Not upheld: account management during financial difficulties; alleged unfair Default Notices; alleged inadequate forbearance and support complaint against Zopa Bank Limited

Decision detail

Summary

Mr S complained about Zopa Bank's management of his £13,000 fixed sum loan account when he experienced financial difficulties in mid-2025 and was unable to make contractual payments. He alleged that Zopa Bank failed to provide reasonable forbearance and support, issued unfair Default Notices, engaged in harassing communication, improperly collected multiple payments in one month, and unfairly continued applying interest and collection activities. The ombudsman found that Zopa Bank acted reasonably and in accordance with regulatory obligations, including issuing a Default Notice when the account reached three months in arrears, providing forbearance by accepting partial payments, and maintaining appropriate communication about the account status. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Zopa Bank's actions were consistent with regulatory obligations and industry guidance. The Default Notice issued in August 2025 was appropriate as the account was three months in arrears, which aligns with CRA principles. Zopa Bank provided forbearance by not taking immediate action and accepting partial payments. The firm's communication frequency was reasonable and necessary to manage the account. Interest application during arrears was permitted under the credit agreement terms. Continued collection activities were reasonable while the account remained in arrears.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website