The most common and most likely answer to this crossword clue is the 7 letter word RED-EYE
I've seen this crossword clue in Financial Times
R
E
D
-
E
Y
E
More clues leading to the result RED-EYE
Buddy explains!

The straight part
We know that "fault with photo" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case fault with photo = red-eye.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does RED-EYE mean?
RED-EYE noun- The names of animals that have red eyes.
- Types of beverages.
- (travel) An overnight airplane flight.
- Redness of the conjunctiva; especially when caused by conjunctivitis (pink-eye).
- Redness in the eye(s) of someone in a colour photograph, as an unwanted consequence of light from a flash reflecting off blood vessels in the retina.
- (travel) Often followed by it: to travel on a red-eye.