Not upheld: settlement offer rejection and unfair relationship claim complaint against Prodigy Finance LTD

Decision detail

Summary

Mr A complained that Prodigy Finance unreasonably rejected his settlement offer of $6,314.20 (the remaining principal) on a $37,200 loan taken to fund overseas tuition fees. Mr A was unable to complete his studies due to pandemic-related travel restrictions and visa denials, resulting in the University repaying $20,514 and Mr A personally paying $10,425. The ombudsman did not uphold the complaint, finding that Prodigy acted fairly by requiring repayment in accordance with the signed credit agreement, which clearly stipulated interest was payable. Although sympathetic to Mr A's circumstances, the ombudsman determined that Mr A had benefited from the funds for over five years and was bound by the contractual terms. The ombudsman also noted that Prodigy had offered forbearance options but Mr A had not completed the required financial assessment to determine appropriate support.

The Ombudsman's reasoning

The ombudsman found that Mr A signed a clear credit agreement stipulating interest was payable on the loan. Although sympathetic to Mr A's circumstances, the ombudsman determined that Mr A received the benefit of funds for over five years and had not fully repaid them, making it reasonable for Prodigy to decline a settlement offer for principal only. The ombudsman noted Prodigy offered forbearance options but Mr A did not complete the required financial assessment, preventing Prodigy from determining appropriate support. Prodigy acted in line with the credit agreement terms and regulatory obligations by continuing to request contractual repayments and charge interest. No breach of Consumer Credit Act 1974 section 140A was found.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website