Azzurro Associates, a debt buyer that acquired defaulted loans from peer-to-peer business lender Funding Circle, has incorrectly shared information that impacted the consumer credit files of almost 30 of those borrowers.
According to a report in The Times, Azzurro said that “human error” had resulted in a number of personal guarantees for the business loans being reported to the three main credit reference agencies without following the correct processes, such as informing the debtor that they were planning to do so.
Azzurro, which is owned by US asset manager Elliott Management, said the error had impacted around 28 borrowers and that 11 had reported issues as a result.
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It said that it believed the majority of the information provided to the agencies — Experian, Transunion and Equifax — was accurate, according to The Times report.
Funding Circle has sold two cohorts of bad debts to Azzurro. The latest one recently returned around £16m to Funding Circle investors.
The first sale was met with criticism from analysts and MPs due to concerns around how it would impact the collections process.
Funding Circle defended the sale of the loans, saying they represented a small fraction of its overall loanbook, and pointed out that all struggling borrowers are offered support including short-term payment plans.
Azzurro is understood to be contractually obliged to provide the equivalent level of care as Funding Circle.
“We acted immediately upon being notified a mistake had occurred, including contacting our customers and the credit reference agencies who have confirmed that the information has already been removed or will be removed from the files by Monday 26 [July],” Andrew Birkwood, chief executive and founder of Azzurro, was reported as saying in The Times.
“Azzurro apologises for any inconvenience caused.”
Birkwood said the information may show on records for the next 30 days but will not damage the impacted borrowers’ credit ratings.
Funding Circle declined to comment to The Times.