Not upheld: Debt collection practices complaint against Intrum Mortgages UK Finance Limited

Decision detail

Summary

Mrs H complained that the term of her and her late husband's unregulated second charge loan was extended in 2006 without her knowledge or consent, and that Intrum could not provide documentation of this extension. The loan was originally taken out in 2005 for £27,500 over 15 years. In December 2006, Mr H requested a 10-year term extension to reduce monthly payments from £309 to £260 during a period of financial difficulty. Mrs H only became aware of the extension in late 2023 when a relative questioned why payments were still ongoing. The ombudsman found that the term extension was a reasonable forbearance measure requested by Mr H to manage financial difficulties, and that without it the loan would have deteriorated significantly given Mr H's subsequent periods of unemployment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the term extension occurred without Mrs H's knowledge, the account contact notes evidenced that Mr H had requested it to reduce monthly payments during financial difficulties. The ombudsman reasoned that extending the loan term was a reasonable forbearance measure appropriate to the borrowers' circumstances. The ombudsman noted that without the extension, monthly payments would have been £50 higher, which would have caused arrears to build more rapidly given Mr H's subsequent employment instability. The subsequent interest rate reduction to 2% demonstrated fair treatment. The ombudsman concluded that neither the original lender granting the extension nor subsequent lenders administering the loan on that basis created an unfair relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website