Not upheld: debt collection procedures and account default complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mrs S complained that NatWest unfairly defaulted her £46,000 Bounce Back Loan and transferred it to a debt collection agency without giving her a fair opportunity to address arrears. She claimed she was unaware of the arrears because correspondence was sent to an old address and she was dealing with a difficult pregnancy and being abroad. NatWest maintained they used the correct address on their system, contacted Mrs S via email and text using details she confirmed were correct, and that Mrs S had online banking access to monitor her account. The ombudsman did not uphold the complaint, finding NatWest made reasonable contact attempts over a prolonged period and that Mrs S's personal circumstances were not communicated to the bank before the account reached a critical stage, so forbearance could not reasonably have been expected.

The Ombudsman's reasoning

The ombudsman found that NatWest acted reasonably in sending correspondence to the address held on their system, as there was no evidence Mrs S had requested an address update before the account was referred to recoveries. Even if letters were not received, NatWest contacted Mrs S through email and text message using details that matched those she provided to the FOS, and Mrs S had access to her account through online banking where she could have monitored the loan's status. The arrears did not arise suddenly but accumulated over a long period, during which NatWest made multiple contact attempts before moving to collections and recovery. While the ombudsman acknowledged Mrs S's difficult personal circumstances, these were not communicated to NatWest before the account reached a critical stage, so NatWest could not have been expected to offer forbearance. The transfer to a debt collection agency was permitted under the BBL agreement terms that Mrs S had accepted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website