Not upheld: Debt collection practices complaint against BW Legal Services Limited

Decision detail

Summary

Miss C complained that BW Legal was asking her to repay a loan she believed had been written off due to irresponsible lending by the original lender. BW Legal, acting as debt collectors for the loan purchaser P, maintained that Miss C remained responsible for the outstanding balance of £457.50 and that any scheme outcome regarding irresponsible lending would not affect the debt. The original lender entered liquidation and a redress scheme was established, ultimately awarding Miss C £149.76 in compensation for mis-selling, which was paid directly to her. BW Legal reduced the outstanding debt by this amount and Miss C agreed to a repayment plan. The ombudsman found that BW Legal provided correct information and fair communication, and did not uphold the complaint or award compensation.

The Ombudsman's reasoning

The ombudsman found that BW Legal provided correct information to Miss C about her debt and responsibility to repay it. While BW Legal's statement that the scheme would have no bearing on the debt was not entirely precise (as the scheme redress could theoretically affect the debt amount), the ombudsman concluded this was a matter of clarity rather than material harm. BW Legal's response was fair and empathetic, acknowledging Miss C's stress and offering assistance. The ombudsman rejected the investigator's recommendation for compensation, finding that BW Legal was not required to contact the court or scheme administrators and that any confusion was not materially harmful to Miss C, as she did have an outstanding debt and the scheme ultimately paid redress directly to her.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website