Not upheld: account closure, default reporting, and settlement offer handling complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr Z complained that Halifax unfairly closed his credit card account and reported a default on his credit file after he missed an April 2025 payment and entered a three-month nil payment plan in May 2025. Mr Z claimed he was awaiting funds from his former marital home by December 2025 and offered a partial settlement, which Halifax rejected pending account closure. Halifax defaulted and closed the account on 11 October 2025 after six months of arrears. The ombudsman found Halifax acted within regulatory guidelines, communicated clearly throughout the process, and was not obliged to accept a partial settlement before closure. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Halifax acted within industry guidelines by defaulting an account with six months of arrears. The ombudsman was satisfied that Halifax clearly communicated the terms of the nil payment plan, the requirement to contact Halifax before expiry, and the consequences of non-payment through multiple letters. Halifax was not obliged to accept a partial settlement offer before account closure and had clearly explained this position. The ombudsman noted that accurate reporting of arrears and default to credit reference agencies is a lender's obligation and does not constitute an error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website