract any time in the next 30 days [telephone contact details given] …. If there’s an outstanding amount left on your device plan, this will still need to be paid off, either by continuing with the instalments already set up, or you can opt to pay it off in full, a member of the team will be able to help you.” Beneath this in bold it says: “If you want the instalment plan to continue you must call us and ask an agent to continue the device payments monthly for you, if you decide to leave without calling and arranging this first, your device instalment plan will end, and you’ll need to pay it off in full.” Mr S has provided a copy of this email, so clearly he received this information. O2 has said Mr S ported out his numbers, triggering early termination fees. It has said that three accounts were affected by this – July 2023, December 2023 and May 2024 mobile phone agreements. My understanding of what happened at this time is that the full outstanding balance for these device agreements (together with the early termination fees)

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became payable and the monthly direct debits for these agreements were cancelled. O2 confirmed this took place because it didn’t receive notice that Mr S wanted to maintain his monthly repayments towards the device agreements, before cancelling his airtime agreements. In addition, O2 has said the remaining agreements weren’t affected by this process. It has said all other connected device agreements became payable in full because Mr S failed to continue making payments after October 2024. Mr S has said he called O2 and gave notice to end all his airtime agreements. Mr S says he was told that this couldn’t be actioned at that time and he needed to call back in December to arrange repayment plans for the device agreements. - Mr S’ contact notes I reviewed Mr S’ contact notes to see what records there were of contact which took place between Mr S and O2 during this period. I can see that on 15 November 2024 (which was the day the email was sent) Mr S called O2 “to process a right to exit and get a pac code for one number”. I think it’s logical that right to exit refers to his right to end the airtime agreements as per the email. And telephone contact is what was suggested in the 15 November 2024 email. On 23 November Mr S’ notes state that he was discussing his “RTE” which I take to mean his “right to exit”. However, this note isn’t clear to me about whether Mr S is discussing the same account as on 15 November 2024 or if this refers to another account. Looking at the contact notes, I can see Mr S did contact O2 in December 2024 to discuss the outstanding balances and set up repayment plans. I queried the November 2024 conversations with O2 and requested call recordings of these conversations. In response O2 hasn’t provided call recordings. However, O2 has said that at the time of the first call on 15 November 2024, the representative processed the right to exit for December. O2 has said Mr S went on to port his number in November 2024 which was before the right to exit had been actioned and as such, the applicable three device agreements became fully chargeable. - My thoughts In the absence of call recordings, I can’t definitively say what was discussed during the various times that Mr S contacted O2 in November and December 2024. There is also some dispute about which agreements Mr S gave notice on as part of the right to exit process. The notes are brief and lack detail, however they only seem to refer to a single agreement. O2 has said only three of the agreements were affected by this process and Mr S has said he gave notice to end all his airtime agreements. I’ve carefully considered everything that’s been said by both parties. Having done so, I’m more persuaded by Mr S’ testimony which I think is credible and supported by the surrounding facts and evidence. Mr S has said he called to give notice on all agreements in November 2024, and it’s clear a call has taken place on the day the email was sent. Mr S’ call notes at the time also support that the right to exit was discussed. Mr S has said that he was told he needed to call back in December 2024 to set up repayment plans for the device agreements. I can see that Mr S did call in December 2024 to set up repayment plans for the outstanding balances. And Mr S stopped paying all agreements in October 2024. So I think it’s most likely he did this as he was told in the November, when he called to give notice, that plans for the device agreements would be put in place in December and he should contact O2 then. I’ve noted O2’s subsequent argument, once it accepted that Mr S gave notice to end at least some of his airtime agreements, that although Mr S gave notice in November 2024 this was

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set to take place in December 2024. It said Mr S then ported his numbers early which triggered early termination fees and three of his devices became payable in full. O2 has also said that the reason his remaining agreements became payable in full, was because he stopped paying after October 2024. Firstly, I think if Mr S had been given clear information that he needed to wait until December to port his numbers, then he would have done so. I also note that this isn’t something which was detailed or explained on the November 2024 email. Mr S appears to have followed each request O2 has made. He called in November 2024 to give notice and called back in December 2024 to set up repayment plans for his devices. So, I think that if Mr S had been given a clear instruction to wait, I can’t see why he wouldn’t have done so. Particularly as, I note Mr S was having some financial troubles at this time. So, I find it unlikely he would have risked any of his device agreements becoming payable in full, by not following a clear instruction to wait a month. I appreciate O2 has said that only three agreements were affected by the right to exit. It says the other agreements became payable in full because Mr S stopped making his monthly repayments. However, Mr S’ last payments were in October 2024 which is the same for the three agreements O2 accepts were affected. I find it hard to believe that Mr S simply stopped paying all agreements after October 2024 and then only gave notice to end three of his airtime agreements in November 2024. Given the timing, I think it’s far more likely that notice was given for all airtime agreements in November 2024. Mr S then stopped making monthly device agreement payments in November 2024, as he believed they had agreed monthly repayment plans would be set up in December. I have considered that Mr S was already struggling financially and had missed payments on a number of his accounts by October 2024. So, I accept that this adds weight to O2’s argument that it was nonpayment which caused some of his device agreements to become payable in full. However, from everything I’ve seen, Mr S would typically miss payments and then bring his accounts up to date in the following month. I think the timing of these missed payments, together with the contact notes with O2 and Mr S’ testimony, suggest to me that it’s far more likely that Mr S gave notice via the right to exit process on all his airtime agreements. O2 has also said that device and airtime agreements are connected for the first two years. And after this time, an airtime agreement can be cancelled without it affecting a device agreement. I note that Mr S’ first agreement was over two years old at the point of the November 2024 email. If the airtime agreement was still in place, he could have cancelled it without any impact on the device agreement. Whilst I appreciate that this may have been the case, I’ve seen nothing to suggest Mr S was aware of this and Mr S has said that in November 2024 he gave notice to end all his airtime agreements. So, I think it’s far more likely that Mr S also gave notice on this airtime agreement at this time, believing he would be able to set up a repayment plan for the device agreement in December 2024 as I think O2 told him. Finally, I have noted O2’s argument that as part of porting his number, it sent Mr S a porting authorisation code (“PAC”) message. And it’s said this message would have included a warning that by cancelling the airtime agreement, the outstanding balance for the device becomes payable. Whilst O2 hasn’t provided a copy of the message, this is common wording that is typically found in a PAC message. So, there is an argument about whether or not this should have triggered Mr S to query this and confirm the position before using the PAC. However, firstly I’ve not seen evidence to suggest he was sent a PAC with respect of all his airtime agreements and so received a warning for each associated device agreement. However, in any event, I’m mindful that Mr S thought he was following a different process (in line with the 15 November 2024 email) rather than a standard request to end his airtime agreements. And so, I think it would have been reasonable for Mr S to place limited weight on this standardised text message/ messages and more weight on his understanding that the device agreements could continue unaffected. So, I don’t think the PAC message/ messages change my thoughts on this complaint.

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To put things right I think O2 needs to put Mr S back it the position he would have been in had it actioned the request I think he made to continue paying all device agreements on a monthly basis. So O2 needs to buy back the debts for all of the device agreements if it no longer owns these debts. It should remove any fees or charges from these accounts which were added from the point Mr S notified it that he wanted to cancel the airtime contracts. I think this should be from 15 November 2024 onwards. It also needs to make credit file amendments and set up repayment plans without adversely recording this to credit reference agencies. I’ll set this out in more detail in the compensation section of this decision. Customer service issues Mr S has spoken of his distress which was caused when the full balance became chargeable for his devices. And I’m mindful that this whole process would have been very distressing for Mr S, particularly given his wider circumstances at this time. Mr S has said that he received chasers to pay outstanding device agreements in full, despite what was previously agreed. He’s also had to contact O2 on multiple occasions to try and resolve these issues. Furthermore, during this contact Mr S has asked O2 for details of the balances outstanding across his accounts and he has been given varying figures. An example of this has been set out in the background to this complaint. This could have been an error on O2’s part. Alternatively, and what I suspect happened, was that accounts were potentially missed as they were sold on, so the quotes varied depending on whether active accounts with O2 or all accounts were included. In any event, looking at the communication I’ve seen from O2, I think it could have done better to clearly communicate the outstanding balance on each of Mr S’ device agreements. I also think this confusion could have been avoided if O2 hadn’t allowed Mr S to enter as many overlapping device agreements as it did. So, taking all this into consideration, I think O2 should pay Mr S a further £300 for the distress caused by not maintaining his device agreements on a monthly basis and £100 for the service issues around communicating his outstanding balances. And if it hasn’t already, O2 should provide a statement of account for all outstanding device agreements. Again, I’ve set this compensation out in full in the compensation section of this decision. I note Mr S has complained that he needed to contact O2 and make manual repayments towards the device accounts. Mr S has spoken about how inconvenient this was. However, from looking at his statement of accounts, it looks as though from January 2024 he was missing payments on a number of accounts. He then contacted O2 to make double payments the following month. So, it seems likely to me that making manual payments (rather than via direct debit) was due to Mr S missing payments. It therefore doesn’t seem unreasonable that he needed to make manual payments in these circumstances. And as this predates the issues resulting from the 15 November 2024 email, it’s clear the two issues are unrelated. So, on the evidence I hold, I don’t think O2 has treated Mr S unfairly in respect to this. Responses to my provisional decision I asked both parties to provide me with anything further in response. Mr S responded to accept the decision, subject to clarification on how O2 needed to put things right. I responded providing this clarification. O2 accepted my provisional decision in part. However, it said “we cannot amend the credit file until the debt is settled or it will continue to re load each month.” I understood this to be in relation to the credit file amendments I said O2 should make for the cancellation issues. I explained to O2 that if I accepted its proposal (for the adverse information to remain on his credit file) then Mr S will be adversely affected by O2’s error for months/ years to come. And in my provisional decision, part of the compensation payment I’ve awarded is to compensate Mr S for the distress that O2’s error has caused. The impact to his credit file was a key factor

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which contributed to the distress this matter has caused him. So, I didn’t agree this was reasonable. I said I therefore intended to require O2 to find a solution which removes this adverse information from Mr S’ credit file from the cancellation point onwards. And that it only records adverse information if Mr S goes on to fail to make the payments due under the repayment plan. O2 responded arguing that it has a responsibility to accurately report to credit reference agencies. It said Mr S had broken arrangements to pay previously on multiple agreements and so this should remain on his credit file. 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. As neither party has disputed the substantive findings in my provisional decision, I see no reason to depart from them. I have set out my full provisional decision above, which forms part of this decision. The dispute here is in relation to what needs to be done to put things right. So, below I have summarised my key findings and addressed this outstanding point. Lending decisions As set out above, I don’t think O2 should have agreed the last two device agreements in May and June 2024. I have noted that some of the arguments which O2 has made for why the credit file amendments shouldn’t be made, also overlap with the lending decisions. For example, it has said Mr S needed to self-declare he could afford the agreements and his circumstances weren’t going to change. I don’t think O2 is disputing my findings that the May and June 2024 agreements shouldn’t have been given. However, for completeness, I don’t think the self-declaration referred to is sufficient. O2 had approved a number of overlapping agreements so the monthly device repayments were over £160 per month by the time of these applications. Mr S had also missed some payments on his existing accounts with O2 and has provided evidence to show he was heavily overindebted at the time of these applications. So, it’s likely this would have shown on his credit file. Taking everything into consideration, I don’t think that O2 completed proportionate checks and considered the information available when making these lending decisions. And for the reasons set out above and in my provisional decision, I think that if O2 had taken these steps it would have seen that Mr S was unlikely to be able to repay these device agreements. So, I don’t think O2 should have approved them. As explained in my provisional decision, I think it’s fair that Mr S repays the balances owed on these agreements as they were used to fund devices which he received. They were also interest free, so there isn’t any interest which needs refunding. However, it’s clear from the information available that Mr S was already having difficulties managing his existing accounts with it. I also think the volume of devices, taken within the time period in question, suggested potential vulnerability which O2 overlooked. And taking everything into consideration, I think an additional payment of £300 to recognise the distress this will have caused Mr S is fair and reasonable in the circumstances. Events surrounding O2’s email of 15 November 2024

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I’ve set out in detail in my provisional decision why I think Mr S gave notice of his intention to end his airtime agreements and continue to pay his device agreements monthly. And I think O2 failed to action this, leading to the resulting repayment plans and adverse information being recorded on Mr S’ credit file. In response to my provisional decision, O2 has said it can recall the device agreement debts and repayment plans can be set up. Mr S is then able to make his monthly repayments via standing order or over the phone. I know Mr S isn’t happy to telephone each month as this will put him to added inconvenience, so I’m pleased O2 can offer the alternative of setting up a standing order. O2 has said that it can’t remove the adverse information from Mr S’ credit file from the point Mr S cancelled the airtime agreements. It’s said that going forward each month, when Mr S makes the monthly repayments due under the credit agreements, it will effectively reload onto his credit file as a repayment plan. It’s said it therefore can’t remove adverse information until the balances are repaid. Furthermore, it’s argued that Mr S has entered a number of arrangements to pay for his device agreements and these have been broken. So, it feels it’s important this information remains on his credit file to demonstrate his payment history to other lenders. As explained above, its clear O2 made an error and didn’t cancel Mr S’ airtime agreements and set up repayment plans for the device agreements at this time. So, I think O2 should put him back in the position he would have been in had this been done. The position he would have been in is that he would have continued to repay his device agreements monthly without the monthly repayments being reported adversely. In reality what happened was the airtime agreements were cancelled and the device agreements became payable in full. Mr S couldn’t pay these amounts and agreed repayment plans which were recorded adversely on his credit file. Had O2 not made errors at the point of cancelling his airtime agreements, the resulting payment plans wouldn’t have been reported adversely. I accept, as O2 has argued, that it’s important that a credit file accurately reflects an individual’s payment history. However, the repayment plans that it has highlighted (and which Mr S subsequently broke) were set up as a result of O2’s initial error. Mr S has said when he realised O2 had been reporting these plans adversely to his credit file he lost confidence in O2. So he stopped paying the plans and made his complaint. However, Mr S has been consistent throughout his complaint that he wants to repay these debts. So in order to put Mr S back in the position he would have been in had the error not been made, the resulting adverse information needs to be removed from his credit file. O2 has not persuaded me that it is fair or reasonable for this information to remain on his credit file. As I explained in my provisional decision, if Mr S goes on to not meet the terms of the repayment plans, this can then be reported to his credit file. However, as the failure to meet the previous repayment plans flowed from O2’s errors, I’m not persuaded it’s fair or reasonable for this information to remain on Mr S’ credit file. O2 need to remove the adverse information from the time it made an error with the airtime cancellation plans onwards. It also needs to set up new repayment plans and find a solution which allows it to not report these plans adversely to Mr S’ credit file (unless he goes on to fail to meet them). Customer service issues Mr S has spoken of his distress which was caused when the full balance became chargeable

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for his devices. And I’m mindful that this whole process would have been very distressing for Mr S, particularly given his wider circumstances at this time. In addition, I note that when he was contacting O2 he was given conflicting information from it about the total balances outstanding. So, I think O2 should pay the additional compensation I set out in my provisional decision to compensate Mr S for the distress this caused him. Putting things right O2 should pay Mr S total compensation of £700 for the distress its actions has caused. This is made up of: • £300 for giving the May and June 2024 device agreements which I don’t think it should have. • £300 for the distress caused by not maintaining his credit agreements on a monthly basis, as Mr S requested, and in line with the November 2024 email. • And £100 for the customer service issues. May and June 2024 agreements I don’t think either of these two agreements should have been given. So O2 should: • Buy back the debts if it doesn’t still own them. • Remove any additional fees and charges added to the accounts and treat any payments already made as payments towards the principal balance. It should then arrange an affordable and suitable payment plan with Mr S for the outstanding principal balances. • O2 should also make amendments to Mr S’ credit file: ▪ It should remove any adverse information, which was reported to his credit file from the point the airtime contracts were exited, in relation to these two accounts. Given the confusion on this case, O2 should use 15 November 2024 as the date from which to remove any adverse information. ▪ And once Mr S has repaid the outstanding principal balances owed under each agreement, it should then remove any adverse information in relation to these agreements from Mr S’ credit file. All remaining agreements O2 should: • Buy back the debts if it doesn’t still own them. • Remove any additional fees and charges added to the accounts as a result of Mr S cancelling the airtime agreements on 15 November 2024 and treat any payments already made as payments towards the principal balance. It should then arrange a repayment plan for the same monthly repayment amount as Mr S paid under each device agreement. • It should remove all adverse entries added to Mr S’ credit file in relation these accounts from the 15 November 2024 onwards.

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These repayment plans should not be reported adversely on Mr S’ credit file going forward, unless he fails to meet the terms of them. Mr S has asked throughout for a clear understanding of the balances he has outstanding. So, O2 should provide Mr S with an up to date account statement for all accounts. My final decision My final decision is that I uphold this complaint in part and require Telefonica UK Limited trading as O2 to put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 22 April 2026. Claire Lisle Ombudsman

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