Not upheld: Debt collection practices complaint against Santander UK Plc

Decision detail

Summary

L, a limited company that ceased trading in 2020, took out a £50,000 Bounce Back Loan from Santander in May 2020. The loan fell into arrears and was defaulted in January 2023. Mr S, L's director, sent settlement proposals to Santander in March and June 2025, but Santander did not respond to these letters. Mr S complained that Santander failed to engage with the settlement proposals and that their continued recovery activity prevented L from being dissolved. The ombudsman found that while Santander's failure to respond was a shortcoming, it did not result in an unfair outcome because Santander were entitled to request further financial information and to continue recovery activity on the outstanding loan. The ombudsman concluded that the situation reflects the normal operation of the BBL scheme rather than unfair action by Santander, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that while Santander failed to respond to the settlement proposals, this did not constitute unfair treatment because: (1) Santander were not obliged to accept the proposed settlements; (2) it was reasonable for Santander to request further financial information about L's position before assessing any settlement offer; (3) Santander were entitled to consider their obligations under the BBL scheme structure when assessing offers; (4) the inability to dissolve L reflects the normal operation of the BBL scheme rather than unfair action by Santander; and (5) Santander were entitled and expected to continue recovery activity while the BBL remained unpaid. The ombudsman noted that the frustrating situation for Mr S arises from the structure of the BBL scheme itself, not from unfair action by Santander.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website