Not upheld: Debt collection practices complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr and Mrs J, partners in a business that ceased trading in October 2023, requested HSBC write off approximately £58,700 in combined overdraft and Bounce Back Loan debts citing severe financial hardship and Mr J's mental health vulnerabilities. HSBC declined, citing insufficient financial information and requesting Mrs J's income and expenditure details and medical evidence. The ombudsman found HSBC's refusal reasonable given the Government-backed nature of the BBL scheme requiring recovery efforts, the joint and several liability, and the lack of comprehensive financial disclosure from both partners. Although the ICO found a GDPR breach regarding SAR response delays, the ombudsman concluded this did not prevent fair case presentation and did not warrant additional remedy beyond the £350 compensation already offered.

The Ombudsman's reasoning

HSBC acted reasonably in requesting comprehensive financial information from both partners before considering a substantial debt write-off, particularly given the Government-backed nature of the BBL scheme which requires reasonable recovery efforts. The bank was entitled to request Mrs J's financial position as a joint and several debtor, and to seek medical evidence when informed of mental health vulnerabilities. The SAR delay, while acknowledged as a GDPR breach by the ICO, did not prevent the partners from presenting their case as the bank was clear about what additional information was needed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website