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

Decision detail

Summary

Mr B complained that HSBC unfairly defaulted his personal loan account and transferred the debt to collections after he failed to arrange a new repayment plan following the end of a three-month arrangement in May 2025. HSBC issued a final demand letter dated 3 June 2025, but Mr B did not see it until 18 June as he was travelling abroad, and the account was defaulted on 23 June before he could respond. Mr B argued HSBC had departed from its established practice of sending digital prompts before escalating matters, and that he would have contacted HSBC had he received such a prompt. The ombudsman found that Mr B was aware he needed to contact HSBC to arrange further repayments, as demonstrated by his 9 June call, and that HSBC was not obliged to continue using digital messaging or send multiple prompts before defaulting. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr B was clearly informed during earlier phone calls and via letter that he needed to contact HSBC at the end of the repayment plan. The 9 June phone call demonstrated Mr B already knew he needed to arrange further repayments, as evidenced by his statement that he knew the normal repayment date was around the 20th of each month and that he would call the Financial Support Team. Although Mr B relied on digital prompts as reminders, he was aware of his obligation to contact HSBC. The ombudsman found it reasonable for HSBC to issue a final demand approximately one week after the arrangement ended, and that HSBC was not obliged to continue using digital messaging or send multiple prompts before defaulting. By the time the plan ended, arrears had accumulated to a point where defaulting was reasonable. The ombudsman rejected the argument that HSBC acted inconsistently between the two loans, noting the arrears position on the other loan was different.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website