Not upheld: Refusal to accept repayments and pursuit of recovery actions on Bounce Back Loan complaint against The Royal Bank of Scotland Public Limited Company (RBS)

Decision detail

Summary

T, a limited company, borrowed £50,000 via a Bounce Back Loan from RBS in May 2020. After ceasing trading in November 2023, the company's directors made voluntary repayments from personal funds. RBS identified these payments violated their policy and refunded 14 months of payments (£9,222.50), paying £150 compensation for service delays. RBS then refused to accept further personal repayments and pursued standard recovery actions including formal demand and debt collection referral. The company's strike-off application was suspended due to an outstanding loan objection, and Mr M complained that RBS should contact the Department for Business & Trade to withdraw the objection. The ombudsman found RBS acted fairly in applying consistent lending policies, pursuing standard recovery, and not departing from mandated BBL scheme procedures.

The Ombudsman's reasoning

The ombudsman found that RBS acted fairly in applying a consistent policy based on the legal structure of the borrowing, requiring repayment only from the borrowing entity itself. Accepting payments from non-liable individuals could create legal risks and uncertainty about liability. Standard recovery actions following cessation of trading are reasonable and expected. The strike-off objection forms part of the government-backed BBL scheme designed to protect public funds and RBS should not be expected to depart from mandated scheme procedures. The situation arises from the structure of the BBL scheme rather than unfair RBS conduct.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website